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Wednesday, 25 February 1942

Dr EVATT (Barton) (Minister for External Affairs) . - by leave - The war against Germany and Italy has now become a world war. As a consequence, international relations cannot with advantage be discussed apart from the war policy and. the war activities of the nations. Post-war planning itself cannot be dissociated from statements of war aims. And war aims, in their turn, have a bearing upon the vigour of a nation's war effort, and, indeed, may become an instrument of war. I therefore turn at once to the war situation.

It is now- evident that Japanese gains in the Pacific, though temporary in character, have transformed the entire strategy of the war. Just prior to the 7th December last, the position of the Allies was broadly as follows : - The only large-scale land operations were on the Russian front. There, after a fierce struggle for five months between perhaps the most formidable forces that have ever been locked together in the history of warfare, the German Army had not only been completely blocked near Moscow and at the entrance to the Caucasus, but was being forced to retreat along the greater part of the front. Russia was at last benefiting from its " scorched-earth " policy - the policy of sacrificing for the general good every bit of property and of denying to the enemy every atom of material wealth. In the Middle East, too, the position had improved. Grave dangers to the Allies had been removed from Syria and Iran. Further, after some months of preparation, an Allied offensive had been launched in the Western Desert with the object of destroying the German and Italian armoured forces in Libya. The rest of the picture also looked reasonably attractive. The great arsenals of the United States of America and of the United Kingdom were turning out the materials of war in ever-increasing quantities and these were being directed chiefly to the British Isles, to the Middle East and to Russia. For the time being, the menace of Japan seemed remote, unreal. Outside the two battle areas, the main Allied task was to keep the communications across the Atlantic open. It appeared as though the submarine menace in those -waters was being controlled. True, no continental land offensive was in operation, but the island of Britain seemed quite secure. In their turn, the United States of America and all the British dominions seemed far removed from every zone of danger.

It may be that the attractiveness and the apparent stability of this situation helped to induce a feeling of overconfidence. The magnificent fighting qualities shown by the Russians, the success of the campaign in Syria, where the Australian Imperial Force had done so well, the belief in the enormous productive capacity of the North American Continent, the success of the convoy system in the Atlantic, together created a mental and moral Maginot Line behind which we might wait at our leisure for ultimate victory to bestow itself upon us. But the Japanese war has completely destroyed that metaphorical Maginot Line. As on other occasions, the democracies found themselves relatively unprepared to meet the first shocks of the Japanese thrust. It is idle to deny that the eleven weeks of Japanese attacks in southeastern Asia and the Indies have created a situation of such acute difficulty that unless we re-organize all our man-power and all our physical resources, and reorganize them very speedily, victory will be very long delayed.

The Allied position now is broadly this : The fight on the Russian front is continuing. Russia has achieved one of the few great land successes against the Axis. A German spring offensive seems possible, but the Russians seem intent upon denying the enemy every opportunity to stabilize his line, and indeed are still moving westward. The Russians are resolute to liberate their lost provinces. There is every reason to believe that they will succeed in doing so. But the Soviet is also a Pacific power, and recent public warnings suggest that, as a Pacific power, it cannot and will not tolerate any attempt by Japan to destroy the southern democracies. In the Pacific, the Japanese, having fully exploited the advantage of surprise, have overrun Malaya and reduced the supposedly impregnable Singapore in rapid time. As a result, their surface vessels have gained access to the Indian Ocean. They have separated the Pacific Allies into two land areas. The northern and western area is in India, and Bunna, and the southern and eastern is partly in the Indies and mainly in Australia and New Zealand. I have not forgotten one magnificent outpost of resistance. In the Philippines, with unconquerable will, the United States forces under General MacArthur are still rivalling the defenders of Tobruk and of Leningrad. The sea, land and air operations of the Japanese have covered so wide a field iu so rapid a time, have had such important strategic consequences on the world war, and have had such an effect on economic forces and resources, that, without doubt, Japan's war activities constitute a gigantic threat to the fortunes of the anti-Axis powers everywhere in the world. Unfortunately, too, the military position in the Middle East has temporarily deteriorated. The Allied offensive, commenced in the Western Desert in November last, has not been sustained and the enemy under Rommel has made very substantial advances. His forces in Libya are still active and their supply lines across the Mediterranean are still open. For some of these supplies, it is clear that the Vichy Government 'has been responsible. The ebb and flow of success in the four Libyan campaigns has been a puzzling feature of the war.

