a11099 1-8 1950 - naa.gov.au · pdf filethe preliminary discussions and that we should...

National Archives of Australia transcriptTitle: Cabinet Notebook 1/8, 1950Reference: NAA: A11099, 1/8

[Spine]

8A.S. Brown24.10.50 – 4.12.50

[Cover]

No 1

Cabinet Notes

24.10.507.11.508.11.5013.11.5014.11.5021-11-5027-11-5028-11-504-12-50

[Page 1]

Tuesday 24.10.50

Agreed that 1500 ton of the tin plate should be bought from Japan.

202. Wheat – 1950–51 Crop No 14 Pool First Advance

Approved – No publicity until arrangements.

138A Wheat –Deferred.

16H National Health Services – Pensioner Medical Service – Staff and Accommodation.

Deferred until 12 noon.


Messages from Finnan re Prices

Ho Agreed that govt must confer. Price control is merely a means of recording price rises. Butit is the one thing that the Labour party advocates. Sooner or later we have to tell the public isthat it is no answer to 40hr week, basic wage rise and the general loafing.

[Page 2]

Spooner raises the question whether he should not ask the Senate whether they should notdirect their energies to the States.

If the States say they have financial limitations etc then we should go through all the motionsof assisting them.

Holt suggests that we might maintain some central co-ordinating machinery.

McBride opposes the establishment of any organisation – but thinks that we should be in onthe preliminary discussions and that we should co-operate:

We will go into conference with you. We should have McCarthy or Copland with us tocontribute his idea. (1) We are not taking over price control. We are not taking it over. Youtell us your troubles. (2) We would like to assist you. I have not heard of any trouble overinterstate transactions. Let the public know our attitude.

Anthony suggests a Federal Secretariat

[Page 3]

to assist in co-ordination.

White – Could you consider attaching a liaison officer to the States. Query whether weshould not arrange for a C/w Minister to be present so that problems affecting C/w can thenbe discussed. It may be desirable to attach a liaison officer in each state.

These suggestions would come out of if the conference.

Query should C/w invite states to examine the wool stabilisation scheme.

Prepare telegram to Finnan agreeing to conference.

C/wealth–State Financial Relations

P.M. mentioned the possibility of an earlier conference.


Arbitration Court

The situation arising out of the illness of the Chief Judge was discussed.

[Page 4]

134

continue to allow them to operate on parole – if satisfactory migration arrangements are madethey can with the approval of their govts be treated as part of the proposal provided they areof good character etc. –

16H National Health Service – Pensioner Medical Service – Staff and Accommodation

Mr Holts note on 134

Escaped POW’s still in Australia to remain here on parole pending conclusion of negotiationswith govts of former enemy countries – notably Germany & Italy.

If of good character and acceptable to us these to be included in any quota arranged withgovernment of relevant country. Such government to be notified and to concur in thisarrangement. Thus avoiding any charge of breach of convention.

[Page 5]

16H Contd

Chairman of the P.S.B. outlined the reasons for preferring the Social Services Dept to theHealth dept. – He estimated that 30 people will be required as against 75 in Health with anannual saving of £25,000 at least.

Sir Earle Page emphasized that the doctors would not take part in any scheme that wasadministered by Social Services. He suggests that this really amounts to the Social Services“cannibalising” the Health Dept.

The doctor should build up the index of dependents – and it is to his benefit that he keeps thisdown – the doctors have agreed to do this. You will need experienced professional staff in thedept of Social Services – both doctors and pharmacists. He also suggests that there should bea C/wealth Medical Service

[Page 6]

to which all professional men would belong.


Page, Spooner, McBride, Holt, Fadden, Anthony. Dunk is concerned only with administrationbut we are concerned with policy. As against a saving of £25,000 the Doctor tells us that if wedo this it won’t be settled for months. He has got the B.M.A. to work with him and they havepassed resolutions saying that they will cooperate with Dept of Health but not with the Deptof Social Services.

Proposed that the scheme should be started off in the Dept. of Health on understanding thatarrangement will be reviewed by the P.S.B. (and if necessary, Cabinet) within 6 months todetermine the most economical administration of the paying agent for doctors etc.

Dunk will draft a letter for Sir Earle Page some time after the scheme has started.

If effect of review would indicate that substantial reduction of staff would be made and ifB.M.A. agrees then it should go to Social Services.

[Page 7]

Desire of Cabinet is that be consolidated,

___________

‘and on review the most economical paying agency be adopted’. – Suggested by Dunk.

___________

This afternoon a motion to be conveyed to the Speaker of H.C. – Agreed to.

The moment Supply is through – put the Banking bill at the top of the list.

___________

[Page 8]

Cabinet – 7.11.50 10.15am

We have Banking bill; they have not failed to pass this yet. They have announced they willsend it to a ctee – and they can’t do this until the second reading is agreed to. I wld feel that atthe moment they send it to the ctee it wld be a failure to pass on the second round.1 TheSenate has done nothing. If they debate the motion to refer to a select ctee for a day that willwould be OK but for weeks would not.

The minimum period of time is 35 days from date of dissolution. That means dissolution thisweek if an election by on Dec 16. This means no election this year. The following need to bepassed

1 ‘to pass on the second round’ is inserted above the line.


Old Age Pension, Repat., Grants Bill, Sales Tax, Loan Bill, Income Tax,

Re-imbursement Grant, Postal Rates, National Training.

Wool Bill, Postal bill ready.

Suppose they drag the other bills on and fail to pass them.

Anthony suppose we carry parlt. up to a week before Xmas. If we can get dissolution

[Page 9]

then you could have elections in first week in February. If you haven’t got the other2

legislation by then you won’t get it at all. But if you have the legislation through then theComo bill is the issue.

How necessary is the legislation?

Take soldiers’ pensions & old age pensions. These have to be passed. You couldn’t meet parltbefore middle of February.

