9 Davis to Curtin

Letter [CANBERRA], 10 January 1944

Relative to the proposed Agreement between Canada and Australia in

connection with the furnishing of Mutual Aid by Canada to

Australia, under our Mutual Aid policy, I was instructed on

January 6th to deliver a message to you from my Prime Minister.

I found upon inquiry that you were in Western Australia and would

not return until the 17th and that therefore it would be

impossible for me to deliver this message to you personally before

that date. I communicated this information to Ottawa and have now

been instructed to deliver the message to you immediately. The

message from the Prime Minister of Canada to you is as follows:

'Your High Commissioner in Ottawa has informed me that the

Australian Cabinet is unable to accept the proposed Article X of

the Mutual Aid Agreement between our two countries. [1] I greatly

regret this decision and hope you will find it possible to

reconsider the position. We have considered the suggestion, that

there might be substituted for this Article, a reference in the

preamble to the effect that Australia and Canada have accepted in

principle the general objectives set forth in the Atlantic Charter

and in Article VII of the master Lend-Lease Agreement. We feel

however, that we cannot agree to this alternative, as the question

appears to us of greater importance than would be implied by a

mere general reference of this character.

It seems to us logical and indeed essential that the Mutual Aid

Agreements should contain a re-affirmation of the main points of

general international economic policy which we are all pledged to

pursue after the war by our acceptance of the Atlantic Charter and

by the formal undertakings into which we have entered with the

Government of the United States. Our Mutual Aid policy and Act

were deliberately formulated to fit into post-war economic inter

national relations of this character and to make them more

workable by eliminating the accumulation of large war debts among

the United Nations. The Canadian Parliament and people have

accepted the heavy financial burden of Mutual Aid with this

expectation in view.

It is for this reason that we believe it is essential that all our

Mutual Aid Agreements should contain an assurance that the nations

receiving this assistance also look forward to international

economic relations of this character. We had naturally believed

that Australia and the other countries participating in Mutual Aid

subscribed to the principles in question because they had so

declared in their agreements with the United States. [2] If under

these circumstances the Government of Australia should not find it

possible to reconsider their decision not to re-affirm their

support of these principles we would be obliged to consider that

the Government of Australia is out of sympathy with the general

philosophy behind the Mutual Aid policy and therefore that its

requirements from Canada would have to be obtained on some other

basis.

We have, of course, no desire or intention that the flow of

essential war supplies to Australia from Canada should be

interrupted. If, however, your Government is not ready to sign the

agreement, we consider we must make new arrangements for the

financing of these supplies. The only alternative appears to be

that we should provide essential supplies under a credit to be

repaid within an appropriate period after the war.

Under any such arrangement it would be necessary, as you will

realize, to make a public explanation of the reasons which have

prevented us from fulfilling our intention of providing essential

supplies to Australia out of the Mutual Aid vote without cost to

the Australian Government.'

T. C. DAVIS

1 See Documents on Australian Foreign Policy 1937-49, vol. VI,

Document 352.

2 See ibid., Document 39.

[AA:A989, 43/125/5/6/1, i]