On the other hand, the political situation in the Middle East has improved as a result of the new and important treaty signed at Tehran on the 29th January by which the United Kingdom, the Soviet and Iranian Governments entered into an alliance. The United Kingdom and Russia undertook obligations to protect Iran from the aggression of Germany and its associates. In return they have secured the co-operation of the Iranian forces and civil authorities within Iran, together with the right to maintain their own forces in the country and to make unrestricted use of communications through Iran. Japan's early gains have further complicated the Allied supply position. Portion of the output of the United States and the United Kingdom must now be directed to the Pacific, as well as to the Middle East, the Russian front and the British Isles. As a consequence, Allied forces have to be distributed over a tremendous area and extended lines of communication in all the oceans of the world have to be protected. The extra calls on production, shipping and naval strength are obvious. The difficulties have been increased by the fact that we have lost considerable resources of oil, rubber, and tin in the Far East. On the 1940 figures, the annual rubber production of Malaya was 3S0,000 metric tons; tin production, 80,000 tons; and iron ore production, 1,940,000 tons. The total annual petroleum production of Dutch Borneo was 1,680,000 tons, and of British Borneo 928,000 tons. From the remainder of the Netherlands East Indies, most of which is now denied to us, the petroleum production was over 6,000,000 tons. The rubber production of the Netherlands East Indies was 540,000 tons a year. Malaya and the Indies are, of course, the greatest rubber producers in the world.

Whilst the temporary loss of these resources worsens our supply position, the Allies still command great material strength elsewhere, and such resolute action as that carried out by the Dutch in destroying one of the great refineries in. Sumatra has meant that, our losses hav«> not always been Japan's sains. These problems of supply illustrate the truth that you cannot treat the war against Germany as separate from the war against Japan, and then argue that Germany should be defeated first and Japan dealt with afterwards. If Japan's successes are allowed to continue, Germany's defeat will be indefinitely postponed.

On the other hand, we should not underestimate the titanic strength of our American partner in the war against, the Axis. The whole of the man-power and industrial resources of that great nation of 130,000,000 people are dedicated to an Allied victory. In his message to Congress on the 7th January President Roosevelt announced a war programme for the coming year equivalent to £ A.17,500,000,000 ' and foreshadowed the production of 60,000 aeroplanes, including 10.000 combat types this year, and 125,000 aeroplanes next year; the production of 45,000 tanks this year and 75,000 next year; and the building r-f S. 000.000 tons of shipping this year "id 10,000,000 tons next year. In China aipo, we have gained as an ally a great and courageous people who, for more than four years, have shown the greatest tenacity against a skilful enemy possessing far greater mechanical resources.

Here I would like to pay a public tribute to the valued services performed by our Minister at Chungking, Sir Frederic Eggleston. In a time of acute crisis, he has made it possible for the Chinese Republic and its Generalissimo to understand and sympathize with the special difficulties which this Commonwealth has encountered by its many tasks in different theatres of war.

The actions of the Japanese have gained us other allies. On the 3rd January, in Washington, a declaration of Allied solidarity was signed by representatives of 26 States. Although not a!l of those States were at war with identical groups of enemy powers, each government subscribed to the common pledge to employ its full resources, military or economic, against those members of the Axis with which it was at war, to co-operate with the other signatory governments, and not to make a separate armistice or peace with the common enemies. By adding up populations and industrial output of the Allied nations, particularly the British Commonwealth, the United States, the Soviet Union and China, it could be made to appear that Allied strength far outweighs Axis strength. This is a paper argument and the danger is that its comforting simplicity may help to create yet another imaginary Maginot Line behind which we can remain on the defensive and wait for victory. Men and resources are only effective if they are used in the right way in the right place and at the right time. All three are essential conditions of victory.

