611.4731/144: Telegram

The Secretary of State to the Consul General at Sydney (Moffat)

Your April 6, 4 p.m., and previous. I appreciate the good efforts you have made to present our point of view to the proper people there. I am, of course, disappointed that in spite of their expressed recognition of the soundness of our program they still feel that they should take drastic action singling out our commerce. I quote for your consideration a communication from me to the Prime Minister which you may transmit if you think it will be helpful:

“My dear Mr. Prime Minister: I have been exceedingly concerned at press reports of recent statements in the Australian Parliament and elsewhere which indicate that there exists in Australia a feeling that the United States Government is indifferent to the welfare of Australia. I believe that the last thing that can be said of America’s attitude toward Australia is that we are indifferent to its welfare, and I want you to know that although compelling circumstances have made a trade agreement between the two countries not feasible up to the present I have hoped that our general program of gradually lowering trade restrictions would in many indirect ways benefit Australian commerce—a result I would welcome.

First of all, I am sure you will recognize that the development of our trade agreements program, because of the breadth of its aims, must [Page 747] unfortunately be a comparatively slow process. The conclusion of each agreement in strict conformity with the Act of June 12, 1934,9 entails an enormous amount of work by a large staff of experts. It was obviously impossible to negotiate with 65 countries at the same time. We have already concluded 11 agreements, with several more in the final stages.

We feel we have made considerable progress with the program of extending trade agreements on the most-favored-nation basis and have been very much encouraged by the increasing recognition given to the basic soundness of the plan to increase trade by the removing of barriers and restrictions and making possible the wider extension of the beneficial effects of such increased trade. It is in the persistent extension of these trade agreements that the circumstances of triangular and multilateral trade naturally come into play. That is to say, it is found most profitable to both seller and purchaser for this country, for example, to sell more to industrial Europe than it buys from Europe while at the same time buying more from South America than it sells to South America, and for Europe to sell more to South America than it buys. The results are mutually profitable purchases and payments in this triangular manner. I feel sure you recognize that the test of profitable relations between nations is not found in a balancing bilateral arrangement between every two nations trading with each other. This negatives and eventually destroys the triangular and multilateral trade methods and the immense volume of trade thus carried on, and I am convinced that the foodstuff and raw material countries have learned by experience that these broader multilateral trade methods are the most profitable means of disposing of their surpluses to the industrial parts of the world and securing payment therefor.

The agreements we have already made have gone a long way toward removing various trade restrictions in a number of countries, which lessening of restrictions should facilitate the sale of Australian goods. Furthermore, the increases in trade arising from the new American commercial agreements create greater purchasing power for Australian products which should be reflected in Australian trade with other countries.

At this crucial and critical stage of the contest between extreme economic nationalism and sane, practical international economic cooperation, the United States Government feels that having undertaken a vigorous initiative in the fight for liberal commercial policy, for the substitution of the principle of equality for that of discriminations as the cornerstone of its own and of world commercial policy, it has real ground to appeal to other great surplus-producing countries, such as Australia, to recognize the broad objective of economic liberalism and its mutual benefits to all nations.

I hope that instead of feeling disposed to restrict our trade, Australia will see her way clear to join in this great undertaking in that broad and liberal spirit which is the chief characteristic of our present combined domestic and international economic program. Cordell Hull.”

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I appreciate your suggestions with regard to exchange of diplomatic missions. As we have already signified our willingness to do so I do not feel I should take any further steps along those lines at this time nor do I feel that that would be any real solution to the immediate problem which your April 9, 2 p.m.10 indicates has improved. If you have any further suggestions respecting the substance or phraseology of my message, please telegraph them at once.

  1. 48 Stat. 943.
  2. Not printed.