611.4731/155: Telegram

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

My telegram of April 15, 10 a.m.10 While I do not want the Department to gain the impression that the threat to restrict our trade with Australia is no longer acute, nevertheless it begins to look as though drastic action may be postponed until the next session of Parliament. There are four principal reasons for this improved outlook.

Continuing unfavorable press reaction.
Successful lobbying on the part of Australian industrialists who seem to have convinced even the most hostile members of the Government that effective restrictions against the more important items of American trade (notably chassis, petroleum, tobacco, and machinery) would seriously affect established Australian industries, with repercussions on employment.
A deadlock in Australia’s trade negotiations with Japan. Acting apparently under pressure from British manufacturers, Australia has told Japan that she must either limit her rayon consignments to a fraction of her 1935 figures or else be faced with prohibitive duties or quotas; Japan has countered by threatening to retaliate against Australian wool to the extent she feels able.
A natural disinclination to make any move which might embitter us until Australia has decided whether she will back down or risk a trade war with Japan.

I have just had a message from the Prime Minister to the effect that he is preparing a reply to your personal letter which he will forward at an early date.

  1. Not printed.