In the end we can win the war only by taking offensive action. The preliminary to the final offensive is the present organization of all Allied resource? whatsoever. Planning is not enough.The plans must be executed ruthlessly. In one of his books, General Monash stressed over and over again the need for preliminary organization, and the even greater need for relating each step to the ultimate physical movements involved in co-ordinated military offensives. The Allies cannot be assured of victory until they perfect their system of co-operation, and see to it that their plans are carriei into full force and effect.

In the last few months Australia's own position, has changed very rapidly. We had sent, abroad valuable land, sea and air forces. Our airmen took part in the defence of the British Isles, in the protection of British ships and in raids against Germany; our sailors served in the Mediterranean and other waters; our soldiers fought in Libya, Greece, Crete, Syria, Tobruk a.nd other African fronts and some stood ready to share in the defence of the British Isles against anticipated invasion. Thousands of picked young men were sent abroad, in the Empire Air Training Scheme. We helped to provide a garrison for Malaya. Large supplies of equipment were shipped away. In doing this we were unreservedly serving the cause of our Allies and also helping in our own defence. Now the position requires a new emphasis. Not because of our desire, but because of our necessity we seem certain to meet direct thrusts against our homeland and the territories of our near Pacific neighbours. At the recent meeting of members of both Houses an opportunity was afforded of reviewing the state of our home defences, and I shall make no detailed reference to them now.

Nor do I propose to review the campaignin Malaya and Singapore, which has terminated in the agonizing captivity of many thousands of men of valour, including most of our own men in that theatre. I do not for a moment subscribe to the view that the causes of this disaster should not be investigated. Of course they should, lest similar losses be repeated. Unless we learn the lessons of such setbacks - and apply the lessons promptly - all the administrative machinery in the world will not gain us the victory. The task of dispassionate analysis, fearless criticism, and careful judgment should be undertaken; and in due course no doubt that will be done. I suggest that one outstanding lesson of the campaign is the fundamental need for creating effective machinery to ensure that there shall be not only Allied unity of command but a guarantee of a common Allied strategical plan backed by the pooling of Allied resources and the sound allocation of those resources to Allied forces. This task is enormously complicated because the powers allied against Japan - the United States of America, the United Kingdom, China, the Netherlands, Canada. Australia,. New Zealand, and the American Republics which have declared war on Japan, together with the Free French - are widely separated geographically and have widely differing resources. In practical terms, the co-ordinating of Allied effort includes at least -

(1)   Machinery for the higher direction of the war, so that, while decisions can be made with speed and firmness, due weight can be given to all phases of the conflict and to the special situation of the various Allies;

(2)   The setting up of a unified command or commands to wage war against the enemy;

(3)   Machinery to handle reinforcements and supply in accordance with the decisions of the higher authority.

