Today the Consul-General for Japan called on me and raised the following questions:-
1. He stated that he had received instructions from his Government asking whether the Commonwealth Government would have any objection to Japan looking after Italian interests in Australia.
I said that this question was rather obscure at the moment as we had only this morning received advice from the British Minister in Brazil  that Italy wished the Argentine to look after those interests. Mr. Akiyama however pointed out that the Italian Embassy in Tokyo had made the approach to the Japanese Government and there seemed to be little doubt that his country would be the one asked to do it.
After conferring with you I informed him that the Commonwealth Government would have no objection to Japan acting in this capacity.
2. Mr. Akiyama then raised the question of the 'new order in Eastern Asia' and asked when was Australia going to recognise that order. I said that this was a difficult question, as the full implications of it were not clearly understood. The first announcement about this new order was in 1934 when Japan warned other Powers not to interfere in Japanese policy in the Far East.
Various Prime Ministers and Ministers for Foreign Affairs and also Ministers for War had given different interpretations of what this new order meant.
Mr. Akiyama said that he specifically had in mind the new order as from March 20th following on the inauguration of the Wang Ching Wei Government in Nanking. I replied that as he was well aware the Commonwealth Government had adopted an attitude of strict impartiality in the dispute between Japan and China. We had not, nor did we intend to interfere in any way in this dispute. I reminded him that even he himself had admitted in the past that the attitude of this Government had always been most correct and appropriate in the circumstances.
Mr. Akiyama did not pursue the question further, beyond saying that it seemed to Japan that we were still following too closely the policy of the United Kingdom, and that we might take a more independent attitude.
The conversation then led up to- 3. Closer Anglo-Japanese understanding. Mr. Akiyama was emphatic that there was every reason why there should be close friendship between the British Empire and Japan, and especially between Australia and Japan, whose products were complementary. I gathered that he was uneasy about the decision of the United States to build two ocean fleets, and the appointment of Mr. Henry Stimson as Minister for War. He said that Mr. Stimson had proved himself a very bad friend to Japan, and the decision about the Navy was one which seemed to be largely aimed at Japan. Mr. Akiyama said that Japan had always regarded the abrogation of the Anglo-Japanese alliance at the Washington Conference as a big mistake and he saw no reason why a closer understanding between the Empire and Japan should not in time develop into another alliance. Anyhow, he said, Australia has made a very big step forward in the furtherance of more friendly relations in the decision to appoint a Minister.
4. Appointment of Australian Minister Mr. Akiyama expressed very grave concern at the premature announcement in the press and over the radio about the decision of the Commonwealth Government before the wishes of the Emperor or the Japanese Government had been ascertained. I told him that the decision was one which as he knew had been taken in principle some time ago. The announcement to which he referred was not official and it was due to one of those unfortunate things which from time to time got out to the press and the radio without the sanction of the Government. He promised to cable immediately his Government and point out that this premature announcement was not to be regarded as in any way discourteous to the Japanese Government as in the meantime action was in train for the proper and formal steps to be made to the Japanese Government.
5. Japanese-Australian trade Mr. Akiyama thought that it was bad for our respective countries at a time like this to curtail further Japanese importations into Australia. He particularly mentioned the possibility of terrible devastation and chaos in Europe and the fact that our exports to the United Kingdom might be seriously affected in the future. As he saw it, this would mean that if war could be kept out of the Pacific arena altogether, and there was no reason why the war should spread to the Pacific, Australia and Japan would have to depend more and more on each other's resources. He even went so far as to indicate that Japan might even be in the position to supply munitions of war, even aeroplanes, which Australia might want. In this respect he said he had submitted to Sir Frederick Stewart  a list of supplies which Japan might supply to Australia.
6. The question of communications between Australia and Japan was then raised. Mr. Akiyama said that they had noted with pleasure the first step towards improvement in communications by the decision to establish wireless-telephone service. There did not seem as yet to have been any advance in the Beam service. I reminded him that he had promised to submit to me a memorandum on this question along with a schedule of comparative charges prejudicial to Japan. He replied that he had been in communication with his Government on this question and he hoped shortly to submit proposals to the Japanese Government.
I told him that without awaiting his memorandum I had again discussed the matter with the Secretary of the Prime Minister's Department  and had understood from him that the Government were going to give further consideration to the Beam service and that I hoped the reply would be favourable.
Mr. Akiyama was gratified with the stage that had been reached and said that at the present time it was obvious that improved communications between the two countries would be a great mutual advantage.
W. R. H[ODGSON]