21 Cabinet Submission by Mr W.M. Hughes, Minister for External Affairs
MELBOURNE, 13 February 1939
GENERAL ACT FOR THE PACIFIC SETTLEMENT OF INTERNATIONAL DISPUTES
It will be remembered that during its Hobart sessions Cabinet gave consideration to the suggestion of a Sub-Committee of the Committee of Imperial Defence that notice of denunciation of the General Act for the pacific settlement of international disputes should be given before the 15th February 1939, accompanied by a statement setting out the reasons for denunciation and indicating readiness to consider acceptance of the General Act in a revised form. In pursuance of the decision arrived at by Cabinet, the following telegram was despatched on the 7th February to the Secretary of State for Dominion Affairs:-
'Your telegram 126 General Act Pacific Settlement. His Majesty's Government in the Commonwealth of Australia has given careful consideration to the report of Sub-Committee of Committee of Imperial Defence and is of opinion that it is inexpedient to denounce the General Act at this juncture.' 
2. According to information received on the 10th February from the Australian Acting High Commissioner in London , the following views on the suggestion put forward by the Sub-Committee were expressed to the United Kingdom Government by the Governments of other parts of the Empire:
Canada. No objection is raised to notice being given of denunciation by the United Kingdom Government, but it is desired to consider the matter further so far as action by Canada is concerned.
New Zealand. The New Zealand Government cannot concur in the suggested action and feels compelled to allow its acceptance of obligations under the General Act to be continued for a further period of five years.
India. The Government is prepared to proceed on the same lines as the United Kingdom Government.
(South Africa. No question of denunciation by South Africa arises, since she did not become a party to the General Act.) 3. Since the despatch of the telegram of the 7th February setting out the views of the Commonwealth Government, two additional proposals have been received from the United Kingdom Government.
(a) Continued acceptance of the General Act with reservation giving right of denunciation at one or three months' notice.
A communication from the United Kingdom Government dated 8th February was received through the office of the High Commissioner for the United Kingdom in Australia.  This communication referred to the possibility that the Committee of Imperial Defence might not be willing, at its meeting on the 9th February, to adopt the recommendation of its Sub-Committee that the General Act should be denounced. It had been suggested, therefore, that an alternative course might be adopted to make a declaration under the provisions of Article 45(4) of the General Act that while the United Kingdom Government would continue to be bound by the General Act, it reserved the right to terminate its acceptance of the Act by giving notice of, say, one or three months, and that its continued acceptance of the Act would be subject to this reservation.
This second proposal of the United Kingdom Government appears to be open to objection on legal grounds. It is not now necessary to examine it in detail, since it has been discarded by the United Kingdom Government in favour of a third proposal set out in a telegram from the Secretary of State for Dominion Affairs dated 10th February:
(b) Continued acceptance of the General Act with reservation excluding disputes arising out of a war in which the United Kingdom is involved.
Circular telegram F.3  of the 10th February from the Secretary of State for Dominion Affairs sets out the text of a proposed note from the United Kingdom Government to the Secretary-General of the League of Nations. This communication states that so far as settlements of disputes arising in peace time arc concerned, the United Kingdom Government is ready to subscribe to the General Act. It is bound, however, to bear in mind that the Act is, by its present terms, applicable also in the event of disputes arising during war. It cannot exclude from consideration the changes which have occurred in regard to the League of Nations, and the position of its members in relation to their obligations under the Covenant. The United Kingdom Government therefore has reached the conclusion that in the event of finding itself at war at any time in the future, it cannot continue to be bound by the Act as regards disputes arising in such conditions. It is ready to consider any proposal, which might seem likely to secure acceptance, for revision of the Act so as to bring it into conformity with present conditions. Meanwhile, notice is given under Article 45(4) and Article 39 of the Act that the United Kingdom Government will continue, after the 16th August, 1939, to participate in the Act, subject to the reservation that, as from that date, the participation of the United Kingdom will not, should she unfortunately find herself involved in hostilities, cover disputes arising out of events occurring during the war.
