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59 Watt to Hood

Letter WASHINGTON, 29 February 1944

PERSONAL AND CONFIDENTIAL

At the risk of being regarded as pro-American or anti-Australian
or both, I feel I should give you an indication of my personal
views on certain important matters which have arisen recently
affecting Australian - American relationships. These matters are
as follows:

(a) The final Australian communication [1] after the trade treaty
negotiations had broken down
(b) The Australian decision not to agree to include raw materials
under reciprocal aid [2], and
(c) The Australia - New Zealand Agreement. [3]

Before commenting on these matters perhaps I should distinguish
once again between the attitude of Americans as a whole towards
Australians as a whole and the attitude of the American
Administration towards Australia. So far as the attitude of
Americans towards Australians is concerned, there has in recent
months been little change if any. Australians, as citizens of one
of the Dominions, still have a more favoured position in this
country than Englishmen; moreover, Americans are primarily
interested in the Pacific and, as Australians are fighting in that
area alongside Americans, Australians have if anything a special
advantage over the peoples of other Dominions. Again, Americans
know nothing of our trade negotiations nor of the breakdown of
these negotiations; nor have they as yet heard anything about our
refusal to include raw materials under reciprocal aid. They have
heard of the Australia - New Zealand Agreement but very few of
them understand it. Some newspapers and columnists have criticised
the Agreement and have provided a background which could probably
be developed to Australia's disadvantage if the Administration or
Congress or an important group of newspapers and columnists and
commentators so desired. At the moment, however, this has not
taken place and the regard of Americans for Australians remains
substantially unaffected.

The attitude of the Administration is a different thing
altogether. it is extremely difficult to discover with any
certainty what is their precise reaction to any of the three
matters mentioned above, with the exception of course of their
attitude towards the proposed International Conference in
Australia, which has been set out in a formal document transmitted
to the Australian Government. [4] American officials have been
'cagey' in discussing any of these three matters; nevertheless, I
feel little doubt that some Administration quarters have been
considerably disturbed by all three. If you asked me to quote
chapter and verse for this I should probably be unable to quote
anything sufficiently specific to be of much value. My
interpretation at times is based upon the absence of comment and
on atmosphere rather than on specific remarks. Any views based on
so little evidence may seem rather valueless but I give them,
nevertheless, for what they are worth.

Trade Negotiations
The final Australian Note on the breakdown of the trade
negotiations is not accepted as a full and impartial statement of
the facts. I think the Americans are quite prepared to admit what
they would regard as their due share of responsibility for the
breakdown of negotiations; nevertheless, in their view the
Australian Note assigns to them complete responsibility for the
breakdown-which they do not accept. There have been odd rumours
from time to time that a stiff reply was being prepared, because
some people in the Commercial Treaties Division, at least, felt
that the Australian Note could not be allowed to stand on the
record uncontroverted in certain parts. Nothing has come of these
rumours so far and perhaps nothing will come of them. I believe we
should remember, however, that this feeling does exist whether or
not any formal expression is given to it.

Raw Materials
Australia's decision not to include raw materials under reciprocal
aid, when first conveyed to the United States, caused surprise
rather than resentment. F.E.A. seemed to feel that the Australian
decision must have been based upon a misunderstanding as to the
nature and scope of the proposed raw materials programme. As they
regard this question of raw materials as an important element in
the general case being built up to convince Congress at the end of
June of this year that Lease Lend should be continued, they
decided to refer the matter to Australia again for
reconsideration, giving fuller information. We in the Legation of
course have only seen the copy of the memorandum [5] prepared by
F.E.A. and forwarded officially through Nelson Johnson. What
happened in Australia we can only guess at. Indeed, we do not know
officially that the Australian Government came to any decision on
the matter when it was put to them for the second time. We were
surprised to learn about a week ago informally through the State
Department that the decision had apparently been taken in
Australia and communicated to Nelson Johnson some weeks earlier.

[6] So far as I can judge, American officials do not understand
the reasons for this second refusal and we are certainly not in a
position to enlighten them.

Australia - New Zealand Agreement
The official attitude of the United States Government on the
proposal to hold a further International Conference in Australia
has been communicated formally to Canberra. I confess that I was
slightly surprised that a formal Note was sent at all and that the
Note was based upon an interview with the President and was rather
'stiff' in tone. I should not have been surprised if verbal
representations had been made through Nelson Johnson. The
importance of this official notification of views should not, I
feel, be under-estimated, and to see it in proper perspective I
think it should be regarded as a document decided upon after
consideration not merely of the Australia -New Zealand Agreement
but also of our Note on trade negotiations and our decision on raw
materials. The United States Government apparently decided that
the Australia - New Zealand Agreement and the proposals contained
therein were sufficiently important to compel it to go on record.

The tone of their Note, however, has been influenced to some
extent by their reactions to the other two matters I have
mentioned.

I have now read carefully our reply [7] to the American Note and
also the New Zealand reply [8] and I confess I do not feel happy
about the result. At the moment, I can only guess at American
reactions and guesses are not very useful-but, once again, here
they are for what they are worth.

