40 Watt to Hood

Letter (extract) WASHINGTON, 20 February 1945

PERSONAL AND CONFIDENTIAL

[matter omitted]

Employment Conference

We are sorry that Australia should think that we mishandled the approach to the United States on the question of a conference on Full Employment, but we thought we were right in acting as we did.

We took it for granted that Australia was aware through press reports that a Big Three meeting was impending and that Australia would know, therefore, that neither the President nor Stettinius were likely to be available in Washington at the time when we were instructed to make an approach. Moreover, in the Minister's telegram No. 75 of the 23rd of January [1] he used the phrase 'The President is attending meeting of Big Three this week'. This was not strictly accurate but would have conveyed the impression that the Big Three meeting was very close. We were somewhat surprised that we were instructed to make the approach on named dates, namely, at first the 22nd of January and subsequently the 29th of January. We linked this instruction with the meeting of the I.L.O.

Governing Body in London and as this body was scheduled to finish on the 31st of January we thought it essential to make the approach at the earliest possible moment after the British Embassy and the New Zealanders received their instructions. As already mentioned in our telegrams, the only person other than Clayton available at the time was Grew, and it is not practicable to demand an interview with the Acting Secretary of State on twenty four hours notice or less. We did exercise considerable pressure, however, in order to secure at once an interview with Clayton, who had to rearrange some appointments in order to see us. This, together with the presentation of formal notes signed by the three Heads of Missions addressed to the Acting Secretary of State seemed to us the most that could be done with speed and still left open the possibility of the Heads of Missions discussing the matter with Grew (or with Stettinius) at a later date.

I do not know whether it is sufficiently realised in Canberra that the nomination by the President of Henry Wallace as Secretary of Commerce and the stir which this nomination has caused has not, to put it mildly, helped us in securing a favourable answer from the United States. By the form of his defence, Wallace has made employment an important domestic issue. [2] It would, I imagine, be difficult for the Administration to give an affirmative answer to our representations, at least until the Senate has confirmed Wallace's appointment; otherwise if it became known that the United States Government had agreed to a conference on Full Employment this might be used by Administration opponents as an additional reason for not confirming the Wallace nomination and for attacking the Administration. At the moment it looks as if the George Bill, separating R.F.C. [3] functions from the Department of Commerce, will be passed and Wallace may now be confirmed, although not without a fight. I can only guess at probable State Department reactions to our approach in these special domestic circumstances but my guesses are as follows:

(a) The State Department is unlikely to give a positive affirmative reply to our proposal for an Employment Conference until Wallace has been confirmed as Secretary of Commerce and that domestic issue has subsided somewhat.

(b) The State Department may wish to delay a reply, partly because of the Wallace issue, partly because its own views on the best approach to economic problems is still somewhat indefinite and partly because it is preoccupied with the Mexico City [4] and San Francisco Conferences.

(c) The State Department is unlikely to return, either in the near or more distant future, a flat negative reply because the proponents in this country of Full Employment would regard such a reply as unsatisfactory. A flat negative would seem to be inconsistent with the President's reference to 'Sixty million jobs' and suggest that the Administration was not fully in favour of all steps which help secure the fullest possible employment.

Once again, I am guessing but I feel that so much time, thought and energy is now being given to the Mexico City and the San Francisco Conferences that it is unlikely that the President or Stettinius would commit themselves to a conference on Employment before the San Francisco Conference is successfully over. I see no reason, however, why the Australian Delegation at San Francisco should not do good work in enlisting both American and other support for a conference on Employment at the earliest possible moment after the completion of the San Francisco Conference, or why the Australian Delegation should not endeavour so to frame the clauses dealing with the Social and Economic Council as to emphasise the primary importance of Full Employment.

1 On file AA:A3300/2, 45/325.

2 Wallace had stated that the Department of Commerce and Federal Loan Agency provided a means of 'promoting a maximum of national employment by private business'. His nomination was opposed vigorously in the Congress by both Republicans and right-wing Democrats because of his alleged lack of business experience, radical idealism and links with the Confederation of Industrial Organisations. His nomination was confirmed after the passage of the George Bill removed control of all lending agencies from the Department of Commerce.

3 Reconstruction Finance Corporation.

4 The Inter-American Conference on Problems of War and Peace met from February to March.

[AA:A1066, A45/2/6/2, i]