4. The reasons for the adoption by the United Kingdom Government of this third proposal are emphasized in Dominions Office circular telegram F.2 of the 10th February.  Reference is also made in this telegram to the fact that the United Kingdom Government is in consultation with the French Government on the question. The United Kingdom Government would be grateful if the other British Commonwealth Governments could review the position, and the hope is expressed that they may be prepared to take action on similar lines. A reply is requested not later than Monday, 13th February.
5. The latest proposal of the United Kingdom Government would not appear to be open to the same legal objections as the second proposal. Although the provisions of the General Act dealing with permissible reservations are rather vague, it would seem that the proposed reservation of the United Kingdom Government is covered by Article 39 (2) (C), which permits reservations to be made as regards 'disputes concerning particular cases or clearly defined subject matters, such as territorial status, or disputes falling within clearly defined categories'. It may be pointed out, however, that the jurisdiction of the Permanent Court of International justice to determine disputes relating to the interpretation of the General Act will be admitted if the latest course of action proposed by the United Kingdom Government is adopted, whereas an unconditional denunciation of the General Act would avoid altogether the possible delay and embarrassment involved, during war, if a neutral invoked the jurisdiction of the Permanent Court to determine whether the reservation now proposed by the United Kingdom Government does in fact fall within the scope of Article 39(2)(c). The possibility of such embarrassment has no doubt been considered by the United Kingdom Government, which is apparently satisfied as to the legality of the reservation proposed.
6. There remains an important aspect which should be taken into account, viz., that the United Kingdom Government has decided to proceed with denunciation of the Act in respect of its wartime application, irrespective of the intentions of the Dominions parties to the Act. Reconsideration of the question must therefore be on a somewhat different basis than previously. On an estimate of the advantages and disadvantages of denunciation as such, without knowledge of what action would be taken by the United Kingdom, the Commonwealth Government earlier resolved that denunciation was inexpedient. But the following case now presents itself; the United Kingdom Government has decided to denounce, it will denounce in a way which appears legally feasible and which to some extent will avoid the charge of complete abandonment of the Act-a contrary decision by the Commonwealth Government would therefore have to meet the objections involved in lack of uniformity.
7. Uniformity is in principle desirable and it is submitted that in this instance its desirability is reinforced by practical reasons. In the event of war the United Kingdom will exercise belligerent rights at sea without the restrictions imposed by the provision of the General Act, which, in the altered interpretation of Article 16 of the League Covenant, would in the opinion of the United Kingdom Government involve grave risks (see circular telegram F.2). The Commonwealth Government, in the absence of denunciation, will remain bound by such restrictions. Not only will this present difficulties in the possibly few cases of independent exercise by Australia of belligerent rights at sea, but it seems likely to lead to serious practical complications whenever vessels of the Royal Australian Navy may be acting for the time being under Admiralty orders, as for instance taking part in a blockade outside Australian waters, a contingency in which the liabilities of the Commonwealth Government under the General Act would be at best uncertain.
On the other hand, the argument for uniformity loses much of its weight in view of the decisions already communicated by Canada and New Zealand, and in view of the fact that South Africa is not a party to the General Act.
8. I am of the opinion that the political objections on which the view of the Commonwealth Government in the telegram of 7th February was mainly based still apply, and are of paramount importance.
The consequences of the proposed reservation may result in a charge of subterfuge, that we are seriously contemplating war, and that we are in effect abandoning a well established part of the international machinery for the peaceful settlement of a dispute.
9. Advice has now been received (13/2/1939) that the French Government agrees with the proposed communication of the United Kingdom Government to the League of Nations, and will take similar action. Further, the communication of the United Kingdom Government will be made today (13/2/1939). 
10. An immediate decision, therefore, is required as to whether- (a) the Commonwealth Government adheres to its previous decision that it is inexpedient at the present juncture to denounce the General Act;
or (b) the Commonwealth Government desires to adopt the procedure decided on by the United Kingdom Government, to inform the United Kingdom Government accordingly, and to send a similar communication to the Secretary-General of the League of Nations.