One of the earliest actions of the Commonwealth "Wan Cabinet and Advisory War Council after the outbreak of war was to consider the question of a supreme authority for the higher direction and co-ordinated control of Allied activities and strategy in the war in the Pacific. As early as the 11th December, we made representations on the subject to the United Kingdom Government. Our view then was that an inter-Allied body should be established, preferably in the Pacific area itself. No action along these lines was taken, for the War Council set up to assist Mr. Duff Cooper after his appointment as Resident Minister of Cabinet Rank at Singapore was purely a British body without, any inter-Allied character. After Mr. Duff Cooper returned to England, it acted solely for local defence purposes in Malaya. The first inter-Allied meetings were the regional conferences held at Singapore on the18th December, and at Chungking on the 23rd December. These conferences put forward recommendations to prepare the way for common action against common enemies as seen from the respective centres, but they provided no permanent organization. As a matter of fact the conferences were not called together again. The shape of a permanent organization did not appear until four weeks after the war started. As a result of the Roosevelt-Churchill conversations in Washington, the text of an agreement for a unified command in the south-west Pacific under General Wavell was presented to the Governments concernedat the end of December. To this, the Commonwealth Government gave its immediate assent. But when, on the 4th January, a further communication revealed that the arrangement proposed for the higher direction of the war in the Pacific did not provide for any direct consultation on the part of the Commonwealth, the Government was unable to accept it. This was not a mere lastminute protest for, in assenting to the unified command, the Commonwealth Government had informed Mr. Churchill that it expected Australia to be included in the joint controlling body referred to in the agreement. Thereupon the Commonwealth Government tried hard to secure the establishment in Washington of an inter-Allied body for the higher direction of the war in the Pacific. We preferred Washington as the venue, but we desired above all that the Commonwealth should have the opportunity of conferring as an ally with the United States of America and China at the same council table and on a common footing. On neither point was our proposal acceptable although, as we subsequently ascertained, it was favoured, in part, at least, by New Zealand, China and the Netherlands, which are all so directly affected by the Pacific war. Eventually, in view of the urgency of the position, the Government accepted, on the 6th February, a proposal made by Mr. Churchill for a Far Eastern or Pacific Council to sit in London and to be composed of representatives of the United Kingdom, Australia, New Zealand and the Netherlands. We expressed the hope then and we hope still that the question of Allied machinery will be reviewed in the light of our recent military experiences.

A hypothetical case will illustrate the way in which the Pacific Council fits into the general machinery. Let us assume that the supreme commander requires guidance or direction from the " higher authority" in relation to the supply of reinforcements or the like. The procedure is something like this -

(a)   The supreme commander in the Pacific telegraphs his question to a combined chiefs of staff committee, which has been set up in Washington as the agency to represent the United States of America and the United Kingdom services. The commander also telegraphs to the chiefs of staff committee in London, which is a United Kingdom body.

(b)   Both in London and in Washington, the telegrams are remitted to joint planning staffs for examination.

(c)   The joint planning staffs submit reports to the chiefs of staff in London and the chiefs of staff committeein Washington respectively, and the two staff authorities proceed to resolve any points of difference between them.

(d)   When this has been done the British Chiefs of Staff submit a report to the Far Eastern War Council in London.

(e)   Any differences of view between the members of the council and the chiefs of staff are argued out in the council.

(f)   The agreed views of the council are then telegraphed to the chiefs of staff committee in Washington. If members of the council differ the British Prime Minister is to " focus " the divergent views and communicate with Washington.

(g)   If the chiefs of staff committee in Washington accepts them, they are presented to the President, who issues the necessary executive order.

(h)   If there is a difference of view between London and Washington, the President informs Mr. Churchill, who remits the matter to the Pacific War Council.

(i)   Then, presumably, the whole matter returns to stage (e) and is thrashed out again.

It must not be supposed that the circumlocution which may possibly occur is essential to, or even typical of, the scheme. Equally, it would be idle to pretend that we regard the present co-ordinating machinery as satisfactory. True, the complexity of the method of consultation results in part from the geographical separation of the two predominant partners in the war against Japan. Each partner is also separated from the relevant war zone by an enormous distance, and distance tends to blur the outline of the military position. A true inter- Allied body has not yet been provided. Until the other day the Australian Commonwealth had no means of meeting either the United States of America or China at the same level of consultation, whether the subject was governmental or strategic, whether the function was supply, munitions or shipping. We have now been informed that China and India have been added by the United Kingdom to the Pacific Council in London. But at no point whatever does any representative of this country meet any representative of the United States of America in any council, committee, or strategic body directly concerned in the controlling of the Allied war against Japan, or, for that matter, Germany or Italy. I agree that this fact does not conclude the matter, for machinery is not always an obstacle, and we are most grateful to the President for his everready appreciation of the Commonwealth's position.

