109 Mr J. McEwen, Minister for External Affairs, to Mr R. G. Casey, Minister to the United States

Cablegram 30 21 March 1940,

My telegram No. 22. [1] Sale of wheat and flour to Japan. We have noted United States authorities admission that they are continuing to subsidise exports wheat and flour to China and other countries.

Japanese importers and Australian flour exporting interests have again approached Commonwealth Government with proposals for sales of flour to Japan on basis fifty per cent. cash fifty per cent.

credit. In view unemployment flour milling industry shortage of mill offals and continued anxiety regarding disposal stored wheat we have indicated to interested parties that we will favourably consider authorising credit deals, subject to later submission of details of proposed contracts. [2]

Above is for your information and use at discretion.

MINISTER EXTERNAL AFFAIRS

1 On file AA: A3300, 74. Dispatched on 6 March 1940, it requested an early reply to the unnumbered cablegram to Casey referred to in Document 59, note 3.

2 On 15 March 1940 Full Cabinet authorised the Wheat Board to sell flour to Japan on the basis of 50 per cent cash, 25 per cent in twelve months and 25 per cent in eighteen months. Negotiations were authorised for the sale of barley on similar terms. (See AA:

A2697, vol. 3B, 15 March 1940, Minutes 307 and 217.)

[AA: A981, TRADE 68, iii]