THIS DOCUMENT IS THE PROPERTY OF HIS MAJESTY'S GOVERNMENT IN NEW ZEALAND.
D.C.C.(SUPPLY) 3.
FINAL EDITION. copy no. 51
20th April, 1939.
DEFENCE CONFERENCE, 1939.
Ic is requested that special care may be taken to ensure
the secrecy of this document.
SECRET.
(FINAL EDITION).
NOTES OP PROCEEDINGS OP THE SECOND MEETING OP
THE COMMITTEE ON SUPPLY HELD ON TUESDAY,
18th APRIL, 1939.
Present;        Hon. D.G. Sullivan Chairman.
Mr. L.J. Schmitt
Mr. J.R. Middleton
Capt. W.D. McN. Graham
Commander J.C.D. Esdaile R.A.N.
Col. O.H. Mead, D.S.O.
Wing-Commander A. de T. Nevill, R.N.Z.A.F.
Commander A.B. Fanshawe, R.N.
Dr. A.R.F. Mackay
Mr. H.G. Nicholls, Secretary.
1. The Supply Committee resumed at 9.30 a.m. on the 18th
April, 1939.
2. WING-COMMANDER JONES attended the meeting and outlined
the position re articles of equipment manufactured in Australia,
either at the Munitions Supply Board establishments or by private
enterprise (see list attached).   He said that in regard to quantities
available in peace and war, assuming that ships were available to
send goods across; no assurance could be given.   He said it would
depend upon the orders placed by New Zealand and the building up of a
war potential in regard to supplies of equipment.   In reply to a
question asked by Dr. Mackay, Wing-Commander Jones said they had been
able to manufacture some lines a good deal cheaper, but taking the whole
range, the costs would be a little more, but that fact is overridden
when one considers the value of being able to work up a local supply-.
3. MR. SCHMITT asked what notice would be required when
supplies were ordered from Australia. Wing-Commander Jones said that all
I 2-
the articles divided themselves into two categories, those
which could "be supplied from Government sources and those which
would "be available from ordinary commercial sources, and the
question of supply would he a matter of arrangement "between the
Governments or "between the New Zealand Government and the private
firm concerned.
k. WING-COMMANDER NEVILL raised the question of Air Ministry
inspection.    Wing-Commander Jono's said that perhaps some arrange-
ment could he made whereby New Zealand requirements were ordered
with Australia's requirements and the inspection organisation in
Australia made use of.    It was well organised and could cope with
the work.
5. The question of standardising types of aircraft used.in
these waters was raised, and Mr. Schmitt said it seemed to be a
matter that the Defence Department should consider, because in
view of the fact that Britain was asking for machines to be made
in Australia, it might be possible that they would be so short of
machines that New Zealand would not be able to get supplies.
6. COMMANDER BSDAILE said that Australia was buying a large
number of aircraft from America to fill in a gap between now and
the period her own aircraft factories came into production.
7. COLONEL MEAD outlined the idea behind subsection (vi) Para.U
and in reply CAPTAIN GRAHAM said that maintenance in war might
become the responsibility of the United Kingdom^ provided a clear
indication v/ere given now as to the forces v/hich v/ould be available.
He said that it was impractical at this moment to despatch the
necessary equipment to Fiji or to establish the necessary
reserves in the Southern Pacific.
8. COLONEL MEAD said it was not so much the maintenance of the
forces as the initial equipping of the forces? but before any
logical conclusion could be reached on this matter it would be
necessary to know what forces v/ould be required and where.
Captain Graham agreed with this statement.
9. After considerable discussion it was agreed that this
matter should be referred to the Strategical Committee for their
suggestions or recommendations.
10.        Dealing with para, (vii) CAPTAIN GRAHAM said it was obviously
undesirable to purchase all requirements from the United States of
**merica because of the question of replacements in war time when that
source may be cut off, but against that there was the fact that
immediate requirements can be provided in certain directions from the
United States and it would be a pity to omit that possible source.
He added that absolute uniformity of equipment within the Empire might
prove impeacticable at the present moment and that anything that could
be done to relieve the pressure by buying through the United States
was a good thing.
lit MR. SCHMITT Guid it would be advisable to have on record a
list of equipment that would be available in the United Stutes,
12. .       CAPTAIN GRAHAM said that available organizations in the
United Kingdom could be used to get the most favourable terms from
the United States.
13. Dealing with para, (viii) MR. SCKMITT said the problem of
obtaining raw materials from neutral countries in time of war was
a very important one.
14. MR. SULLIVAN again emphasized the financial problem involved,
and suggested that attention should be given by Treasury to obtaining
data and information from all service departments in order to get a
complete picture of the whole financial problem.
15. MR. 8CHMITT said that Australia was raising internal loans
for defence purposes to t he extent of 70 million pounds and that as
a general rule New Zealand could base her requirements on a quarter
of Australia's figures.
16. -      After a lengthy discussion it was decided that the following
statement should be submitted to the full Conference:
4;
The New Zealand Members of the Committee
pointed out that a grave strain would be placed
on New Zealand's sterling funds if adequate reserves
of equipment and raw materials were to be procured
in the immediate future.
