Letter, CANBERRA, 9 August 1949
You will be aware of the leading part which Australia has played in various international conferences over recent years in writing into agreements reached both the principle and the obligation that participating Governments should adopt policies designed to promote full employment in their own countries. First at Hot Springs F.A.O. Conference in 1943, then at Philadelphia I.L.O. Conference in 1944 and at the Bretton Woods Conference in the same year, leading up to our stand at the United Nations Conference on International Organization at San Francisco early in 1945, and followed up at the sessions of the Preparatory Committee and the United Nations Conference on Trade and Employment at various times from October 1946 to March, 1948.
As a result of these exhaustive international discussions a considerable body of agreement was reached providing for concerted action to prevent the international spread of recessions. The principle of full employment policy and the obligation on member Governments to adopt such a policy are contained in Articles 55 and 56 of the Charter of the United Nations, while Chapter 11 of the Havana Charter provides for ‘concerted action under the sponsorship of the Economic and Social Council of the United Nations’ for the ‘avoidance of unemployment and under-employment’. Participants in the General Agreement on Tariffs and Trade (Chapter IV of the I.T.O. Charter, now in provisional application) are also committed to observe the full employment articles of the Charter although the Charter as a whole is not yet in force.
I draw attention to these agreements and the part which Australia played in their content because the situation which was then envisaged, and which they were principally designed to meet, is now upon us, namely, a serious fall in employment and demand in the United States. The effects of the United States recession are already very evident throughout the world, particularly in the fall in the value of exports of the Sterling Area to the dollar area and the consequent balance of payment difficulties which necessitated the recent London Conference.[1] The effects of course, are not only confined to the Sterling Area, but are being felt in Western Hemisphere countries too.
If steps are to be taken to check the international effects of the fall in employment in the United States they must be taken quickly, and the first step I suggest should be to endeavour to implement the policies which have been already agreed to after exhaustive international discussion at Bretton Woods, San Francisco and Havana. There is no need to open up any new questions at this stage. The main principles have already been accepted and it is now a question of their application to meet the situation for which they were designed.
A discussion of the question is at present taking place at the Ninth Session of the Economic and Social Council at Geneva and the Australian Delegation has been instructed to press for a resolution by the Council which would refer the question to the next General Assembly, which opens on September 20th. The Assembly has become a very effective forum for the discussion of critical world problems and its discussions have a much greater impact on Governments and public opinion than those of any other international body.
The Economic and Social Council has not yet come to a decision but several countries, particularly France, the United Kingdom and U.S.A., have proposed that a report on the question should be prepared for the next session of the Council, January, 1950, by the Economic and Employment Commission. As we have instructed the Delegation, such a course seems more likely to lead to delay and ineffectiveness than to the prompt action which is necessary to meet the case.
If the Australian Delegation is unable to obtain a satisfactory amendment to the joint French, United Kingdom, United States’ proposal at present being used as a basis for discussion, I suggest that Australia should place the question of full employment on the Agenda for the Assembly on its own initiative. I feel sure that such a step would enable the question to be discussed fully in the most effective international forum at present in existence and could do more than would be possible by any other means to bring home to member countries the obligations which they have already accepted to adopt full employment policies. It would be our object to set on foot international action along the lines envisaged in the Charter of the United Nations and the I.T.O. Charter.
_[1] Commonwealth Finance Ministers’ Meeting, July 1949. See Volume 14.
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[AA : A1838, 778/5/4]