During the discussions on the machinery for the higher direction of the war in the Pacific, the Commonwealth Government also sought to obtain a clearer understanding concerning the position of the Commonwealth's accredited representative, who was accorded the privilege of admission to meetings of the United Kingdom War Cabinet. On several occasions, Dominion Prime Ministers had been invited to attend meetings of the War Cabinet in London, and at our request a similar courtesy was extended to Sir Earle Page when. -he arrived in London as the accredited representative of the Australian Government. In practice, Sir Earle Page was asked to attend Cabinet whenever matters which were considered by the British Prime Minister to be of direct and immediate concern to Australia were under consideration. But in time of war, practically all matters of foreign relations and high policy must necessarily affect all the British dominions. Accordingly the Commonwealth Government asked that its representative should have the right to be beard in the United Kingdom War Cabinet, " in the formulation and direction of policy ". This request was agreed to by Mr. Churchill. But when the Advisory War Council interpreted this decision as carrying with it membership of the War Cabinet, the British Prime Minister took the view that this was not in accordance with constitutional practice. But British constitutional practice has a way of adapting itself to changing conditions, especially in times of war or emergency. Subsequently Mr. Churchill explained publicly that his cabled decision to grant our special request gave us no more rights than Sir

Earle Page had already been receiving. Canada's understanding of the position was expressed in the Canadian House of Commons by Mr. Mackenzie King on the 28 th January -

Mr. Churchill'sstatement next discloses that in the last three months, Sir Earle Page, representing the Commonwealth Government of Australia, has been accorded the privilege of being present at the Cabinet Table in London when war matters and Australian matters were under discussion and also in similar circumstances in the Defence Committee. It is clear from the statement that this privilege, while broadly interpreted, has, however, been extended only as a matter of courtesy. What recently has been asked specifically by the Australian Government and agreed to by the Government of Great Britain is that an accredited representative of the Commonwealth Government of Australia shall have the right to be heard in the War Cabinet in the formulation and direction of policies. Similar facilities Mr. Churchill states will, of course, be available to New Zealand, Canada and South Africa.

New Zealand decided to follow the Commonwealth's suggestion and take advantage of the new position, but Mr. Mackenzie King explained that for the time being Canada did not propose to avail itself of the right or privilege. South Africa took the same view as Canada, Field-Marshal Smuts sending a special message to the effect that Australia's magnificent war effort and the present danger in the Far Eastern situation entitled it to generous treatment. In these circumstances the matter has not been pursued farther. We thought it better to continue Sir Earle Page's representation on the present footing, believing that, as the war crisis deepened, no suggestion or expedient would be rejected merely because it was novel.

The subject of unified commands in the Pacific is one that is difficult to discuss with frankness in a public statement, as actual problems of strategy must arise. One thing is plain enough: In dealing with an enemy whose movements are not dictated by degrees of latitude or longitude, an over-strict delimitation either of strategical areas or of the jurisdiction of commanders may be dangerous. The Commonwealth Government has tried to secure action based upon this postulate.

The third, of the general problems of co-ordination i3 that of reinforcement and supply. A Raw Materials Board and a Munitions Assignment Board are now functioning in the United States of America, with parallel bodies in London. The Commonwealth Government has appointed its accredited representative in London and the Australian DirectorGeneral of War Supplies Procurement in Washington as its representative for consultation by these bodies. Again, however, the only countries directly represented on the boards themselves are the United Kingdom and the United States of America. We are associated with these authorities which hold the keys to the essential supplies and munitions. We are not members. For reasons which are obvious, the deciding of the question of priority for the dispatch' of troops, and instruments of war, and for their transport to widely separated fronts, is one of the major problems now facing us. It is common knowledge that we lost Malaya and Singapore largely because of the inadequacy and insufficiency of aircraftThere were special difficulties in the way of rapid reinforcement with effective implements, and these are well understood. None the less, it is suggested that the function of planning for the effective and timely reinforcement of key positions in Allied plans will best be performed by an authority which can dispose of divergent, conflicting, or competitive claims or arguments on the body where the advice of all the Allies can he given in consultation. The establishment of such an authority will help to end retreatism and to open the way to the ultimate offensive.