Even if you come back in February with a few bills still on the list you can reconstruct theattitude of non-co-operation and have a double dissolution within a few weeks.

___________________

Korea: The P.M. reported to Cabinet that UK. believes that there are up to 30,000 ChineseCommunist troops actively supporting Korea. No specific information that in organised units.U.S. communiques will take a different course after the election today.

[Page 10]

Rayon duties –

P.M. The original figures showed

local demand 55 m. sq yds

local production 20 m. ‘ “

Av increase 5 m. ‘ “

By 1952 local production 30 m.

2 ‘other’ is inserted above the line.


A duty of 9d wld sustain a bounty of 9d.

The deputation sd

Local production 7 ¼ m. sq yds

Imported 57 “ “ “

Total 64 m.

And this is a very different proportion.

P.M. quotes from para 3. of importers case & shows draws attention to serious discrepancies.Asked Roland Wilson to check figures in rayon importers memo.

White suggests a generous bye-law provision and a further reference to the Tariff Board.

P.M. suggests duty free entry under 45d.

Treasurer suggests that you might pay duty bounty or local production under 45d.

[Page 11]

McBride points out the necessity for ensuring that benefits are passed on to the public.

Figures to be broken up. Cabinet ctee to examine it.

Industry & Dev + T & Cto meet tonight. ü

_______________

See Wilson about break-up = ü

_______________

Treasurer wants ctee on wool subsidy – Marketing of Primary Products. ü

_______________

National Service –Service Ministers. L & N.S.

Anthony, Menzies, McBride ü

_______________


Cabinet at 11 am tomorrow. ü

_______________

[Page 12]

Cabinet – 11.15am 8.11.50

Submission 210.

The Minister read the Submission.

It was urged that there is no case in equity to hold this money back. It was recognized that thiswill have a strong inflationary effect but it was decided to agree to the recommendation andmake an announcement soon.

It was recognized that this might reduce the number of hardship cases under the wool scheme.

Submission 206.

The Minister read the Submission.

There are 3 possibilities.

1. We can say ‘no’ to Tasmania – (they might in any event put in it in their claim).

2. we can give a direct subsidy to Tasmania.

3. take freight into a/c in calculating cost of production.

[Page 13]

The Treasurer pointed out that the Board was getting wheat to Brisbane.

The Minister replied that Brisbane was the nearest export port for some wheat and insubstance it was self-supporting. Agreed that C/wealth wld pay subsidy for the time being –the Minister to3 endeavour to get this taken care of inside the industry in the negotiations forthe new plan.

Rayon.

The Minister read the proposed statement.

3 ‘for the time being – the Minister to’ is inserted above the line.


The Minister explained that deptl figures based on capacity suggested that by June 51 wouldbe 32 m. yds out of a total use of50 m. yds p.a.

Minister to prepare precise statement of the proposed scheme. – Whether it covers the wholefield, & also whether there are any strings. – reduce to writing.

_______________

[Page 14]

[Amcey? – unable to transcribe], Timber, Rayon and Match excise –.

The Minister reported.

Estimates will have to be guillotined.

Sittings on 4 days a week.

Holt says why not work out a time table with the Whips.

P.M. There are nevertheless a number of controversial bills – eg, national service,defence wool bill, old age pensions, soldier pensions, postal rates.

Party meeting next week.

Financial measures this week & next.

Estimates the following week.

Try initiating some bills in the senate.

Take postal rates after the wool bill.

Submission 204 – Approved.

[Page 15]

Cabinet – 13.11.50 – 2.30pm

Submission 208. – Approved ü

Submission 41.C. – Approved ü

Mr Francis asked – what about women’s services. –


Submission 207 – ü Approved. – Cut off day to be 30.6.51.

Submission 209 – ü Approved

Submission 215 – ü

Mr Beale wants Cordage Fibre Order and Jute Goods Order4 left over for decision by SenatorSpicer & Mr Beale.

Submission 1.F. ü

Approved

Rail Standardisation – South Australia – 53.A. ü

Approved. Subject to approval by P.M.

C/w Public Service – 216 ü

Approved. Mr White raised the question whether “may” should be “shall” and asked whetherleave of absence shd be limited to “once” & extend to “any” school.

Repeal of Superphosphate Bounty Act - 217

“Any school class or course of instruction” – on p.2.

If Chairman of P.S.B. certifies a man goes to a 2nd course of instruction – should make uppay. –

Note: Tell Premiers of what we are doing.

[Page 16]

Submission 217 ü Approved. Unless Mr Beale wishes to reopen within 48 hrs.

Prime Minister reported to Cabinet the on the meeting with the Prices Ministers.

Suggestion that P.M. might report to the house about his conference with Prices Ministers. ü

Economic & Social Council – Report on relief etc for Korea – ü

Program Jan ’51 early ’52.

$250 m. – 70% – our proportion

4 ‘and Jute Goods Order’ inserted above the line.


= £2 ¼ m. – Approved.

Suggestion that Aust. might draw attention to the fact that other nations might give a littlemore than their share on this to make up for lack of military assistance.

Xmas for troops in Korea – ü

Service Ministers to look into this.

[Page 17]

Keeping of the House ü

Mr Beale asked whether it was possible to have some sort of roster for the keeping of theHouse.

Minister in charge of the bill should arrange to have a second minister in the house at alltimes.

Mr White suggests that all Ministers should be in attendance on the adjournment.

Minister for External Affairs – statement ü

The statement to be considered by Cabinet before being made to the House.

Cabinet discussion next week & his statement on Thursday.

Cabinet on Tuesday morning.

Mr White suggests that it may be worthwhile if Dutch invited the Air Force to be present forexercises in N. Guinea. This to be discussed by Mr White & Mr Spender before being broughtto Cabinet.