The New Zealand members further pointed out that
if any armament production capacity wore to be inaugurated
in New Zealand its creation must dopend upon the provision
of basic industries, such as an iron and stool industry.
New Zealand is totally lacking in supplies of certain
commodities for use in war.   These essential stocks,
details of which are a natter for further investigation,
should be built up in the near future.   In this connection
the New Zealand members of the Committee request the
Conference to take note of the sterling position and state
that without a solution of this basic problom it may be
difficult to solve the problem of the provision of raw
materials and equipment.
17. MR* MIDDLE TON dealt with the matter of the United Kingdom's
food problems in the event of war and stressed the necessity for
New Zealand being acquainted with the kind of" produce that would
"be required from here to enable organisation to proceed on the
correct lines.
18. The following further sub-committees were set up to deal
with matters arising in paras, (vi). (vii) and (viii) — reports to
"be prepared and submitted to full Supply Committee for presentation
later to full conference;-
Para, (vi)     Four Service representatives and
Captain Graham.
(vii)    Four Service representatives and
Captain Graham.
(viii) Messrs. Schmitt and Middleton. Captain
Graham. Commander Esdaile, Commander
Fanshawe.
19- The matter of having a statement as to the scale of
reserves before subsection (2)(a) could "be dealt with was raised?
and Captain Graham agreed to prepare this.
20. Mr. Schmitt asked whether Paper D.C.6 should not "be dealt
with "by this Committee — The Economic Aspect of War, including
probable effect on trade and shipping.   Committee agreed that this
matter v/ould be included irt any discussion on paragraph (viii) D.C.I*
21. The Committee adjourned at 12.h5 p.m. to resume at 2.30 p.m
on Wednesday, 19th April, 1939
APPENDIX TO D.C.C.   (SUPPLY) 5.
ROYAL AUSTRALIAN AIR FORCE.
ARTICLES OP EQUIPMENT BEING MANUFACTURED OR PROPOSED
TO BE MANUFACTURED.
BOMBS: 250 G.P:
250 S.A.P. can be filled with straight trotol.
We expect they will be filled with T.N.T./B in
six months1 time,.
A.S. Bombs — investigations being made.
Annex will be set up by General Motors in six to
twelve months - filling by M.S.B.
No fuses can be made locally at present*
Detonators - all old types have been made.
Manufacture of new types being investigated.
S.A.A.        All types can be made including ball, A.P.
and tracer*.     Incendiary being investigated.
Prideau links being made*
PYROTECHNICS:
Only limited ranges such as sig. cartridges.
Wing-tip flares being made*
Recon. flares, smoke floats, and rockets being
investigated.-   Unlikely to be available under
twelve months*
All practice bombs made locally-
Stannic chloride available from I.C.I.
Tetranium chloride imported*
TIGER MOTH AIRCRAFT:
De Havillands making these less engines*
Probable output 30 per year-' Engines being
made by com. Aircraft Corp-
AIR SCREWS: All wooden screws made locally. Prospects
of Hamilton V.Pi bein^ progressively made
by D,H.'s.
TYRES AMD TUBES:    Made locally,
PARACHUTES: Made locally.     Contract let for 520,
Type is a cross between Irvin and Q.T.types,
W/T COMPONENTS:     Wireless manufacturing in Australia highly
developed*   At leas-; two firms in Sydney able
to carry out any type of wireless construc-
tion-   In addition there are a number of
firms capable of manufacturing components and
specialise! equipment.*
These firms generally maintain qualified
design staffs capable of dealing with all
phases of work undertaken and in addition they
have overseas affiliations which keep them in
touch with latest development abroad*
The P.M.G.'s Department maintains Research
Laboratory capable of investigating problems
as they arise*
Manufacture of transmitters and receivers of
all powers for ground stn« and 3hips is well
established and c:: economical ba3is* Practi-
cally the whole of the aircraft equipment used
in civil aircraft in Australia is made here
and is of high standard*
Manufacture of service aircraft equipment to
local design to meet i-^.vvice requirements
being ir.;'C3Cigated«   Ho technical obstacles
but cost of few ii-enjo prohibitive*.
TcoiTFdl
Transmitting valves generally are not made
in Australia,   Only types made are American
types in common use in Broadcast receivers •
these have been successfully used in
locally made D.F. receivers and receivers
used in civil aircraft*
Plastic moulding industry highly developed.
Batteries can be made -- provision of
special types matter of cost,
Porcelain industry well established.
/ICKERS GUNS MARK V:    300 already made
MACHINE TOOLS:
Certain lathes made locally*
A.G.S. PARTS:
Parts and streamline wires procurable
locally*     All parts can bemade but some
not economicallye
M.T.
All special bodies made including gun
mounting for heavy tender.
BELLMAN HANGARS:
Made locally, price 53.000.
PLYING CLOTHING:
All the more important items now made
locallyi
AIRCRAFT INSTRUMENTS: Firms now investigating manufacture of
Kollsman instruments - common flying
instruments, but not gyro instruments.
SPARK PLUGS:
Some made locally for aero engines,
PHOTOGRAPHIC
Film and material but not cameras made,
UNIFORMS:
All kinds of clothing and uniforms including
material made locally.