Before the .attack on Malaya started, the Commonwealth Government had made representations for the adequate defence of this region and, throughout the campaign, with the full support of the War Advisory Council, it repeatedly stressed its views both on strategy and the urgent need, for reinforcement. From our own limited resources, we at once sent all the reinforcements that were requested. Every requisition was fulfilled immediately. Whatever the fate of this country, the judgment of history will be that we have not spared ourselves in our endeavours to carry out the responsibilities that have come to us as a British dominion and an Allied nation. I think that we have also contributed in some degree to the strengthening of the Allied front in the sphere of international relations. I shall not repeat what I said on previous occasions to the House; and I have already referred to Sir Frederic Eggleston's most useful service at Chungking.

Arrangements were recently completed for an exchange of Ministers between the Netherlands Government in London and the Commonwealth Government, and for the appointment of an Australian ConsulGeneral in the Netherlands East Indies. The distinguished Netherlands Minister has not yet been able to take up his post at Canberra, but Mr. Eugene Gorman is on his way back from the Middle East to take up the position of Consul-General as our representative with a status practically equivalent to that of a Minister. Further steps have recently been taken towards an exchange of representatives with the Soviet Union. As I indicated in a statement to the House on the 27th November last, earlier proposals for an exchange of consuls with Russia, or for the sending of a small Australian delegation to the Soviet Union, had to be deferred, owing to the intense concentration of Russia in its fight to the death with Hitler. We have recently re-opened the matter with the Soviet Government, in order to obtain a general agreement on the question of representation. We regard Russia not merely as an ally, but also as a great power which is destined to play an important part in the Pacific, not only during the present war but also thereafter. It is on this common-sense footing that we have taken the keenest interest in developing our mutual friendship and co-operation; .and both Sir Stafford Cripps and our High Commissioner in London have helped in this development.

The war has happily brought about very close contact between Australia and the United States, now become a powerful leader of the nations fighting aggression. Before war came to the Pacific... the United States had already given considerable material aid against the Axispowers. Up to the end of November last, the United States Congress had appropriated a total of $12,972,000,000 for its. lend-lease programme) and, of this, over $9,000,000,000 had been allocated to a. variety of purposes, which included the- production of aircraft, tanks, ordnance, ships, and general equipment, the repairing of ships, and the provision of foodstuffs. As American war production got under way, the actual delivery of aid to the belligerent countries was being accelerated, and the Allies had already received the direct benefit of over $1,000,000,000 worth of the lend-lease aid. An agreement had been made to provide $:i.,000y000,000 worth of lend-lease aid to Russia by next June, in addition to earlier exports of Russian purchases. The acceleration of production and delivery which had already become marked will, no doubt, assist the much greater effort that has been promised now that the United States has entered the war. Rut the recognition of the immense strength of our new ally does not mean that we hope to creep into safety behind America. The Australian Commonwealth will maintain a front-line spirit and will continue to make a front-line fight. We have done, and shall continue to do, everything we can to facilitate American plans. We shall contribute all that we can from our necessarily smaller resources towards the common cause.

