Memorandum by the Chief of the Division of European Affairs (Moffat)

Major Keith Officer called at my request this afternoon. I told him that I had now heard from Mr. Kennedy who did not feel that the suggestions he had informally put forward last Friday offered much hope for a successful conclusion. In particular, we did not see how one phase of a broad problem could be isolated and treated separately from the broad picture on which we were working.

Major Officer said he was sorry as he had hoped that his suggestions might have proven acceptable; that he was afraid that his Government might have to pass the enabling legislation but that even if they did so there might be a further delay before Australia or New Zealand actually applied the legislation. In any event, he implied that the two Dominions would give us sufficient notice before they took final action so that we could never claim that they had caught us unaware or faced us with a fait accompli without adequate forewarning.

I replied that I still hoped that they would not take any steps that would make a final solution more difficult or that would upset a shipping situation which we felt it was to the best interest of the British and ourselves not to be upset at this time.

Pierrepont Moffat

[Discussion of the Tasman trade problem seems to have been discontinued at this time. A letter from the Commercial Counselor of the British Embassy to a member of the Division of International Communications, October 26, 1938, referred to the possibility of the Tasman trade question being revived, and stated: “The position is that New Zealand has passed enabling legislation and Australia is ready to do so, but in deference to strongly expressed American wishes, neither Government has progressed with its proposals, in the expectation that some practical contribution to settlement of the difficulty was to be made by the United States.” (811.802/189)]