Memorandum of Conversation, by the Chief of the Division of Trade Agreements (Hawkins)

Participants: Mr. Stanley M. Bruce, Australian High Commissioner at London;
Mr. Frank Keith Officer, Australian Counselor of British Embassy;
Mr. Francis B. Sayre;
Mr. John D. Hickerson;
Mr. Harry C. Hawkins.

In discussing the proposed trade agreement, Mr. Bruce stated that he was not here in the capacity of a negotiator for the Australian Government, but that he could give us the position from behind the scenes, so to speak. He emphasized that what he had to say was entirely unofficial and that he hoped we would not rely too heavily upon his appraisal of the situation as he might be entirely wrong.

He went on to say that the Australian position as regards a concession by the United States on wool, is that a full 50 percent reduction is desired but that the Australian Government might reluctantly accept a reduction to 20 cents. This he said is the official Australian position, but in his opinion it is conceivable that they would accept a reduction to 22 cents. As regards the concession on meat, he thought that while our tentative suggestion as to what might be possible, does not amount to very much, it might be more or less acceptable if some ingenious provision could be worked out to insure that Argentine meat would not fill the entire quota in the event of any arrangement being worked out whereby the sanitary embargo [Page 328] is lifted. He also said that the Australian Government might want a little larger part of the quota allotted to chilled meat.

Referring to our tentative requests of Australia, Mr. Bruce’s basic position was that until Australia saw some chance of satisfactory concessions by the United States it is not likely to take the necessary steps to obtain the assent of other parts of the Empire to the granting of requests involving a modification of preferential rates. With respect to lumber, he seemed to think that something more or less acceptable to us might be worked out at the proper time; but as regards automobiles, he stated that this presents very serious difficulties for the Australian Government. In the latter connection, he stated that this is part of a broader political picture the essential feature of which is the need for Australia to have a larger population if it is to hold an area the size of that country. He indicated that a large population could not be supported by agricultural or pastoral industries and that industrialization is necessary. He referred to the progress made in this direction as illustrated by the recent flight of the first Australian manufactured airplane.

Mr. Sayre expressed his appreciation for Mr. Bruce’s frank statement of the situation and said he fully understood that what Mr. Bruce had said was not to be taken as committing the Australian Government to anything. With respect to our tentative requests of Australia, he stated frankly that the Australian offers are almost inconsequential and that we could not hope to defend concessions of the kind desired by Australia unless we could show really substantial benefits to American export trade to that country. He said that we had advised Mr. Macgregor to this effect and that presumably our position is being passed on by Mr. Macgregor to the Australian Government. He added incidentally that we had found Mr. Macgregor extremely competent and helpful and that he had a thorough grasp and understanding of the problems presented by these discussions.

The conversation was cordial throughout, and Mr. Bruce was informed on leaving that we would continue to work on the subject with Mr. Macgregor.