148 Commonwealth Government to Mr A. Eden, U.K. Secretary of State for Dominion Affairs

Cablegram 153 16 April 1940,

MOST SECRET IMMEDIATE

Your circular telegram D. 123 of 13th April. [1] We are gravely concerned at issue of orders to Chinese station to intercept ships destined directly or indirectly for Vladivostock, especially in light of my cable of 4th April [2] which expressed our considered view such action would be provocative and ineffective.

It would seem from reports issued by Ministry of Economic Warfare that major stream of traffic via trans-Siberian railway emanates from American sources, and action being taken would check minor stream only, as carried mainly by Japanese and Dutch vessels voyaging along southern routes.

Further, the proposal outlined in your circular telegram D. 124 [3] to negotiate an agreement with Japan to reduce export of vital war commodities to Russia and Germany is out of harmony with the decision now in question and seems likely to be nullified at outset.

From broadest aspect, it appears to my Government the war is entering on vital and critical stage, when it is incumbent on us not to precipitate matters either with Italy, Russia or Japan.

With the first two it can be assumed that a decision by them to participate will be quite outside Allied control, but with Japan the issue may well depend on our own conduct and actions.

Thus, apart from the disquieting effect on Australian position, we feel in general interests of Allied effort that the gain to be achieved by interception and diversion of ships in Far East is not commensurate with the risks involved. In this respect we are bound to say that the proposal for a negotiated agreement should in our opinion be first put into effect and then if those negotiations in fact fail, further consideration can be given to the more drastic action of direct interception.

For these reasons, we urge that the orders already given be immediately reviewed before untoward incidents can occur. [4]

1 Document 141.

2 Document 125.

3 Document 143.

4 The dispatch of this cablegram and of the cablegram printed as Document 151 was approved by Full Cabinet on 16 April 1940. (See AA: A2697, vol. 4 and External Affairs Dept ministerial submission of 16 April 1940 on file AA: A981, Trade 68, iii.)

[AA: A981, WAR 45, iv]