145 Beasley to Evatt

Cablegram 429 [1] [PHILADELPHIA], 12 May 1944, 2.29 a.m.

SECRET

I.L.O. Report 32.

1. In order to give fair warning of the statement I intended to make and make sure that the matter had been considered on the highest levels I asked Sir Owen Dixon to act in Washington. [2] The matter was considered by Hull as well as others. The reasons given for rejection is draft too inclusive and I.L.O. not wholly appropriate.

2. The Committee met in the evening and the United States introduced our agreed draft [3] amended [4] so as to exclude anything which would suggest the employment agreement [5] thus leaving themselves and the Committee free to vote for our resolution of further conference. [6] 3. Nevertheless I made the statement tracing the history of the negotiations and regretting that Australia and the United States Government could not reach agreement.

'This Committee should know that this is more than a mere difference of view between the two Governments. The disagreement between our two Governments has revealed a fundamental weakness which is likely to threaten the whole future of the United Nations economic collaboration.' Later I stated- 'The Delegates will know that at the present time negotiations are in progress regarding monetary policy and the United Nations have under discussion other matters of economic collaboration such as commercial policy. It is our attitude and it must be the attitude of every country greatly dependent upon overseas trade that we cannot possibly restrict our freedom of action with regard to monetary and commercial policy without some assurance that high levels of employment and consumption will be maintained particularly in the main consuming areas. We considered that it was not too much to ask the nations to undertake to maintain high levels of employment, to undertake certain action if employment fell off and to undertake to discuss employment policies at an International conference if unemployment threatened. Apparently these are undertakings the United States Government is not prepared to consider at this monetary conference'.

In elaboration I stated- 'Speaking for a country greatly dependent upon world conditions I have to say that if the United States Government is unwilling to undertake some employment obligations we must hesitate before entering into discussion on other aspects of International economic collaboration and we could not be ourselves obliged to undertake any commitments which limited our freedom of action to protect our economy against depressed conditions overseas.' 4. Miss Perkins from the chair and other United States delegates privately thanked us for the fair and clear presentation of our case. This I took to mean confirmation of previous statements that they now understood and appreciated our point.

5. We objected to the procedure and had the vote taken first on our amendment to the United States draft which we submitted originally, that is agreed London text. [7] We did this to test the meeting rather than hope to get support as the United Kingdom had already condemned it and supported the United States. However, we lost only 22 to 17, South Africa and Canada not being with us.

We then voted on the present American draft and, though we could not object to any of it, we objected on the grounds that it was avoiding important issues. New Zealand and the progressive South Africa employer [8] were only votes with us. The vote then taken on our original proposal for further conference [9] and passed 27 to nil. Canada did not vote as they do not want I.L.O. to be used.

Employers did not vote. All through the workers and small countries were behind us and with a little more education on this line we can get overwhelming small country support. It must be realised that this is one of several matters at this Conference and while we have never missed an opportunity the education process is not complete. The plenary session is still to meet to receive reports of the Committees and we shall raise the issue again. [10]

6. In summing up we have made our Article 7 position crystal clear and yet in such a way as to make the United States on the defensive as being the main party holding up Article 7. We have also prepared ground for an employment conference. We shall not take any steps re conference in Canberra until we can obtain United States support as transport and other difficulties would have to be overcome. As they have started a strong appeasement campaign and the State Department has already taken steps to see that we do not leave the country without further discussions the whole outlook seems improved.

7. Have just seen Dominions Office 107 [11] and Dixon 414. [12] I would interpret paragraph 4 of Dominions Office 107 as meaning support on Employment Draft. But United Kingdom Delegation opposed us. This together with the known activity of the Embassy in the last few days and Dixon's experience outlined in his 4,4 makes me suggest that the Embassy here is out of sympathy with our approach and out of step with the somewhat changed attitude of the United Kingdom officials in London.

1 Sent through the Legation in Washington.

2 See Document 144.

3 Presumably the text referred to in Document 138, note 2.

4 For the U.S. amendment see International Labour Conference.

Twenty-sixth session. Philadelphia 1944. Record of proceedings, International Labour Office, Montreal, 1944, appendix V, pp. 341- 3.

5 Document 87. See also Document 117, note 3.

6 Beasley had moved that two recommendations be added to the third report to the conference of the committee on items 1 and 2 of the agenda. Recommendation A was the draft employment agreement referred to in note 5, while recommendation B read: 'The Conference recommends to the United and Associated Nations that the "appropriate authority" referred to in the above recommendation [i.e. recommendation Al should be the I.L.O., and that when ultimately an United and Associated Nations authority is set up to co-ordinate the policies and adjust the functions of the various economic organisations of the United and Associated Nations, the Governing Body of the I.L.O. should be consulted.' See Record of proceedings, op. cit., appendix V, pp. 337-8.

7 The Australian amendment consisted of the introductory paragraph of the original U.S. draft employment agreement (see Document 121, note 2) and the replacement of the words after 'Have agreed that' in this draft with the full text of the Australian draft employment agreement, namely the agreed London text published as Documents 87. For the text of the Australian amendment see Record of proceedings, op. cit., appendix V, pp. 340-1.

8 W. R. Skeeles, South African employers' delegate and Vice- Chairman of the Association of Chambers of Commerce.

9 See Document 117, note 3.

10 At the plenary session on 12 May Beasley referred to the committee's vote in favour of the original Australian resolution, saying: 'The carrying of that resolution has advanced, in my view, the Australian Government's attitude on this question to such a stage that we feel that although our draft employment agreement was not accepted by the Committee, the purpose that we set out to establish at this Conference has not been entirely lost.' Moreover, Beasley noted that having just been informed that the text of the draft employment agreement had been included in the record of proceedings, and that 'a pretty fair summary' of the Commonwealth Govt's point of view had been put forward, it was unnecessary to pursue the Australian proposal 'any further'. See Record of proceedings, op. cit., eighteenth sitting, 12 May 1944, p. 260.

11 Document 136.

12 Dispatched 9 May. On file AA:A989, 44/735/56/6.

[AA:A989, 44/1320/13/3]