242 Department of External Affairs to Australian Delegation, United Nations

Cablegram 524, CANBERRA, 21 October 1949, 6.40 p.m.


Agenda Items on Full Employment.

In handling this item the objective should be to draw attention to the significance of articles 55 and 56 of the Charter, which state that principle of full employment and record the pledge of all Members to take action to achieve this end, now that the immediate post war re-stocking period has passed in some countries, particularly the United States, resulting in a lower level of international demand.

You should not deal in any detail with domestic conditions in the United States or make statements which might be construed as critical of United States domestic policy. The level of activity in the United States during 1949 has not dropped greatly below the average for 1948 and the falling back from the peak levels of the last autumn has not developed into a cumulative decline.

However, you might draw attention to the fact that progress in the rest of the world towards multilateralism in international trade and convertibility of currencies is delicately poised and requires continually expanding international demand. For example, even a mere cessation of the upward trend of 1948 is sufficient to undermine the plans for European viability by 1952-53. Any serious decline would gravely prejudice the attainment of the economic objectives of the United Nations, the International Monetary fund, the International Trade Organisation and similar organisations which envisage a high level of world trade free of restrictive and discriminating policies.

The dependence of these objectives on full employment policies as the means of sustaining a high level of international demand should be particularly stressed.

You might also stress the importance of a high and stable level of international investment in under-developed areas to restore the world balance in production, particularly primary production, and overcome the present excessive dependence of the rest of the world on supplies from North America.

You should point out that we have now reached a critical point in world economic development and governments should be seized with the importance of being prepared to take action to prevent any deterioration in economic conditions before the situation reaches the point where the consequences might become irreparable.

Accordingly, the Assembly should keep the position constantly under notice and, as proposed in the draft Resolution, make another review at the next session in the light of the obligations assumed by members under the Charter.

[AA : A1838, 778/5/4]