In connexion with the lend-lease aid to British countries, the question of an agreement setting out the general principles of assistance has been under consideration for some time. Under wartime conditions, it was impossible for the British Commonwealth to go on indefinitely providing dollars from its own resources for the purchase of American goods, and it was partly to meet such a situation that the lend-lease system was devised. Under section 3 b of the Lend.Lease Act, it is laid down that the conditions on which any government receives aid "shall be those which the President deems satisfactory, and the benefits to the United States may be payment or repayment in kind or property or .any other direct or indirect benefit- which the President deems satisfactory ". A preliminary agreement, setting out the conditions in respect of the United Kingdom, which has made itself the channel through which lend-lease aid has flowed to countries of the British Commonwealth, has now been signed in Washington (vide appendix, page 57). This preliminary agreement between the United Kingdom and the United States of America relates to the principle applying to mutual aid in the prosecution of the war against aggression. It provides for a mutual contribution by the signatory powers to the defence of each other; controls the useto which transferred articles may be put: and sets out conditions under which intact defence articles may eventually be returned. It can easily be imagined that very few defence articles are likely to have remained "intact" at the end of the war. The final determination of the obligation which Great Britain will assume towards the United States of America is postponed. However, it is provided that, in making that determination, the terms and conditions - . shall be such as not to burden commerce between the two countries, but to promote mutually advantageous economic relations between them mid the betterment of world-wide economic relations. To that end thuy shall include provision for agreed action by tlie United States of America and tin? United Kingdom, open to participation by all other countries of like mind, directed to the expansion by appropriate international and domestic measures of production, employment and exchange and consumption of goods which arc the material foundation of liberty and welfare of nil peoples; to the elimination of all forms of discriminatory treatment in international commerce and to the reduction of tariffs and other trade barriers; and in general to the attainment of all economic objectives s<>t forth in the joint declaration made on the 12th August, 1041, by the President of the United States of Am'erica and the Prime Minister of the United Kingdom.

It is provided that, at an early convenient date, conversations shall be begun between the United Kingdom and the United States of America with a view to determining, in the light of governing economic conditions, the best means of obtaining these objectives by their own agreed action, and of seeking agreed action by other like-minded governments. It will readily be seen that this provision - which takes it place as Article VII. of the agreement - foreshadows an agreed settlement of the whole subject of post war trade reconstruction, looks towards increased consumption of goods by the peoples of the world, postulates an attempt to solve the problems of employment and exchange, and goes some distance to assure the world that the four freedoms of the Roosevelt-Churchill Atlantic Charter of August last, to which Russia has since assented - freedom of speech, freedom of religion, freedom from fear and freedom from want - will be not mere platitudes but living actualities.

The proposed text of the agreement was submitted by the United Kingdom to the Commonwealth Government, and after close consideration it was decided that the future collaboration between the United States of America, the countries of the British Commonwealth, and other countries of like mind, envisaged by Article VII., could well help to provide a basis for the post-war economic order. Moreover, the Commonwealth Government was already committed in principle to such collaboration, by its adherence to the Atlantic Charter and by the subsequent multilateral declarations at Washington of the 1st January last. Consequently, it urged upon the Government of the United Kingdom, that an agreement with the Government of the United States of America should be concluded. Canada. South Africa and New Zealand have all concurred in the arrangement.

The lend-lease arrangement between the United Kingdom and the United States of America illustrates that the general question of post-war reconstruction is already assuming importance in the war aims of the Allies, who are not content to wait upon the creation of new machinery of international organization after the peace treaty has been signed. Another example of post-war planning is the constitution of the Inter-Allied Committee which met in London in June and September, and at which representatives of Australia and other Dominions took part, to consider the question of the postwar food relief for Europe. That question involves prior arrangements in regard to foodstuff supplies and shipping and cannot well be deferred until the fighting ends. Still more recently, Russia has suggested the establishment of a postwar organization on lines which extend beyond the matter of food relief, and which have commended themselves to the Commonwealth Government.

This is a war in which much has beer suffered in order to prevent domination of the world by sheer force, and in order to maintain established principles of decency and freedom. During the war, out of a proper respect for the opinionsof mankind, we have made open profession of these ideals. It is unthinkable that we should not make a serious attempt to see that those ideals are carried into effect.

