186 Full Cabinet Submission by Mr E. J. Harrison, Minister for Trade and Customs

Agendum 483 1 November 1940

AUSTRALIA'S COMMERCIAL RELATIONS WITH JAPAN

In view of the rapid deterioration in the relations between the British Commonwealth and Japan, a comprehensive review of the principal outstanding problems in connection with Australian- Japanese commercial relations has become a matter of urgency.

The following statement refers briefly to the trend of trade between Australia and Japan since the outbreak of war and sets out as concisely as possible the major questions which require attention.

Total Trade with Japan The following table shows the trade position between Japan and Australia over the past five years, taken from the official Australian statistics:-

Year Imports from Exports to Balance Japan Japan A A 1935/36 6,200,000 17,700,000 + 11,500,000 1936/37 5,000,000 9,700,000 + 4,700,000 1937/38 6,700,000 5,900,000 -800,000 1938/39 5,100,000 4,900,000 -200,000 1939/40 (preliminary) 7,200,000 6,200,000 -1,000,000 1940/41 (two months) 1,400,000 770,000 -630,000 For the past three years Australia has had an adverse balance of trade with Japan. The increase in the value of the trade in 1939/40 is due to the upward movement in prices, rather than to any growth in the physical volume of the goods exchanged.

Australian Exports to Japan Principal exports to Japan in 1938/39 and 1939/40 are given hereunder:-

1938/39 1939/40 A A Wool 3,804,000 3,927,000 Wheat 62,000 995,000 Zinc 229,000 28,400 Zinc Concentrates 14,890 152,900 Iron Ore 51,000 Nil Iron and Steel Scrap 283,000 300,000 Pig Lead 7,000 161,000 Hides and Skins 148,000 118,000 Casein 2,000 36,000 Wool. The release of wool to Japan is primarily a matter for the British Government, although the detailed arrangements are made through the Central Wool Committee in Australia. British policy has been to release limited quantities of wool to Japan on a monthly basis.

Wheat. The sharp increase in exports of wheat to Japan since the outbreak of war has been largely due to bulk sales on a credit basis. In view of the strong representations made by the British Government against the extension of credit to Japan it is understood that no further sales on this basis are contemplated.

Zinc. While there is at present no surplus of zinc spelter available for export to Japan considerable quantities of zinc concentrates from Mount Isa have been shipped to Japan since the outbreak of war. The British Government has not, until advices dated 19/10/40, opposed the export of the concentrates to Japan provided the quantities were normal and the supplies were released on a piece-meal basis. The Japanese contracts with Mount Isa provide for shipment at the rate of 2,000 tons per month but a request has now been made by the Mitsubishi Co. for the grant of an export permit for 8,800 tons in one shipment and the Company has a ship en route from Japan to Townsville specially for the purpose.

Iron Ore. The disappearance of this item from the trade in 1939/40 is due to the general embargo on the export of iron ore.

Iron and Steel Scrap. Although there has been considerable public opposition to the continued export of scrap iron and steel to Japan, the policy of the Government has been to allow the shipments to continue on the grounds that, while there was a surplus available in Australia, there was no justification for refusing to ship scrap to Japan.

A recent investigation has revealed that there is still an ample supply of scrap available for export but it is necessary to review the whole question in the light of the present situation (particularly since both the United States and India have taken action to cut off supplies of scrap iron and steel to Japan) and the cabled advices from United Kingdom Government.

Pig Lead. The present control of lead exports has been instituted solely for price control purposes. Ample supplies are available to meet the demand of the home market as well as to fill contracts with the British Government and producers have been granted licences freely for the export of their surplus production. The Australian lead producers have agreed not to enter into further contracts to supply Japan for the time being.

Hides and Skins. The control of exports of hides and skins is also designed for price control purposes and ample supplies are available for export. Export prices, which rose sharply after the outbreak of war, have since slumped and are now below the controlled domestic prices.

Casein. The increase in exports of casein to Japan appears to be due to the difficulties experienced by the Japanese in obtaining supplies from Argentina. It has since been reported that a new barter arrangement between Japan and Argentina will enable Japan to obtain the bulk of her casein requirements from Argentina at lower prices than those prevailing for Australian and New Zealand casein.

Australian Imports from Japan The principal Japanese goods imported into Australia are textiles, yams, raw silk, apparel, crockery and fancy goods and toys.