American officials will undoubtedly compare closely the text of
the Australian reply with the text of the New Zealand reply. Where
the two texts agree with one another this will cause no surprise,
because prior consultation between the two Dominions is now to be
expected under the terms of the Agreement. What will interest them
more particularly will be the points of difference between the
Australian and New Zealand replies. Here they will find one
notable difference between the two texts, namely, that Australia
has chosen to quote in a formal document remarks made by the
President of the United States at various meetings of the Pacific
War Council, a body which keeps no official records and the
proceedings of which are unknown to American Departments including
the State Department. This is a grave decision, the effects of
which can only be awaited. I have little doubt that the President,
himself, will be very annoyed. Although he has clearly been, on
occasion, indiscreet at meetings of the Pacific War Council, this
is unlikely to modify his resentment. The State Department is also
likely to be annoyed, because it will probably feel that the
President of the United States has been 'put on the spot'. I do
not know whether the President will feel able or impelled to make
some formal comment on such references to proceedings of the
Pacific War Council. I should think, however, that in any event
there are likely to be even fewer meetings of the Pacific War
Council than there have been in the past and that if and when
meetings are held the President will in future give no information
and express no views which are of any importance.

In making the above-mentioned comments, I do not wish to be
misunderstood. As you know, I have been very critical of
developments in this country during the past six to twelve months
as the Presidential election period approaches. I have wondered
from time to time whether, after this war, we might find ourselves
without any international organisation or without any effective
international organisation, with the United States devoted to a
somewhat ruthless policy of economic imperialism. Again, I have
felt that the United States could have helped us much more than
she did at the end in trying to arrange a trade agreement; that
her reduction of Lend Lease supplies and increase of demands for
reciprocal aid was putting Australia in an impossible position;

and that Australia was wrongly being left out of the conferences
which were deciding so speedily the fate of the world, and more
particularly the fate of the Pacific. I agree that Australia was
compelled to take appropriate action within the limits of her
power to remedy these situations. I question only the method and
the form in which she has set about doing this.

You will remember that I wrote to you not so long ago, drawing
attention to the manner in which Canada had pressed her own claims
and secured acceptance of many of them. [9] I have not the letter
in front of me but my recollection is that I drew attention to the
fact that Canada pursued a policy of persistent pressure at the
most appropriate moment and temporary withdrawal of pressure if
she found the opposition too great. In each case, as far as I can
recollect, she secured informal agreements to what she proposed to
do before in fact doing it. It may conceivably be said that her
method has been old-fashioned and perhaps unnecessarily
considerate of the sensibilities of others. I do not agree with
this point of view. My experience even in this country leads me to
believe that in the long run use of the firm hand in the velvet
glove is more effective and less risky than use of the bare fist.

I do not wish to exaggerate in any sense the importance of the
views I have expressed and, for that matter, I feel no great
confidence in their accuracy. Nevertheless, I feel I should let
you know that during the past month or two I have had the feeling,
almost for the first time since Pearl Harbour, that the work of
this Legation has suddenly become political once again. There are
political problems to be solved, not merely technical problems.

There are individuals who have to be handled with rather more care
than usual.

As to the position at the Australian end, you are in a far better
position than I to judge. I have now been away from Australia for
so long and so much has happened in the meanwhile that I find it
difficult to assess reactions and developments in Australia. I do
no more than suggest for your consideration that considerable
thought should be given in Australia to the extent to which
Australia is in a position to stand up to the United States on her
own and the extent to which Australia can and will be supported by
the United Kingdom against the United States if it comes to a
showdown on any major issue. There are many signs in Washington
from time to time that, while the United Kingdom holds different
views from the United States on many matters and is occasionally
annoyed at American policy, nevertheless, the United Kingdom still
feels herself unable to resist American pressure on major matters.

The United Kingdom is of course in an extremely difficult position
with the war still not won and the prospect after the war of a
strong Russia on the one hand and a strong United States on the
other. I would not assume too easily that the United Kingdom will
be able, even if she so desires, to support Australia as against
the United States on vital issues.

In my view, if one looks twenty to fifty years ahead, Australia
needs the support of the United States in the Pacific and this
fact should constantly be kept in mind when considering our day to
clay problems and differences. I believe that we should indicate
to the United States our views on world and Pacific problems with
the utmost frankness and firmness and do our best to get support
elsewhere to give effect to our desires. In pressing our views,
however, I would suggest that from time to time we give due
expression to our gratitude to the United States for the help she
has given Australia in this war and that we should also consider
carefully the form, the method, and the content of our
representations.

ALAN WATT

1 See Documents on Australian Foreign Policy 1937-49, vol. VI,
Document 355. See also Document 98, note 1, in this volume.

2 ibid., vol. VI, Document 303.

3 Document 26.

4 Document 40, Attachment.

5 See Documents on Australian Foreign Policy 1937-49, vol. VI,
Document 321, note 2.

6 See the third person note to Johnson of 28 January, On file AA:

A571, L42/1303, vii.

7 Document 56.

8 Dated 24 February. On file AA: A989, 44/735/168/20.

9 Not located.


[AA:A989, 43/950/5/1]
Last Updated: 11 September 2013
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