[Page 18]

Submission 2.B. ü

Cabinet decided to re-affirm its previous decision.

War Service Homes. ü

Cabinet decided that expenditure was to be limited to the Budget estimate of £25 m. Matter tobe reviewed in February. Go as slow as possible. No specific cuts direction as to cuts.


Salaries of Permanent Heads. ü

Previous decision to stand.

Consider house meeting on Wed. morning at 11.am. –

Cabinet 10.am. Tuesday. – ü

[Page 19]

Cabinet – 14:11:50 10.15 am.

Prices & Subsidy – ü

The P.M. read a rough draft of his proposed statement to the House.

Mr McBride – You should emphasise the positive bit more at the end.

Mr Holt – This is a world problem – what is the effect of different methods – UK, US, &USSR. – USSR appreciated 1 to 10. UK has not arrested inflation in spite of all theirsubsidies.

Menzies: We will put in something explaining the reasons for paying the subsidies thatwe are paying.

Submission 200 –

The Minister read the digest on p. 3 and para 7 on page 11.

He pointed out that this really set down what was going on in the department at the presenttime.

Mr Holt questioned whether this was so.

[Page 20]

[Mr Holt raised the question of the approach of Woodward’s organisation to the States andthought that the present methods would cuase trouble. P.M. outlined what was going to bedone and said he would look into it further.]

Submission 200 contd

The Minister offered to show to the Ministers the long list of present activities. He regardedthe ministry’s job as a housekeeping job and not one of dealing with large spectacular doprojects. He referred to the survey of industry in Australia nearly finished & designed to showwhere gaps existed.


It was mentioned that electric 5 power had increased about 75% since 1939.

On the States public works programme he has been discussing tabling all our projects inVictoria with the Victorian Ministers. Could we not work out a list of priorities. TheVictorians agreed.

Mr Anthony raised the question whether

[Page 21]

the C/w salaries are out of line with the states. Take the Snowy. They have to refer all salariesto P.S.B. The top range of engineers in Australia are all paid ridiculously low. Up to £800.£900 pa. You can get all you want – we are getting abt 120. But above that we have not got asingle man because we cannot compete with what are paid overseas. The Snowy peoplewanted 75 from N.Z. but I kept them down to 20. This traffic in officers is two-way traffic.We are recruiting in UK for Q’land & we have offered to do as for other states. NSW askedus to do it for them.

Mr Anthony asked what were all the engineers and draftsmen doing and instanced the Darwintown plan.

Mr Beale drew attention to “a few ominous phrases” – eg. para. 3. on page 11. and said thatthis will run contrary to the statutory obligations of the Minister

[Page 22]

for Supply, and quoted section 5. of the Supply & Dev. Act.

He said he would not agree to any usurpation of his department’s functions.

(Give the P.M. a note on this matter – )

Mr Anthony points out that most of the activities mentioned are the functions of the otherdepartments or the states.

Mr Holt says it obv is obvious that somebody should co-ordinate development projects.

P.M. suggests that Ministers should get advice from departmental heads about particularproblems – and then two or three ministers should meet to consider these things.

Wool Bill

The P.M. reported that the he had reports that the wool bill would have a profound effect onthe farmers vote generally. Two things emerged –

5 ‘electric’ is inserted above the line.


1. An exemption for the small grower – eg. the first £1000 of wool.

[Page 23]

2. A time limit on the legislation.

They suggested that it should not operate beyond a certain date – pointing out that who ifprices levelled out the provisional tax would look after the problem.

They criticize the hardship provisions on the ground of machinery – delays – should not themachinery been completely decentralised. P.M. says he has in mind something like theAgricultural ctees.

Treasurer says there are 14 Boards all over Aust.

There is an estimate of £103 m. from this. The longer this is delayed the more complication.There will be a lag in collections – and this is estimated to be £10 m.

Then Commerce brought skin wool under notice.

This loses us another £5 ½ m.

To exempt the first £1000 – wld be £8 m.

[Page 24]

In order to maintain the £80 m. the rest of the sales will have to average £184 per bale.

To exempt the first £1000 can lead to all sorts of dodges – 46% of wool growers are alsowheat growers. We have just released £16 m. to them. What do you do with the fellow with£1020. How does the broker know whether this is within the first £1000.

There will be no difficulty with the hardship provisions.

There are a lot of people who have used the one or two bales of wool to give mum a presentand we will rope these fellows in for the first time just as happened with pay as you earn.

You can’t define a time limit.

The Treasurer pointed out that the averaging system would make it less hard than you wouldotherwise think.

[Page 25]

If the stablisation scheme goes by the Bo board we can’t pay that and cut this out.


McEwen – The wheat grower who runs sheep buys in and sells out each year. This meansthat altho’ he gets a big wool cheque he has big outlay for the new flock. You sometimes buysheep in full wool and this means that when you tax later on you tax off6 portion of the capitaloutlay.

The Treasurer replied that the definition of hardship was very wide and took care of this sortof thing.

You should make it quite sure that there is a definite time limit – and I also recommend the£1000 exemption.

Anthony – In US under pay as you earn the non-employee has to estimate his incomequarterly and send in his estimated tax. Our provisional tax is based on previous years income& we are only trying to

[Page 26]

bring provisional tax up to this years income.

McBride – Politically we must realise that the wool-grower has been subjected towhispering campaign. The reactions against it are greater than I expected and they arepersisting. We have taken certain steps and we should vary them as little as possible. ButLabour will introduce some amendments and we should not allow that to happen. This is acrude attempt to collect provisional tax. From the point of view of the big man this helps himbecause he will still have more to pay. But the small man is in a different situation. The realfear that is in people’s mind is whether nor or not this is to be a permanent feature of oursystem. We took this course because of the extra-ordinary increase in the value of wool.