There are certain aspects of the international situation to which I shall make brief reference. In Western Europe, the Vichy Government appears to be collaborating closely with Germany and Italy. The two latest instances are directly harmful to us. The evidence is clear that French assistance is facilitating the transport of Axis supplies across the Mediterranean for Libya. In the Far East, the Governor-'General of French Indo-China is apparently willing to place some of the French shipping in Asiatic waters at the disposal of Japan. Of course, it is not right to judge the French people by their present Government. The Government, vanquished in war, is in an extremely difficult position owing to the ever-present fear of German force, applied mercilessly but carefully and skilfully. At the same time,, the Vichy Government gave certain undertakings against unneutral conduct on its part towards Britain. The United States, largely because of its traditional sympathy with the French Republic, has been very anxious to give to the present Vichy Government every opportunity to try to perform its duty ; but its patience is fast becoming exhausted.

In regard to Portugal, I refer to a matter of deep interest to Australia. On the 17th December, Australian and Netherlands forces landed in Portuguese territory upon the island of Timor. This was purely a precautionary measure against a Japanese attack, which on reasonable grounds was believed to be imminent. Certainly no violation of Portugal's sovereignty was at all involved. We believed that we were acting in accordance with what Portugal itself wished. When Portugal protested violently, we were prepared to retrace our steps, an order to avoid embarrassment between London and Lisbon. An agreement with the Portuguese Government was made for the withdrawal of the Australian and Dutch occupying forces, providing that Portuguese forces were sent to carry out the defence of the colony against Japanese invasion. Despite our great anxiety as to the military position, we accepted the bargain solely out of our desire to prevent embarrassment either to Britain or to Portugal. The Portuguese relieving forces were actually en route to Timor with the full knowledge of the Japanese when the latter launched an attack on Dilli on the 21st February. That was the very event we had foreseen and sought to guard against. The Portuguese Government has formally protested to Japan against this cynical attack. It will be interesting to observe whether Portuguese troops will now insist upon the evacuation of Dilli by Japan.

The Japanese entrance into the war, and the German and Italian declaration of war on the United States, have had a marked effect on the other American republics. All, except Argentina and Chile, which are maintaining a text-book interpretation of neutrality, have now either declared war or broken off relations with Axis countries. At the PanAmerican Conference at Rio de Janeiro on the 25th January, a resolution was made the effect of which was to recommend to each State to break off relations with the Axis. The resolution was not in itself binding upon any State. Nevertheless, the general principle of American solidarity wasreaffirmed, and the United States of America and its American allies were declared to be non-belligerents. In the case of Uruguay, it was subsequently announced that the British Empire would also be treated as a non-belligerent. The principal effect of this will be, that repair facilities will be available for the vessels of the Allied countries concerned in the ports of the State which declares them non-belligerent. The major part of the export production of South American countries is being acquired by Allied powers.

After preparing a review of the international situation generally, one is acutely aware that to-day there is in reality only a war situation. We are now faced with the necessity of defending Australia on our own shores. In defending Australia, Australians are also fighting as much for our Allies as when they were fighting abroad; for the holding of Australia is essential to the final offensive by which victory will be gained. Therefore, when the invader comes, he will be fought here by a people who know that they are not only defending their homes, but are also standing on one of the critical battle-grounds in the history of mankind. We shall be defending liberty in its mostelemental form. We have done Japan no injury, unless it be an injury to join with our Allies in resisting not so much an attempt to control south-east Asia as a plan to dominate the whole of the illimitable Pacific. Ultimately, that insensate plan must and will be checked. In holding Australia, we shall be fighting not only for New Zealand and for every Pacific island but for Canada and the United States of America as well. Yesterday President Roosevelt said as much. Nor is this all. We recognize the equal importance of holding Burma and India. We are aware of the great struggle of the Chinese people to maintain their integrity and rebuild their nation, just as we recognize and sympathize with the aspirations of the Indian people to become one of the self-governing British nations, and as such to take part in the defence of the Allied cause in Asia.

Our actions as a nation must be governed by two broad principles - first, absolute solidarity with all the enemies of the Axis; second, the defence of Australia not only as our homeland but also as a key area in the plan of Allied and Empire strategy.

I lay on the table the following paper : -

International Affairs - Ministerial Statement. 25th February, 1942, and move -

That the paper be printed.

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