Increases in value were recorded in practically all these items in 1939/40 as compared with the pre-war year 1938/39.

It is difficult to assess the effect of the import licensing restrictions on Japanese trade. Imports from Japan of goods of a kind which are now excluded (either by total or partial prohibitions) amounted to some A900,000 in 1938/39. On the other hand, the cutting off of European sources of supply has diverted trade to Japan and, in addition, Japan has received substantial orders for cotton cloth and canvas for defence purposes outside the normal quotas.

Furthermore, Japan has always received sympathetic treatment in the application of the restrictions. Imports of cotton and artificial silk piece goods have been allowed to continue without any cut on 1938/39 values and in many other instances restrictions, desirable on other grounds, have been withheld because Japan was the principal or an important supplier.

In view of the course which events have taken in recent weeks it is worth noting that an interruption of supplies from Japan would not have any very serious effects on the Australian economy. Some temporary dislocation would be caused by the cutting off of supplies of Japanese textiles. Calico for bag-making and the materials required for the fighting services would be the most serious problems but it is considered that all essential requirements could be met from Britain and India. Raw silk cannot be regarded as indispensable under present circumstances (except perhaps such quantities as may be required for parachute manufacture) and crockery could be obtained from Britain, although at higher prices. Japan was formerly an important supplier of sulphur to Australia but no imports have been recorded during the past two years. Supplies of sulphur can be obtained from U.S.A.

Japan has a virtual monopoly of the trade in camphor. The position of Australian stocks is not definitely known-but it is not thought that the interruption of supplies would be a particularly serious matter.

Method of Financing Trade with Japan The United Kingdom Government has for some months past been engaged in negotiations with the Japanese Government for the purpose of arranging a comprehensive payments agreement to cover financial transactions between Japan and the sterling area.

Briefly, the proposed agreement would take the form of a special account arrangement between the Bank of England and the Bank of Japan and would provide that all the sterling derived by Japan from her exports to the sterling area should be earmarked for Japanese purchases from the sterling area. As the balance of trade between Japan and the sterling area would normally be favourable to Japan, provision was made in the draft agreement for the settlement of the balance very largely by payment in gold.

Advice has now been received from the British Government (Cable of 8/10/40) [1] that Japan has made no reply to the draft proposals submitted more than a month ago and, in view of what has happened since the proposals were made, the British Government no longer feels disposed to maintain the offer to settle outstanding balances in gold. The British Government is therefore considering informing the Japanese Government that, unless within a relatively brief period (say a fortnight) it is prepared to accept an arrangement by which sterling placed at the disposal of Japan can be used only for payments within the sterling area, the authorities in the sterling area will feel obliged to impose unilateral restrictions on sterling payments to Japan. To be effective it would be necessary for the proposed restrictions to be imposed throughout the sterling area and, before reaching a final decision, the United Kingdom Government has asked whether the Commonwealth Government would be prepared to co-operate in the proposed measures.

A cable has been sent to the United Kingdom Government [2] intimating the willingness of the Commonwealth Government to co- operate with the British authorities along the lines suggested, but proposing that, if it becomes necessary to impose unilateral measures, a special account in Australian currency be set up in Australia through which would be passed current direct transactions between Japan and Australia.

A question which needs considering here is that, if the present trend in trade between Australia and Japan continues, Japan would accumulate a surplus of blocked Australian pounds in the special account and the Japanese Government might use the existence of these blocked balances to press for the release of strategic materials which we might not wish to allow to be exported to Japan. One way of preventing the accumulation of such balances would be to tighten up the present import restrictions on Japanese goods until the trade and other payments reach an approximate balance.

A second question relating to the financing of commercial transactions with Japan was raised by the United Kingdom Government in a cable dated October 13 [3]. The Japanese have for some months past been seeking to insist on cash payment for exports to the sterling area while still expecting to import on credit. As, if this policy were successful, the Japanese would be able to minimise their losses in the event of an interruption of trade, the United Kingdom Government suggested that the Japanese should now be required to pay cash before shipment of exports from the sterling area to Japan, at least if they demand this for their exports.