[Page 27]

Unless there is a further increase there is no justification for this Tax next year.

Treasurer: The resolution provides that the rates share be determined each year.

Beale – Can’t we get a form of words which will make it clearer – add “if any”.

Holt – We must make up our minds and stick to what we decide. This bill wasadopted by a joint party meeting and we should not change.

(Query? Look into what would happen if you made it terminate at the end of this year.)

Fadden. Agreed to look into suggestion about “if any”.

1.5 pm. 6 ‘off’ is inserted above the line.


_____________________

[Page 28]

21-11-50 Cabinet

Business of the House

Conference 8th – 11th

Mr Spender – would ask leave to make a statement on Thursday.

1. Netherlands N.G. –

Full discussions with Stikker, Dreiss and Minister for Colonies. The commercial interests inHolland are putting strong pressure on govt to make a deal about Dutch N.G. D & S say that itwill not receive their support. They will not make any compromise at all. I suggested informalmachinery for defence & security. He wld make no commitment but suggested we resubmitthe matter after the cfce. They did not want to offer a trusteeship but if pressure became tooheavy they might do so. The only claim to Dutch N.G. which the Indonesians have is that itwas previously administered by the Dutch. I discussed the matter with Bevin & Dening &Acheson. They wanted to

[Page 29]

take the heat out 7 of the claim. The matter still has its dangers because of the pressure fromDutch commercial interests.

There is now some suggestion of Communist infiltration into Dutch N.G. from Indonesia.

White. Plessman said that there is likely to be some coup – Dec. 27 is the day. I amsorry to learn that the defence appreciation has been made w/o reference to External Affairs.

[Loose page – written in pencil on larger paper – context suggests insertion at this point]

28/-34 500

7 ‘out’ is inserted above the line.


New Guinea – Dutch,

21.11.50 #28–29–

C/wl interests putting pressure on govt to compromise with Indonesia. Suggest Tendersuggests informal machinery for defence and security. Bevin, Dening & Acheson want to takeheat out of claim. Suggestion of Communist infiltration into Dutch N.G.

Pacific Pact 21.11.50

Acheson & Dean Rusk want peace treaty with Japan w/o cfce

Re-armanent of Japan –

US bases in Japan – wanted by US.

Territories not to be given back.

Attitude of UK. Can. India, NZ., Philippines – to peace treaty.

[Page 29]

Pacific Pact

I saw Acheson, Dean Rusk. They want a treaty with Japan, they want it without a cfce if thatcan be avoided.

They suggest going ahead w/o Russia if necessary. USAs proposals do not include anyprovision limiting the re-armanent of Japan. They say do we or do we not intend to attractJapan to our side of the fence. The position

[Page 30]

of Japan is similar to that of Germany. I said that this was unacceptable to Australia. I did notthink that Japan would refrain from inter-national blackmail. They say you can’t imposecontrols on Japan w/o an occupation force and they are not prepared to put one in. They wantto give the Japanese control of Japan as quickly as possible. They would make a collateralarrangement by which they would have bases in Japan. They would not give Japan back anyof the territories.

I have tried to strengthen U.K. up on this. We want to get the best bargain we can. U.K. isinclined to think we exaggerate the danger from Japan […] but wants some economicrestrictions to help her own trade. Canada is similar to US. India supports Asia for theAsiatics. N.Z., Philippines and ourselves are the only ones to oppose the suggestions.


[Page 31]

P.M. When I was there they were talking only of an armed police force developinginto a defensive army, a coastal navy, and a tactical air force but not a strategical air force. Itis clear that these thoughts are moving in the direction of a “softer” peace.

We said on Pacific Pact – we had been hoping to start with C/w countries & perhaps US.They said you must have some Asiatic countries and India & Indonesia is not likely to comein. They sd what about Japan. I sd we could not consider that. I mentioned the Pact to thePresident. He had no doubt that they would come to our aid. 1. There is no organic body to8

which Aust. is a party which determines overall strategy. The only organ is the North Atlanticetc. This over-emphasises the N. Atlantic point of view & it excludes a vital area fromdiscussion. Australia is expected to send troops overseas & if there is no certainty of help toAustralia

[Page 32]

I waited till Dean Rusk got back from MacArthur & I saw him & Dulles.

Finally they sd we shd try to find some formula which wld –

1. publicly indicate U.S. concern with Aust.

2. some machinery

3. some liaison on political level.

I agreed that I wld make a statement in the House – This has been approved by them –

Reads statement.

We have arranged a loose exchange of bases with US & Aust.

3. I will bring papers in on Cocos Island and also on New Hebrides. –

I proposed to have a short statement of principle, Korea, Peace treaty with Japan, Pacific Pact– and table a factual statement as an appendix. – Probably ready tomorrow afternoon.

[Page 33]

In the last 10 days there has been an attempt to [fly? – unable to transcribe] chase planes intoManchuria. U.S. wanted to give the authority – “hot pursuit”. We thought that we should bedamp this down a bit. We did not have many facts. U.K. was even less enthusiastic than we

8 ‘to’ is inserted above the line.


were. We formally made suggestions to U.K. – U.K. has been thinking of a “demilitarizedzone”. Truman & Acheson are trying to take the heat out of it.

Rayon duty –

Proposal was that 9 m. yds costing not less than 45d. cld be admitted under by-law. By-lawadmission extended to goods “shipped” as well as goods “entered”.

Sargood says 45d wld be too low.

– O’Sullivan says he thinks 48d might be right –

McLeay says Sydney view is the same – another 6d is needed.

If you limit it to a price & a quantity

[Page 34]

and it will cause a scramble. Buying will have to await the permission to import within the 9million.

McBride says unless you limit it to 9 m. may not the U.K. mfrs bring in 18 m. before the timeruns out.

It was agreed that the proviso that this should be restricted to rayon imported for the purposeof manufacture should not apply.

