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United States Department of State / Foreign relations of the United States diplomatic papers, 1937. The British Commonwealth, Europe, Near East and Africa
(1937)

Australia,   pp. 136-159 PDF (9.0 MB)


Page 145


AUSTRALIA
a. m. After a conversation which was more or less general on sub-
jects connected with American-Australian relations, Mr. Casey pro-
ceeded to the office of the Under Secretary accompanied by Mr. Officer.
The Under Secretary 18 called in Mr. Dunn.
  Mr. Casey stated that he had explained to the Secretary the reasons
which had brought about the restriction against American imports
in Australia. He went on to describe in terms with which we were
already familiar the gradually falling balance to the credit of the
Australian Government for the payment of amortization and interest
on its foreign debt largely held in England and for its importations
also largely from England. He said that in 1934, this unfavorable
balance had reached a point when it was clear to the Australian Gov-
ernment that it was of the highest importance not to permit this situa-
tion to develop to a point where the value of the Australian pound in
the international market would be undermined, thus possibly necessi-
tating a further devaluation with respect to the pound sterling.
Devaluation of the Australian pound would very likely result in a cor-
responding devaluation in the so-called sterling group and would prob-
ably, also include Argentina in this general reduction. Mr. Casey
stated that it was the requirements of his own Department, the Treas-
ury, which when laid before the Cabinet, resulted in the decision to
curtail imports from those countries with which Australia had an
unfavorable balance.
  Mr. Casey went on to explain that as a result of the restrictions
against American importations, there had been a diversion of trade,
but that if the Australian Government had been able to foresee the
general improvement of the world situation which resulted in higher
world prices for Australian products, the Australian Government
might not have gone so far as they did in restricting American im-
portations. They might have achieved the measure of protection they
desired by increasing tariffs on the commodities on which they wanted
to divert trade from the United States.
  Mr. Casey then went on to describe the situation which arose at
the Imperial Conference just held in London. He said that Mr. Cham-
berlain had made an earnest plea to the representatives of the Do-
minions for a general survey of the Ottawa preference system. Mr.
Chamberlain had stated frankly to the Dominions that the United
Kingdom Government was bending every effort in its studies of the
trade situation between it and the United States to find a basis for
Office to have a Counselor who would be an Australian and a member of the
Australian Department of External Affairs appointed to the British Embassy
at Washington, and that the appointment would be considered merely as a con-
venience for handling Australian subjects (701.4111/930).
"' Sumner Welles.
145


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