Press reports in Australia were celebratory when the executive agreement establishing the Australian-American Fulbright program was signed in November 1949, though some journalists noted that the inter-governmental negotiations had taken several rocky years.
Discussions had begun back in June 1946, with the Lend-lease Settlement, which established the amount owed by the Australians to the U.S. government for wartime materiel and services. This Settlement explicitly included the intention to ‘further educational and cultural relationships between the two countries by means of scholarships or otherwise in a manner mutually agreeable’, to be financed in Australian pounds owed to the U.S.
When the U.S. Congress passed Senator J. William Fulbright’s Amendment to the Surplus Property Act 1944, known colloquially as the ‘Fulbright Act’ and signed by President Truman on 1 August 1946, talks between Australia and the U.S. about educational exchange picked up pace. Read about how Senator Fulbright ushered his educational exchange bill through Congress in the immediate post-war period here.
Over several frustrating years, U.S. State Department and Australian External Affairs representatives haggled over the terms of the proposed agreement. International security concerns and disagreements between the Truman and Chifley administrations over foreign policy in this early Cold War period played their part in delaying a resolution.
Partway through the negotiation process, in January 1948, the U.S. Government passed the Smith-Mundt Act (officially the ‘United States Information and Educational Exchange Act’), which explicitly stated that ‘mutual understanding’ between people of the U.S. and people of other countries was its primary goal, to be achieved through a) information programs and b) educational and cultural exchange. The Act expanded educational exchange significantly because unlike the Fulbright program, it did not have to rely solely on Lend-Lease Settlement (foreign currency) debts for funding, but could seek Congressional dollar appropriations.
While the Fulbright Program retained its own separate administrative structures, there would be some significant areas of crossover between the two programs, as individual Fulbright and Smith-Mundt awards could be combined. Also, the Smith-Mundt Act covered the operations of the United States Information Agency, whose officers worked in U.S. embassies abroad and often sat on bi-national Fulbright commissions – as would be the case in Australia.
Australian-U.S. negotiations dragged on for almost two more years after the Smith-Mundt Act came into force. Particular clauses of the Fulbright agreement proved sticky and resulted in many drafts and re-drafts crossing the Pacific. The balance of nationalities on the Foundation board was one concern – the Australians fought hard for (near) parity – and taxation of scholarship income, the exchange rate applying to program funding, and whether ‘cultural’ (as opposed to purely educational) activities would be funded were others. Despite these obstacles, the Australian and U.S. governments did manage eventually to hammer out a robust executive agreement, urged along by the flood of mail coming in from Australian university students, schoolteachers and academics keen to benefit from an exchange experience. For more on this negotiation period, see this article by Alice Garner and Diane Kirkby in Australian Historical Studies.
The agreement signed on 26 November 1949 required the Australian government to set aside, for the purposes of educational exchange, the equivalent in Australian pounds of $ US 5 million, with no more than $US 500,000 to be spent in any one calendar year.