1. Increase 45d to 48d

2. Tariff Bd for review in light of experience to June 30, 1951.

3. (a) Unlimited but position watched so that by-law entry terminated when sufficient hasbeen imported; or

(b) limitation of 9 million yds2

3.(b) – agreed to.

Dedman Episode

Beale: There is no doubt that this was not a genuine visit by Dedman.

[Page 35]

He only goes to Corio. Broadby says he appointed Dedman as his associate delegate to aregional ctee. But the work is done by an industrial committee.


Holt: One of my officers was notified that D. was going down. D. asked B. toappoint him to this particular job. Armstrong arranged this thing for Dedman.

Beale – The story is different from the departmental explanation. –

McBride – Calwell takes a car regularly to Ballarat.

_________________

Finnans matters looked at and dealt with by Ctee on Econ. Policy.

_________________

Discussion on […ds? – unable to transcribe] report – Apparently no action to be taken.

_________________

Keep the Banking bill above the budget on the Senate list.

_________________

138B. – Approved. – ü note […] payment about Dec. 16.

[Page 36]

Submission 221.

Permissible income £5.17.6 to £8 p.wk

Approved.

12.50pm

__________________ 12.5p-

P.M., Treasurer, Casey, White, McBride, Holt, O’Sullivan, 9 – 2.40pm, 22.10.50

EV. Nixon –

Treasurer to run our terms of reference.

(Get these from Nette).

___________________

9 ‘O’Sullivan is inserted above the line.


All day Friday – starting next week –

10 minutes limit on Roads Bill.

1. Statement on Overseas Service –

Yes. ü

Note that War Service Homes Act would need amendment to provide for Korea.

2. CMF troops pay to be free of taxation.

Treasury to write paper on this for Monday night.

3. Aliens joining the C.M.F.

See info. [? – unable to transcribe]

4. Purchasing houses for servicemen when they come on the market.

Agreed in principle – Scheme to be submitted to the Treasury.

[Page 37]

5 Hostels in the cities – for servicemen on leave – or men coming down to enlist.

Further details as to size of establishment and cost.

3. Aliens joining the C.M.F.

Should be allowed to volunteer if 12 mths residence & if they have taken the firstformal step towards naturalisation.

Agreed to – amendment of Act may be necessary.

Sir E. Herring’s suggestions –

Attractions of service, – insurance Cos to be written to on this point.

[Page 38]

Cabinet 27.11.50

World Premiere of Kangaroo – approved.


P.O.W. Subsistence claims – recommend that delegates to the Peace Cfce be instructed todemand reparations etc. – approved – this applies both to the Japanese & the Germans.Question of getting support of UK & US for this type of claim. –

Aluminium Commission –

Production Expected by 1953 & be producing Australia’s requirements of tons. C/ionbeing run by part time people. George Watson running Aust. Engineering, Walter Scott is alsoa director. They want a General Manager for this which is a huge defence priority. Half thebldgs are up. Mid ’53 power will be there. £1 m. has been spent, £3 m. is the estimate. Wecan’t stop in our tracks. Three people concerned. Dodd. Sec of the Commission. Watson &Walter Scott are sharing responsibility. Carmichael is a technician but he has not managerialcapacity.

[Page 39]

Suggestion is Keast at £4,500. Cosgrove agrees. Jensen agrees also. Commission will re-openthe matter with Keast & WS Robinson to let him go.

There is a good chance of making this pay – ultimately –. On present state of the market itcould pay. Keast is 58.

P.M. Keast has been paid £7000 to £8000 pa by B. Hill. But he & WSR don’t seemto get on. They have concessions for zinc in Greenland. Keast is not keen to go to Greenland.

Page. Are we committed beyond redemption.

Beale. There is 1 m. tons of bauxite in Tas – [lime? – unable to transcribe] about 7 m.tons in Inverell.

Page. We wouldn’t be in the race with Canada, except in a war.

P.M. – We can’t buy aluminium cheaply now and we need a manager.

Casey: Aluminium is on the up and up – its peace time uses are growing. – We have tomake aluminium in Australia.

Private enterprize is not doing to job.

[Page 40]

Anthony – I am uneasy about this. WS Robinson told us it was not economic to produceit. Tasm Then Beasley on the eve of an election decided to establish it in Tasmania. ThenRobinson made a statement that it was economic. Robinsons men then reported on everything


except the cost of production of aluminium. Keast could ensure that the price of aluminiumwas kept high enough to ensure that Robinson’s interests were protected.

Francis – I am not satisfied that we have sufficient bauxite in Australia –

McBride. Essington Lewis advised in favour of this and we should now go on with it.

Agreed (1) that Gen Manager necessary

(2) Keast is suitable – no more than 5 years – written contract.

(3) Salary of £4,500 is necessary. 10

Future of the industry to be considered in due course.

[Page 41]

Callide – If we are to deliver 300,000 tons p.a. of Callide coal we need 5 more colliers. SA &Vic will urge us to keep on subsidizing Indian and S. Afr coal. Callide can be used if mixedwith this. Should we not say you must take a proportion of Callide if you take want Indianand S. African coal.

Casey. I was surprised when Macdonald said 15/-. He wants to get the Callide coalsubsidised without substitution for NSW coal. He has the right to 14.28% of NSW coal. Theywill not get it. I sd we have to maintain the theory of substitution. But there is such a back logthat it will make no difference in fact. He can use it for rlys during the ‘green’ 6 mths of theyear, the cement, & power – in all cases mixed with NSW coal.

McBride – Once we start to subsidise Callide

[Page 42]

coal we will be subsidizing it permanently. Once you get equipment there it becomes apolitical bombshell. We are still awaiting advice from the Victorian cabinet.

What do we do about the shipping and shipbuilding problem. We have been dithering about it– We must have a ½ day on this.

