36 Evatt to Glasgow

Cablegram 27 CANBERRA, 1 February 1944

SECRET

To Glasgow from Evatt.

In regard to the Canadian-Australian Mutual Aid Agreement, the following aide-memoire and memorandum of interpretation have been given this day to the High Commissioner Canada for communication to his Government. It is desired that you be ready to take up proposals of Australian Government and support case strongly and in every possible way endeavour to reach agreement on lines indicated.

AIDE-MEMOIRE The Minister for External Affairs presents his compliments, and refers to your letter of 10th January [1] addressed to the Australian Prime Minister conveying the attitude of the Canadian Prime Minister on the question of the inclusion in the contemplated Canadian-Australian Mutual Aid Agreement of a clause restating certain of the principles of Article 7 of the United Kingdom - United States Mutual Aid Agreement.

2. While the Australian Government appreciates the frank exposition of the views of the Canadian Government on this matter it is felt that Australia's views should be stated with equal frankness.

3. Those views were indicated to you on Saturday 29th January, 1944 [2], when it was pointed out that there is not the slightest warrant for Canada's calling into question, either directly or indirectly, Australia's undoubted intention to collaborate in pursuing all the economic objectives included in the Atlantic Charter or under the United States - Australia arrangement [3] whereby the general principles of the United Kingdom - United States Mutual Aid Agreement were accepted. The imputation that Australia could be regarded as 'out of sympathy with the general philosophy behind the mutual aid policy' is particularly resented.

Australia's record in attempting to carry out the great objective of 'freedom from want', e.g. at the Food Conference at Hot Springs [4], is so well known to the Canadian Government officials that the Australian Government is surprised at the possibility of criticism of the character mentioned.

4. In relation to the intimation by the Canadian Prime Minister of possible 'public explanation' in the Canadian Parliament, the view of the Australian Government is that no statement whatever should be made as to the course of confidential negotiations except with the full consent of both countries; if it were otherwise, frank and friendly exchanges would be rendered impossible.

5. If, in spite of this caveat, any criticism whatever is directed by the Canadian Government against Australia in respect of the attitude of the Australian Government in these negotiations, it will become equally necessary for Australia to state its case to the world with the utmost frankness. As the Canadian Government itself knows the aid to flow from Canada under the proposed agreement is by no means aid to Australia as such, but rather a fulfilment of Canada's general war effort as an ally and a sister Dominion to make a contribution to the successful prosecution of the war with Japan. All the aid coming to this country is being and will be devoted to that end. As the Canadian Government also knows, Australian resources are stretched to the uttermost.

6. In such circumstances it has always seemed to the Australian Government unnecessary to repeat, as a new obligation to Canada, international objectives to which the Australian Government is already committed and which it shall fulfil whether or not Canada insists upon restating them in the proposed agreement.

7. In regard to mutual aid, the pooling of the resources of British countries to win the war is the accepted policy of the Australian Government and it does not think the making of an agreement in relation to such pooling should be made conditional upon the acceptance of such a clause as the proposed Article 10.

[5]

8. Those views have been previously elaborated to you. [6] The Australian Government would still prefer that in the proposed agreement no attempt should be made to paraphrase [or] restate Article 7 of the United Kingdom - United States Mutual Aid Agreement. In short, Australia, having already in mind its earlier obligations to the United Kingdom, Canada, the United States and other countries concerned in the Washington Declaration of 1st January, 1942 [7], regards the proposed Clause 10 as being redundant and, if left without clear interpretation, calculated to cause misunderstanding.

9. In spite of the above, the Australian Government is anxious to avoid any disagreement with Canada which might in any way impede the prosecution of the war effort against Japan. The following new approach is therefore made.

10. The Australian Government is ready to accept the inclusion in the agreement of a clause in the precise terms proposed by the Canadian Government subject to an understanding between the two Governments, to be suitably recorded, as to the interpretation which both Governments place on Clause 10 of the agreement.

11. If this proposal is acceptable to your Government it is suggested that it be carried into effect by an exchange of Notes between the Governments to accompany the signature of the Mutual Aid Agreement itself.

12. The attached memorandum sets out the interpretation of the Australian Government which it would ask the Canadian Government to accept.

13. If agreement can be reached on the basis of this memorandum, then it is suggested that a recital be inserted in the preamble along the following lines:-

'AND WHEREAS in their understanding of the conditions upon which such war supplies are made available by one United Nation to another the Government of Canada and the Government of Australia have agreed on the interpretation set out in the schedule attached to this agreement as defining their duty in pursuit of the general economic objectives specified in Article X hereof'.

14. If it should unfortunately happen that the Government of Canada cannot see its way clear to accept the above-mentioned proposal then the Australian Government would be prepared to sign the Mutual Aid Agreement with a recital referring to the interpretation placed by the Australian Government alone on Article X, such interpretation to be as set out in the attached memorandum, and to be included as a schedule to the agreement.

15. It is requested that you convey the above by telegram to your Government.

MEMORANDUM Interpretation of Article 10 Canadian-Australian Mutual Aid Agreement In the Declaration of Washington, dated 1st January, 1942, the Australian Government, like the Canadian Government, adhered to the Atlantic Charter. Each Government has also accepted the general principles of Article 7 of the United States - United Kingdom Mutual Aid Agreement of 23rd February, 1942.

2. Article 10 of the Canadian-Australian Mutual Aid Agreement is a paraphrase of the general principles set out in Article 7.

3. In entering into a Mutual Aid Agreement with Canada, the Australian Government desires that its interpretation of these general principles should be clearly understood.

4. The Australian Government bases its interpretation on the fundamental provision contained in Clause 5 of the Atlantic Charter, which accepts the international objective of 'improved labor standards, economic advancement and social security'. The Australian Government, accepting this noble objective unreservedly, believes that Article 7 of the United Kingdom - United States agreement is intended as a further expression of the same objective and also that such objective can best be attained by attaching primary and indeed supreme importance to the adoption of measures designed to promote full employment and increased production and consumption of goods. This is made reasonably clear by the verbiage of Article 7 itself.

5. In the view of the Australian Government these international undertakings mean that a high level of employment in all countries is a fundamental condition for better standards of living throughout the world and resulting increases in the production and consumption of goods.

6. The Australian Government will, in the immediate post-war period, support such forms of economic collaboration as should make it unnecessary for countries to adopt policies of aggressive economic nationalism, but at the same time it is our view that it is necessary for countries which are not fully developed or which are highly dependent upon a narrow range of exports to be able under any agreement- (a) to use such economic measures as may from time to time prove necessary to ensure continued stability. The need for these measures will decrease to the extent that international collaboration proves successful, and (b) to develop and diversify their industries.

7. Furthermore, the Australian Government is of the opinion that it is reasonable to expect that all international agreements on economic collaboration should take into special account the industrial development, the dislocations and the accumulated needs resulting from the prolonged diversion from peace-time production, in countries which have long been engaged in a total war effort.

1 Document 9.

2 Not located.

3 See Documents on Australian Foreign Policy 1937 49, vol. VI, Document 39.

4 Held in May 1943.

5 See Document 58, paragraph 1, for the proposed text of Article X.

6 See Documents on Australian Foreign Policy 1937-49, vol. VI, Documents 338 and 352, note 9.

7 See Documents on Australian Foreign Policy 1937-49, vol. V, Document 236.

[AA:A5954, BOX 708]