381 Mr R.G. Casey, Minister for Supply and Development, to Mr R.G. Menzies, Prime Minister

Cablegram C34 LONDON, [23 November 1939], 12.10 a.m.

MOST IMMEDIATE MOST SECRET FOR PRIME MINISTER

Reference your secret and personal cable of yesterday. [1] I will reply to your first paragraph tomorrow. [2] Regarding tentative proposals to ship special division, War Office envisage the possibility of first brigade group approximately six thousand six hundred troops embarking about third week in December in following fast passenger liners 'Dunera', 'Rangitata', 'Orion', 'Strathallan', 'Sobieski', 'Empress of Japan' and 'Empress of Canada'. War Office's tentative suggestion is that second brigade group might sail at end of December or as soon after as possible, ships tentatively allotted 'Strathnaver', 'Orcades', 'Pilsudski', 'Otranto', 'Strathaird', 'Orford'. Such of the above ships as are normally on the Australian route would carry normal cargoes from Australia to England except for space required for military equipment. Other of above ships which would not be required to return to Australia from Egypt for second troop carrying journey would be fully loaded with general cargo particularly wool, bagged wheat, flour and refrigerated produce for England. There will be no interference with the cargoes of any of these ships except to carry equipment and stores accompanying troops. Above proposals would provide improvement in commodity carrying facilities in respect of such of the above ships as are not normal on the Australian route and in respect of two Orient ships which come into service earlier than company intended and the 'Strathaird' which would also go through to Australia instead of returning to England from India.

Project for transport of remainder of division with bulk of motor transport not yet completed and will be more fully considered in conjunction with movement of New Zealand troops when probable dates of embarkation can be given. Shipping allotted depends upon return of certain ships to Australia from Egypt after transporting first echelons together with additional ships which may be available in Australian or New Zealand waters at the time.

At present juncture War Office regard transport of troops as having absolute priority and in any event the above-mentioned are essentially passenger ships with certain cargo carrying capacity.

Regarding the shipping problem generally. The position is that Britain entered the war with reserves of wheat, timber and ores considerably below what is regarded as necessary, and in consequence they have been much concerned to build up reserves of these commodities as quickly as possible. This is in process but is not yet satisfactory. It has entailed taking wheat in particular from the nearest market Canada to make the best use of the available shipping. Round-trip to Canada is nearly sixty days whereas round-trip to Australia is over one hundred and thirty days. British shipping is inadequate to meet the total of her necessities for existence, which makes shipping one of her major problems, and they believe that the solution lies in buying and chartering neutral shipping which is being done. Chartering is difficult owing to the reluctance of neutral owners and crews to incur the risks of approaching belligerent shores. British shipyards busy building merchant ships to the extent Admiralty can allow.

We have stressed the problem represented by new season's wheat situation in Australia and are pressing for decision as to what tonnage Britain will buy from us in 1940 and what tonnage they are likely to be able to ship from Australia before March 31st, 1940.

Have stressed that this is an acute financial problem for us as well as being a difficult shipping problem for them. Their shipping situation makes it impossible for them to look much more than three months ahead at the most. Hope to get some sort of reply by 27th November or 28th November.

Have also discussed fresh and canned fruit and am hoping for some answer early next week.

Is it possible that any partial solution of the wheat shipping problem lies in diverting some ships from the Australian coastal shipping trade to carrying wheat overseas?

CASEY

1 Document 379. This cablegram was drafted on and dated 22 November 1939.

2 Document 384.

[AA: CP 290/6, ITEM 35]