10 in the original ‘Salary of £4,500 is necessary’ was the 2nd point, ‘Keast is suitable’ the third point; a double headed arrowindicates that they are to be transposed.


Glen Davis

9A. Connellan Airways

Casey says you could easily use £ ¾ m. for strips and £ ¾ m. on aircraft & other things if thisis handed over to T.A.A.

Agreed to No 1 proposal.

Mr Spender reported that Sydney dispute & Ormonde dispute settled.

[Page 43]

Glen Davis. 34.C

Experts here on Thursday – 11.30, after questions to consider this matter further.

Aorangi.

St Laurent said they were satisfied that Canadian Pacific did not want the subsidy. Theywanted an excuse for cutting out the ship –

1. The ship was old. 2. A new line might take up the work. 3. Air traffic would be a realcompetitor.

Lets find out through Ottawa whether the Canadians are prepared to play.

[Page 44]

Tuesday 28-11-50-

Agendum 224.

Mr Spender went thru the summary of correspondence and suggested consideration of acompany including the public.

McLeay: There is a coal mine 25 miles11 south of Newcastle which they are using tosupply a power station there.

There are 3 mines in the area – within 20 miles – but if you take this you deny it to Aust Iron& Steel.

Spender. Any money needed should be raised by the Coal Board on over-draft from C/wBank – guaranteed by the C/w if necessary.

11 ‘25 miles’ is inserted above the line.


Concise conspectus of where we are going in the matter. This gives us the entry into the govtof NSW –

Look at Section 18.

Housing & amenities etc will need to be provided.

Report should be called for from JCB, nature of obligation, various ways of dealing with this

[Page 45]

price of coal, sinking fund, total capital required, how it is to be provided.

P.M. Power station is well advanced. Let us have put down for McGirr the details ofthe proposition (& how it arose). – we are under a moral obligation if we are held to it. I willbe in S. in a fortnight – in the meantime report – discussion with M. for Mines & McG & Ch– JCB we urge NSW shd run the mine as adjunct to power station. We are prepared to assistin obtaining finance. If McG says No. Then we either have to allow proposition to die, or sayto JCB you will have to go ahead & we will have to provide finance. But if so we make publicstatement that we don’t want to go on but have to provide power but we are open to proposalsto convert it into privately owned mine

[Page 46]

making the point that obligations were entered into by the previous govt. – [Cook? – unable totranscribe] – It is most urgent. Work should begin almost immediately.

When discussing with McGirr it will include offer to hand over equipment which we nowhave.

After questions – Marketing of Primary Products.

Submission 211 – Approved.

“ 212. “

“ 213. “

[Page 47]

Monday December 4th 1950

Submission 226

The A/G reported that he proposed to make some additions to the T.P. Bill to bring it up todate – that there were great difficulties about the corporations power. At least you cannot deal


with the formation of companies: existing companies could therefore avoid it by subsidiaries.You need to bring it under the Defence power but to do this you need to bring materialscontrol and N.S.R.B. & this needs a good deal of thought.

(1)12 So we decided to amend. T.P. bill and re-enact it. The point was raised that there shouldbe some outside representation on the Board. Balmford (Chairman), C/w Bank and outsider –alternatively (2) Balmford, C/w Bank, Treasury and 2 outsiders. –

Query whether you could not amend

[Page 48]

(3) the regulations by excluding the right of appeal.

(4) A question was raised whether the C/w Bank should have some direct control of hirepurchase and consumer13 credit accommodation. The question whether the Senate would letthis type of legislation through was also raised.

This problem can be dealt with in part by capital issues control, and in part by by C/w Bankadvance policy.

(5) During the recess we should give consideration to preparation of an act along lines of USact.

1. This problem should be dealt with by C/w Bank policy on cap issues reg.

2. Investment Control Board. Balmford (C), Treasury & Bank & 2 outsiders.

(6) Introduce bill in Senate –

Sen. Spooner suggests reduction in migration and development program.

P.M. says N.S.R.B. will have to look at this

[Page 49]

particularly in the light of our defence needs. –

Our advice is too inbred – can we have a few fresh minds.

Spooner We could say we will not build any more migrant camps etc. We will make dowith what we have.

12 the numbers in this list appear to have been added after the original notes were written.13 ‘consumer’ is inserted above the line.


Page We are trying to do everything by govt. – look at the Snowy – we should makecontracts with overseas contractors.

? Is there anything in the Act about Public Works necessarily being done by the government.

Beale says a good many things are being requested by private enterprize.

(7) We won’t seek statutory authority at this stage by N.S.R.B.

Spooner – My brother is convinced that plenty of people will come to Aust & bring theirown labour & plant.

[Page 50]

Submission 234

If re-appointed it is thought they would have to be re-appointed for 3 years.

ü Approved – extension for 12 mths during which time an election can be held.

Wheat.

Wheat stabilisation provides for annual cost of production. This becomes guaranteed price forhome consumption and for 100 million tons export. Twelve mths ago price 6/8, – & anincrease of 5d.

We decided to absorb the 5d. as subsidy. Legal opinion is that as we did not proclaim it it hasreverted to original price of 6/3. But there has been an increase of 9d per bushel this year.This would raise home consumption to 9/10 7/10. The policy question is whether we take thisris ½ rise14 by subsidy or by allowing a price rise of ½ d per 2lb loaf. 7d per bushel is ¼d per2lb loaf.

[Page 51]

There is a legal problem of getting over how you proclaim the price at a price different byfrom the sale price. But Bailey says he can get over this.

P.M. These costs of production have been worked out on a 12 bushel averageyield.15 But now it is higher. – The Act of 1947 says that

Last yrs average was 16

10 year average – 12.8

14 ½ rise is written above ‘ris’.15 ‘yield’ is inserted above the line.


This would take 4d or 5d off cost of production.

