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.