611.4731/196: Telegram
The Consul General at Sydney (Moffat) to the Secretary of State
[Received November 5—11:15 a.m.]
Your October 31, 2 p.m., and November 2.31 I delivered your note in Canberra Tuesday evening. It will be considered by the full Cabinet next week when Lyons and several other senior Ministers return.
Meanwhile I had a long but unproductive talk with Benett.32 He tells me that Australian and oversea credits problem is potentially as serious as ever and that the London funds have shown virtually no increase despite highly favorable exports. He personally believed that until Australia had adequately built up reserves which would assure her solvency in the event of adverse conditions she could not afford to abandon her present trade diversion policy which to some extent at least is relieving the pressure. He continues to feel just as [Page 773] strongly that we are indifferent to Australia’s difficulties and unwilling to help her by reciprocal trade in a period of stress as we feel that Australia is indifferent to the implications of a policy of discrimination against us.
The debate on Australia’s trade diversion program which has not yet begun may drag on for some time. Since the recent sharp rise in the price of wool the Government feels that the wind has been taken out of the opposition’s sails.