The Act says you are to operate from the cost movements since 1947. – I think you could alterthe base consistently with this. But it would be a real argument with the industry.

I have opened up discussions with the industry on a ten year basis & they will have to be on arealistic basis.

[Page 52]

P.M. If we proclaim this new price and we drop the 1.25 m. subsidy on […] the 5dthen bread will rise by ½ d. But are we going to subsidise on a basis the of this sort. I made astatement on the futility of subsidies for this purpose.

Page. This home consumption price was brought in when export price was muchlower. But the time is coming when it has to be absorbed in the cost of living. This is the onlyway to slow down wage rises.

McBride: In any case the Austn consumer is getting his wheat at half the price. Eggs willprobably go up about 2d per doz but they are getting subsidised about 1/- per doz now.

The wheat grower is already co subsidising local consumer about £30 m. p. annum.

Agreed to let the whole ½ be absorbed into the local price.

[Page 53]

Qantas

Purchased 2 constellation from Air India – one lost in Alps. –

A question was raised whether we should compete with B.O.A.C.

Critical examination to be made by Dept of Civil Aviation.

The Act says after consultation with States. I will do it as usual by telegram & will say in thetelegram that there will be no subsidy. Agreed.

My answer to Eggs. is this. There This is the end of the export season. We will be negotiatinga new egg agreement later.


Re-equipping the Air Force with jet16 air-craft

It has been approved by defence ctee. 77 Squadron is equipped with Mustangs & I asked thatthey did not get high altitude work. They would be much better off

[Page 54]

with Meteors. We can’t get Vampires or Hawkers 1081.

UK will give us 6 per month for a total of 36 aircraft after 3 months. C in C has discussedwith Stratomeyer

UK will need to make better delivery rate. It will cost £2 ½ m. extra on the Air Force part ofthe 5 year progam.

Meteor is a much better job than the Vampire. Our standard is the vampire but Britishstandard is meteor.

Mr Beale. Are we to continue to make vampire or mustangs as well as this.

White. We have about a dozen vampires and we are now getting two a month. All theother squadrons have mustangs. I do not think that you can get vampires in England. Even ifthis is an orphan squadron you have to go ahead with this.

[Page 55]

McBride. Def Ctee rec. subject to ensured rate of delivery – 36 jet meteors + 4 jet meteortrainers at total £2 ½ A. be approved as an addition to air program.

P.M. It looks as though we will always be manufacturing planes that we don’tpropose to use.

Beale – Quite soon we have to look at aircraft production policy in Aust. What is ourwar? Is it mainly against submarines? For many purposes the mustang is a remarkable oneplane.

McBride. The Vampires are adequate if we are thinking of combating aircraft offcarriers. But if we are to fight in M.E. or Korea we have to get another sort of plane.

P.M. To what extent are the opposing forces using jet aircraft.

[Page 56]

16 ‘jet’ is inserted above the line.


P.M. When I was in Japan they were reconverting […] jets to mustangs becausethey were better for air to ground operations. Also they had longer endurance.

If our role is now to be combat and not reconnaissance should not we be told.

McBride: I image that Stratomeyer wants us to change our role because this 77 squadronis a good squadron.

P.M. If within the next week the Chinese flood in we are going to be out.

White. This is our best aircraft for here.

McBride. If not used in Korea they will not be a loss.

Beale: If this is question of re-equipping our squadrons I would like time to considerit. We are looking at the problem of the best fighter air-craft in England. This proposalworries me at the moment.

[Page 57]

White. Wha We must be first with the latest. We have the chance of getting meteors.

McEwen. If this is a decision which has been made prior to the most recent happeningsin Korea it should be made the subject of more comment from the Chiefs of Staff.

White – We want to take our aircraft with us if we are to operate in the M.E. We can’t[batten? – unable to transcribe] on.

Beale. I would like to see this coupled with a general review of the aircraft productionprogramme.

Page. Shouldn’t we look at the whole defence programme.

McBride. I agree. The program is out of date. Army wants £39 m. to bring the thing up tostandard. We are up to £83 m. for this year already.

P.M. Did Chiefs of Staff approve of this only in relation to Korea or on othergrounds.

McB. Mainly in relation to Korea, I believe.

[Page 58]

I would like the Chiefs of Staff to be asked if this is purely a Korea proposition or whetherthey would recommend it apart from that.


If the second then Cabinet approves it.

Beale. I wld like aircraft production looked at generally.

P.M. You had better get in touch with Chiefs of Staff.

General Reconnaissance Aircraft

We have flight in Malaya – 2 squadrons, one at Amberley and one at Townsville. Thisproposal is an addition to the Lincoln program.

Lockheed. P.2V-5 Aircraft for general reconnaissance duties.

P.M. All this is very disturbing – what are we going to use the long range bomberfor?

We have no sea-reconnaissance aircraft. Proposal is to purchase 12 of these aircraft.

P.M. We have an extensive building programme but we don’t build anything whichwe want.

I have no confidence in their recommendations. Jones contributes nothing – Rowell isdisappointing –

Spooner – Could we have a couple of business coves on this committee.

Wing Commander Richmond in England, Wackett, Armstrong.

Our no 10 squadron needs equipping. This job is vastly more efficient than the Lincoln.

Chiefs of Staff – tomorrow at 10.

Submission 113. Approved.

Submission 205. Mentioned.

P.M. asks what has happened about sharing of business.

[Page 60]

Mr White – reports that this was rejected by Cab Ctee but T.A.A. had asked permission totalk with A.N.A. on sharing of mails. Holyman is worried and is talking of closing ANAdown.


There is also to be talks about rationalisation, but all this is pending the financialinvestigation.

Submission 223.

The Minister for Defence read the Submission – relevant parts only – on the liquor question.

Suggested that

(1) Trainees should not be served.

