Extracts 28 July 1939
1. Following upon reports from various sources on the intensification of efforts by the Japanese to develop their fishing industry in waters adjacent to Australia, as well as requests from the Premier of Western Australia  for an indication of the policy of the Commonwealth Government in regard to poaching and protection of the local industry, the Commonwealth Government approved of an Inter-Departmental Committee to consider and report on what steps, if any, should be taken to check the activities of Japanese engaged in fishing for pearl and other shell in waters adjacent to the Commonwealth of Australia and its Territories.
This Committee, representative of the Department of External Affairs, the Attorney-General's Department, the Department of the Interior, the Department of Trade and Customs, the Department of Health, the Prime Minister's Department (Territories Branch), the Department of Defence, and the Department of Commerce, met at Canberra on 3rd and 4th July, 1939.
[Paragraphs 2 to 8 dealt with questions of domestic concern.]
9. There are also the political and international aspects of the matter. The Southward Expansion policy of the Japanese is well- known, and the necessity for the exercise of adequate control over the movement of the crews of Japanese fishing vessels in order to check operations which might assist in the prosecution of that policy is evident.
10. In the light of the foregoing considerations, it is abundantly clear that some action should be taken to establish a form of regulation and control over the pearling industry not only as regards Australian pearlers but also Japanese vessels engaged in fishing near the Australian coast. To this end, various suggestions which have been put forward from time to time have been considered by the Committee.
11. A certain degree of control over Japanese activities could be effected by independent action on the part of the Commonwealth.
This method, which would involve legislative and administrative measures intended to place serious restrictions upon activities within Australian territorial waters, would be unsatisfactory in that, while it would tend to provoke Japan, it would be largely ineffective because it could be applied only in territorial waters, it would be difficult to police adequately, it would not materially assist the Australian pearling industry and it could not operate to preserve the pearling beds which lie outside the three-mile limit.
12. An alternative method of securing control would be by agreement with the Japanese Government. Such an agreement, if secured, would obviate the possibility of international complications arising and would be more effective than the other method, in that it would, if carried out in good faith, protect both the Australian pearler and the beds. Provision could be made in such agreement to safeguard against the dangers previously referred to as regards customs, quarantine and immigration. With respect to this method, it is to be noted that an unofficial approach was recently made to the Commonwealth Government, at the instance of Japanese fishing interests, for the conclusion of an agreement providing for the limitation of the amount of shell to be taken. An approach to the Japanese Government, with a view to negotiating an agreement on the lines indicated, might, therefore, be expected to be favourably considered.
13. It is recommended, therefore, that steps should be taken to negotiate for an agreement between the Commonwealth of Australia (and its Territories) and Japan to secure such objects as the following:-
(i) The limitation of the amount of shell to be taken during the season by each party to the agreement.
(ii) Regulation of the grade and class of shell to be taken.
(iii) Provision for rotation of the pearling grounds.
(iv) Arrangements whereby each Government would introduce a system of licensing for its own vessels and nationals.
(v) Provision for Japanese vessels to report at an Australian port of entry for medical examination, immediately on arrival off the Australian coast and before contact is made with any part of the Australian coast or with any Australian vessel.
(vi) Provision for Japanese vessels to enter for wood, water or other supplies, or for the purpose of careening, only at places specified under the agreement.
The precise details of such an agreement would, of course, be the subject of negotiation, and it is assumed that before any approach were made to the Japanese Government with a view to negotiating an agreement the views of the pearling industry in Australia would be sought. However, notwithstanding any views which might be expressed by those consulted regarding the economic aspects of the problem, the Committee considers, for the reasons already given, that the national aspect is of such importance as to justify the opening of negotiations for an agreement.
[The final two paragraphs of the report contained proposals regarding patrolling and reconnaissance of the area, and the creation of a standing advisory committee to advise the Government on policy and to co-ordinate action.
The report was signed by Lt Col W.R. Hodgson (Secretary of Department of External Affairs and Chairman of the Committee), J.A. Carrodus (Department of the Interior), H.F. Morris (Department of Trade and Customs), J.G.B. Castieau (Attorney- General's Department), Lt Col M.J. Holmes (Department of Health), J. Brack (Prime Minister's Department, Territories Branch) and Major James A. Chapman (Department of Defence). The Department of Commerce was also represented at the inter-departmental meeting.
Subsequently, at the request of the Prime Minister, R.G. Menzies, the Minister for External Affairs, Sir Henry Gullett, embodied the points made in this report in a Cabinet submission (see Cabinet Agenda 146, 23 August 1939, on AA: A2697, vol. 2). See also Document 145.]