A reply has been sent to the United Kingdom Government [4] pointing out that wool is already paid for in sterling on shipment and that future sales of wheat, flour and barley will also be for cash on shipment. Japanese concerns seeking to obtain credit for other exports have been informed that, as Japan has shortened her selling terms, we must ask for payment on a sight basis for our exports. The Commonwealth Bank is keeping a close watch on the position and will, if necessary, stiffen the present attitude through monetary and export control. The United Kingdom Government has been asked whether these steps fully meet its views or whether there are any further specific measures it desires to be taken.

A third question has been raised by various proposals for 'barter' deals put forward by a number of Japanese firms (but principally the Mitsubishi Co.). While superficially attractive, these proposed barter transactions are objectionable on a number of grounds. In the first instance, if for example the Mitsubishi Co.

were granted additional import licences because they offered to make compensating purchases of Australian goods, similar benefits would have to be extended to other firms conducting an export business, with the result that a serious breach would be opened in the present import restriction scheme. It is claimed on behalf of such barter deals that they make possible additional export trade which would not otherwise be possible but, as other countries which have experimented with private barter deals have found, it is usually not possible to determine in practice whether the exports made under barter really represent additional trade or not.

A further objection to allowing private barter transactions is that they would cut across the clearing system which the United Kingdom Government is proposing to set up. If this clearing system is established there would be nothing to be gained by such barter deals since Japan would in any case be forced to apply the sterling she obtained for exports to purchases from the sterling area. The Commonwealth Government has not up to the present encouraged traders to engage in barter transactions.

Shipping. A further outstanding problem affecting commercial relations between Australia and Japan is the question of ships' warrants. Ships' warrants are issued to masters of vessels whose owners or time charterers have given undertakings to comply with the ship navicert system established by the British Government for purposes of contraband control and enemy exports control. The warrants entitle the holders to access to available commercial shipping facilities such as oil, coal, ships' stores, water, and repair and docking facilities. When the scheme is in full operation these facilities will be withheld entirely from vessels which are unable to produce ships' warrants. The proposal is, however, to give effect to the scheme gradually and the United Kingdom Government has proposed as an interim measure that Japanese ships not producing ships' warrants should be subjected to a routine delay of 24 hours beyond the time when they would have otherwise been able to sail. The delay is to be attributed to administrative reasons.

This interim procedure has not yet been adopted by the Commonwealth Government and as an early decision is desirable a separate minute on this question has been prepared for the consideration of Cabinet. [5]

Proposal of United Kingdom Government for Empire-wide adoption of economic action against Japan in collaboration with the United States and Netherlands East Indies Two cables, dated October 19 and 206, have been received from the United Kingdom Government putting forward proposals for concerted economic action against Japan by all British and Allied countries, in collaboration if possible with the United States.

The objects of the proposed action would be:-

(1) to prevent Japan from accumulating stocks of strategic raw materials;

(2) to weaken Japan and make her feel the effect of ranging herself against the democracies without compelling her into any violent reactions.

The first of these aims is of vital importance, since one of the most effective means of keeping Japan out of the war is to stop her from building up stocks of strategic materials which would enable her to withstand a blockade for a considerable period.

Experience in the case of Italy suggests that to permit any such stocking up would simply facilitate the entry of Japan into the war.

The United Kingdom Government states that it has considerable evidence that the Japanese Government is buying on a large scale for immediate shipment and the efforts being made by the Mitsubishi Co. to obtain immediate release of an unusually large shipment of zinc concentrates from Australia fit in with this picture.

The steps proposed by the United Kingdom Government to check these obvious attempts at stocking up are:-

1. To ensure that each unit of the Empire has adequate machinery to control the export of all essential materials to Japan. (In Australia, the Customs (Overseas Exchange) Regulations, although designed for monetary purposes, could be used to regulate the export of all classes of goods to Japan or any other destination.

Furthermore, special export control measures have already been applied to a number of important commodities).

2. To secure agreement that all parts of the Empire will henceforward treat Japan as a 'dangerous destination' for export licensing purposes. If this were agreed in principle a list could then be drawn up of essential goods which are urgently needed by Japan or the Axis powers and which it is therefore specially important to control.

3. To adopt as an immediate policy, as soon as the necessary machinery is available, the limitation by means of export licensing of the volume of essential exports from the Empire to Japan to the level of normal trade except where stricter embargoes are already in force. Similar limitations would be imposed on exports to China and Manchuria to avoid the danger of trans- shipment.