(2) Trainees under 21 should not be served. It was suggested that if (1) was approved therewould be no cases of trainees over 21 for three years.

P.M. agrees with the legislative principle suggested but a decision between the twoalternatives was deferred.


Persons mentioned

Surname Given names Position

Acheson Dean Gooderham US Secretary of State

Anthony Hubert Lawrence Postmaster-General

Armstrong

Armstrong Walter Stewart Maintenance Group, RAAF

Bailey

Balmford Walter Crowther Commonwealth Actuary, Department of the Treasury

Beale Oliver Howard Minister for Supply

Beazley Kim Edward Member for Fremantle

Bevin Ernest UK Secretary of State for Foreign Affairs

Broadby Reginald Roslyn Secretary, Australian Council of Trade Unions

Brown Allen Stanley Secretary, Prime Minister’s Department

Carmichael

Casey Richard Gardiner Minister for Works and Housing and Minister for NationalDevelopment

Cook

Copland Douglas Berry Vice-Chancellor, Australian National University

Cosgrove Robert Premier of Tasmania

Dedman John Johnstone Member for Corio, 1940–1949

Dening (Mayberley)Esler

Assistant Under-Secretary, UK Foreign Office

Dodd Henry Albert Secretary, Aluminium Production Commission

Dreiss

Dulles John Foster Consultant to US Secretary of State

Dunk William Ernest Chairman, Public Service Board

Fadden Arthur William Treasurer

Finnan Francis Joseph Minister for Labour and Industry and Social Welfare,NSW

Francis Josiah Minister for the Army and Minister for the Navy

Herring Edmund Francis Director-General of Recruiting, Army

Holt Harold Edward Minister for Labour and National Service andMinister for Immigration

Holyman Ivan Nello Managing Director, Australian National Airways

Jensen John Klunder Secretary, Department of Supply and Development,1948–1949

Jones George Chief of Air Staff

Keast Asdruebal James General Manager, Broken Hill Associated Smelters

Kelly WilliamRaymond

Chief Judge, Commonwealth Court of Conciliation andArbitration

Lewis Essington Chairman, BHP


MacArthur Douglas US General

McBride Philip ArthurMartin

Minister for the Interior

McCarthy Mortimer Eugene Chairman, Commonwealth Tariff Board

McDonald John Gladestone Premier, Victoria

McEwen John Minister for Commerce and Agriculture

McGirr James Premier of NSW

McLeay George Minister for Shipping and Fuel and Minister for Transport

Menzies Robert Gordon Prime Minister

Nette Percy William First Assistant Secretary, Department of the Treasury

Nixon EdwinVan-der-Vord

Accountant

O’Sullivan Neil Minister for Trade and Customs

Page Earle ChristmasGrafton

Minister for Health

Plessman

Richmond WingCommander

Robinson William Sydney President, Consolidated Zinc Corporation

Rowell Sydney Fairbairn Chief of General Staff

Rusk Dean US Assistant Secretary of State for Far Eastern Affairs

Sargood

Scott Walter Member, Aluminium Production Commission

Spender Percy Claude Minister for External Affairs and Minister for ExternalTerritories

Spicer John Armstrong Attorney-General

Spooner William Henry Minister for Social Services

St Laurent Louis Stephen Prime Minister, Canada

Stikker

Stratemeyer George E US General, Far Eastern Air Forces

Truman Harry S US President

Wackett Ellis Charles Air Member for Technical Services, Department of the Air

Watson George H Chairman, Australian Aluminium Production Commission

White Thomas Walter Minister for Air and Minister for Civil Aviation

Wilson Roland Secretary, Department of the Treasury

Woodward


Abbreviations and symbols

#28–29 pages 28–29 ?

£2 ½ A. £2 ½ Australian

a/c account

A/G Attorney-General

abt about

altho’ although

ANA Australian National Airways

Aust Australia

Austn Australian

av average

B Hill Broken Hill

B Broadby?

bldgs buildings

BMA British Medical Association

BOAC British Overseas Airways Corporation

C in C Commander-in-Chief

C/ion Commission

C/ion Commission

C/w Commonwealth

C/wealth Commonwealth

Cab Ctee Cabinet Committee

Can Canada

cap capital

cfce conference

Ch ?

cld could

CMF Citizen Military Forces

Co/Cos Company/Companies

Como Communist

contd continued

ctee/ctees committee/s

D & S Dreiss & Stikker (?)

D Dedman

Dec December

Def Ctee Defence Committee

dept/deptl department/departmental

Dev Development

doz dozen


Econ Policy Economic Policy

govt/govts government/governments

HC ?

hr/hrs hour/s

Industry & Dev Industry and Development (Committee)

info information

JCB Joint Coal Board

L&NS Labour and National Service (Department of)

m million

M ?

ME Middle East

mp annum million per annum

McB McBride

McG McGirr

mfrs manufacturers

mths months

N Atlantic North Atlantic

N Guinea New Guinea

NG New Guinea

NSRB National Security Resources Board

NSW New South Wales

NZ New Zealand

p page

pa per annum

PM Prime Minister

p wk per week

para paragraph

parlt. parliament

PM Prime Minister

POWs prisoners of war

PSB Public Service Board

Q’land Queensland

reg regulation

rlys railways

S Sydney?

S Afr or S African South Africa/n

sd said

Sec Secretary

shd should

sq yds square yards

Supply and Dev Act Supply and Development Act


T & C Trade and Customs (?)

TP bill ?

TAA Trans Australia Airlines

Tariff Bd Tariff Board

UK United Kingdom

US United States

USSR Union of Soviet Socialist Republics

w/o without

wld would

WSR William Sydney Robinson

Xmas Christmas

yds yards

yrs years

a11099 1-8 1950 - naa.gov.au · pdf filethe preliminary discussions and that we should...

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