429 A. W. Fadden, Acting Prime Minister, to Sir Frederick Stewart, Minister for External Affairs

Letter SYDNEY, 25 April 1941

NEW CALEDONIA-REPORT OF MILITARY MISSION-ASSISTANCE BY COMMONWEALTH GOVERNMENT

With reference to the discussion which took place at the meeting of the War Cabinet in Melbourne on 17th April, 1941, on the above subject, I am forwarding for your information, copy of Minute No.

(959) [1] which has been confirmed by me, recording the decision of the War Cabinet on the questions that were then discussed.

You will recollect that during the course of the discussion which took place at this meeting, the Commonwealth Government representative in New Caledonia (Mr. B. C. Ballard) was emphatic as to the necessity, in viewing the political situation in New Caledonia, of linking this with the economic life of the community, and that it was desirable that if the present political stability of the community in favour of the Free French Movement was to be maintained, the outstanding economic questions which are at present the subject of discussion between New Caledonia and Australia should be decided at the earliest possible date.

As you were at the meeting, you will be aware that the feeling of War Cabinet was that, in view of the relative importance of the preservation of the integrity of New Caledonia to the defence of the Commonwealth of Australia, it was desirable that in the adjustment of these outstanding economic questions, the Commonwealth should not adopt a bargaining attitude but should approach the problem in a generous spirit even if such would mean the final acceptance by the Commonwealth Government of some financial liability in connection with these problems.

I should be glad to have from you at an early date your views as to the attitude that should be adopted in regard to the several outstanding matters referred to in the War Cabinet Minute.

In view of the present international situation and the moral effect that the position in Greece and in the Mediterranean generally may have had in communities which have had confidence in an ultimate British victory, I am particularly concerned that the people of New Caledonia should have no cause to feel that the Commonwealth Government has broken faith with them.

Would you also please arrange for instructions to be issued to Mr.

Ballard to forward a quarterly report of any developments that may have taken place affecting the considerations outlined in the War Cabinet Minute No. (959), and for this to be presented to War Cabinet for its information. It would, of course, be expected that, should developments occur within a quarter which vitally affect the situation, Mr. Ballard will present a Special Report which you would forward for War Cabinet consideration.

A. FADDEN

1 See AA: A2673, vol. 6. The decisions taken at this meeting are summarised in Document 440. See also Document 425 and Defence Committee Minute 35/1941 of 9 April on file AA: A816, 19/311/110.

[AA: A981, NEW CALEDONIA 2A, ii]