317 Prime Minister's Department to Mr S.M. Bruce, High Commissioner in London

Cablegram unnumbered 31 October 1939,

Your telegram 24th October. [1] Wool for neutrals. As you know Japan wants 200,000 bales merino 100,000 cross-bred. If less cross-bred made available merino will be reduced proportionately.

Negotiations between Consul-General, Japan [2] and Chairman Central Wool Committee [3] proceeding satisfactorily.

Confidential. Consul-General agrees on behalf of his Government to stipulations regarding re-sale, of wool and manufactures therefrom. No other country has mentioned specific quantities but several have made enquiries. Consul-General, Belgium [4], on instructions from his Government asked on 7th September that Belgian wool buyers be authorised purchase greasy wool if possible without quota limitations. Understand Belgian Embassy made representations London towards end September and were informed no arrangements could yet be made. We have now arranged for Consul- General to discuss details direct with Chairman Central Wool Committee but we shall not indicate any definite quantity at present. See reference to Italy our telegram 11th October. [5] Nothing further has since been received from Italian Consul- General. [6] United States enquiries are from trade and not from Government sources. We expect their requirements to be large particularly during the next four months till their own clip available. Commercial enquiries also received regarding supplies from Norway and Sweden.

We suggest price be fixed the present season. Best course in the circumstances is to concentrate on the prices to neutrals. Wool Committee have considered this and Chairman recommends that prices be based on percentage additions to appraisement prices and that such addition should be 30 per cent inclusive. Committee also strongly recommends that allocation should be in block types and no country given right to appoint selectors to choose individual lots. Latter procedure would be unfair to United Kingdom. We are most anxious to clear up position regarding neutrals. Glad therefore you press strongly the above proposal regarding price.

Neutrals may then secure current requirements while negotiating annual quantities. Earliest indication now desired United Kingdom authorities regarding Japan's merino and cross-bred requirements.

Has United Kingdom any instructions regarding shipment to France?

1 Document 306.

2 Masatoshi Akiyama.

3 Alexander F. Bell.

4 F.F.A. Jansen.

5 Document 284.

6 Andedeo Mammalella.

[AA: A1608, L37/1/5]