120 Prime Minister's Department to Mr S. M. Bruce, High Commissioner in London

Cablegram unnumbered 30 March 1940,

I shall be glad if you will kindly convey the following message to the Secretary of State for Dominion Affairs [1]-begins.

We desire to refer to the discussions which have taken place between our Governments through Bruce on the subject of the sale of dried fruit surplus after providing for requirements of our domestic markets of [sic] Canada and New Zealand and of the decision of the United Kingdom Government to purchase only 24,500 tons out of the probable surplus of 50,000 tons. Further that this would be the position throughout the war.

If this attitude be adhered to a very serious condition indeed will be brought to the industry. Government assistance would undoubtedly be sought and nothing short of acquisition by the Government would provide a remedy. Whatever steps be taken, heavy losses will be sustained as there is no further market to look to and the fruit would just not be sold at any price.

For many years before the war the United Kingdom Market absorbed the Australian surplus and an industry largely consisting of soldier settlers was built up on the assumption that the United Kingdom Market would be retained. In discussions between United Kingdom and Australian Ministers and Officials during the preparatory stages before the outbreak of war it was stated that the United Kingdom Government would buy amongst other products the surplus of dried fruits and canned fruits. On seeking to open negotiations however, the Commonwealth Government was informed for the first time that undertaking had been entered into by the United Kingdom Government to purchase Turkish dried fruits as an economic warfare measure. Whatever be the merits of the Turkish arrangement which are no doubt material we feel very strongly that no such arrangements should have been made without consultation with Australia. The fact stands out clearly that Australia has had imposed upon her a measure seriously damaging to one of her industries without her consent, indeed without her knowledge. We must affirm emphatically that such a step does not fit in with our conception of the trade relations which should exist between our two Governments even under war conditions. We wish earnestly to ask therefore that your Government review the position conveyed to Bruce with a view to the purchase of our full surplus.

We are also perturbed at the prospect of difficulties arising in regard to the export of our canned fruits but we do not wish to make representations to the United Kingdom Government in this respect until certain issues have been clarified through Bruce.

These instances strengthen our feeling that we should have some direct representations in the Ministry of Economic Warfare in which we are at all times willing to play our part but effective co-operation in which requires advance knowledge and consultation.

Therefore the Commonwealth Government would be glad if facilities could be afforded for the appointment of an Australian Liaison Officer of high standing to the staff of the Ministry of Economic Warfare. [2]

1 Anthony Eden.

2 This cablegram, which was drafted by the Commerce Dept, was dispatched following a decision of Full Cabinet on 29 March 1940.

(See AA: A2697, vol. 3B, 29 March 1940, Minute 323 and Commerce Dept Cabinet Agendum 1940/18 on file AA: A621, s446.)

[FA: A3196, 0.1876]