811.71247H/64a
Memorandum by the Secretary of State
During the call of the British Ambassador, I brought up the New Zealand shipping question and stated that I had examined the written note, which he had left at the instance of his government and which has not been made of record, under date of October 23rd,77 in which the views and probable purposes of the New Zealand Government were set forth. The idea seemed to be to preclude the American shipping line from touching at Australian and New Zealand ports. This might rest upon the brand new theory of enacting a coastwise shipping law applicable to two separate independent communities of the Empire, or to exclude the American shipping line upon the ground that it is subsidized to a wholly unfair extent and virtually driving out British shipping.
I suggested to the Ambassador that I could visualize these initial utterances and actions as affording the makings for possible controversy between our two governments; that the matter presented a situation where private shipping interests of both countries were probably expecting to utilize their respective governments to start a controversy which could easily spread into retaliation of different kinds, inevitably seriously affecting the shipping interests first of one country and then of the other; that this government has created a new shipping organization with authority to consider our subsidy situation and to readjust subsidies when in its judgment the facts so warrant or suggest; that the appropriate step would be for the British shipping interests in New Zealand to cause complaint to be presented to the Shipping Board and let the controversy remain between this group of British shipping interests and the opposing group of American shipping interests, instead of permitting them to drag our governments into the controversy; that I myself, of course, have long stood for fair and friendly trade methods and for the removal of all excessive or unreasonable obstructions to international finance and commerce, including the substitution of equality for discrimination. I then said that if our two governments are to be plunged into a controversy which may not prove to be very sound [Page 715] on either side or from any available standpoint under the issues as raised, it would be a simple matter for congressional committees in my country to get hold of the written correspondence that the British note of October 23rd suggests, with the result that nothing would be much easier than for some retaliatory action to be instituted over here, and that this in turn would call for retaliation by the British. I said that these unfortunate possibilities would be developing at the very time that our two governments should be working wholeheartedly together in support of fair dealing and equality; that I could not assume that the British central government at London is now proposing to embark upon a policy of coastwise shipping throughout the Empire and among all of its separate and independent communities, to the exclusion of all foreign shipping; that this is an illustration of the possibilities of controversy that could well arise if this small dispute between two local shipping groups should be pushed on our two governments and espoused by them in the manner already referred to.
The Ambassador said that he did not desire to be understood as expressing the view that his government at London is favorable towards such a coastwise shipping law for the Empire as I had just referred to.
I replied that when the government at London transmits for New Zealand a proposal of this kind, without any adverse comment by the government at London, there are certain implications to the effect that the Government of Great Britain is not at least looking in that direction.
The Ambassador again held out the view that the government was not committing itself on the question by this mere transmittal action. He argued somewhat against the possibility of withdrawing the note and conducting such communications as might take place orally instead of in writing. The Ambassador finally appeared to be impressed somewhat with the viewpoint I expressed, and he proceeded repeatedly to suggest that he felt disposed to take this matter up with his government in its different essential phases and advise me of such reply as he might receive. To this I expressed my hearty approval.
- Note withdrawn on November 3.↩