4. To introduce gradually stricter limitations on any commodities of strategic importance in so far as they can be controlled.

Commodities specifically mentioned as examples are jute, wool, manganese, lead, zinc, pig iron, ilmenite, bauxite and phosphates.

Australia is not a supplier of jute, bauxite or phosphates and over recent years there have been no exports of manganese to Japan. A table is attached [7] showing exports from Australia to Japan of all the other listed commodities (and also of scrap iron, tallow and hides and skins) during the five years immediately preceding the war and also during 1939/40.

tightening up on exports to Japan, to bring down further complete prohibitions in cases where such action can be justified on supply grounds.

The United Kingdom Government expresses its readiness to adopt this interim programme in relation both to the United Kingdom and the Colonial Empire immediately and expresses the hope that the Dominions Governments will agree to take corresponding action. The United Kingdom Government feels that it would be a particular advantage in seeking the co-operation of the United States Government, if it was able to intimate that all the Governments of the British Commonwealth had agreed on a joint interim policy along the lines suggested.

In the meantime, Lord Lothian [8] has been instructed to open preliminary discussions with the American authorities immediately.

Important points from the instructions sent to Lord Lothian are:-

1. The policy of restricting supplies of strategic materials to Japan could only be reasonably effective if a similar system is adopted by the United States and if the Netherlands East Indies Government can be induced to come into line. It would be unwise for the British Empire and impossible for the Netherlands East Indies to appear to be taking the lead in imposing restrictions.

2. The United States Government is to be strongly urged to extend the present list of licensed exports to cover all essential materials (at least all minerals and fertilisers) and to limit exports of these to Japan, China and Manchuria to normal levels, except where more stringent limitations are already in force.

Exceptions could be made for exports to Free China as required.

3. The United States Government is to be invited to participate in discussions in London between the United Kingdom Government, the Dominions Governments and the Dutch Government in order that the restrictions scheme might be extended and tightened up by agreement between the Governments concerned as was found advisable. Matters to be raised at the proposed London Conference, which would be secret, would include the question of exports from the Philippines and South and Central America and also the question of future policy with regard to the restriction of imports from Japan.

Further cables have been received from the United Kingdom Government on scrap iron [9] and phosphates [10] and ship warrants. [11] In addition, the United Kingdom Government have advised Whiskard [12] that the Governments of South Africa and New Zealand have intimated that they are pleased to co-operate in the Empire-wide policy suggested for adoption with respect to Japan.

Scrap Iron. The United Kingdom Government feel that now that the United States Government have imposed an embargo on export of scrap iron, Empire policy on this question should be reviewed.

Empire exports are relatively insignificant compared with United States exports but it can be expected that the Japanese will seek to divert orders formerly met in the U.S.A. to other sources.

Accordingly, Lord Lothian considers it to be most important that he should be in a position to assure the United States Government that parallel action is being taken by the Empire Governments.

The United Kingdom Government further advise that it has been arranged that the Governments of India and the Eastern Colonies will refuse to export scrap to Japan.

The British Charge d'Affaires in Washington [13] has been advised of the steps taken by the United Kingdom Government and has been asked to ascertain the intention of the United States Government with regard to pig iron. The United Kingdom Government hold that it would be logical to impose similar restrictions on pig iron, which could be justified on the same grounds as the restrictions on scrap.

If the Commonwealth Government agree with the proposal of the United Kingdom Government with regard to scrap, the United Kingdom Government make the further proposal that any exports of scrap to the Netherlands East Indies should be permitted only if covered by adequate guarantees against re-export. The United Kingdom Government understand that this would be in accordance with the wishes of the Netherlands East Indies authorities themselves.

Exports of scrap iron and steel to Japan by the following countries are as follows:-

U.S.A. 3,570,000 tons valued at $56,000,000.

Practically all the United States exports go to Japan.

Canada-49,000 tons South Africa-1,600 tons New Zealand-Nil Australia-71,756 tons out of a total exportation of 73,000 tons.

Phosphates. The cable on phosphates points out that fertilisers are one of the most essential goods to [the] Japanese economy and that there is evidence that Japan is trying to increase her supplies of phosphates. The present stocks are considered to be small. Japan is asking for 162,000 high grade tons above existing contracts from British controlled sources in the Pacific. It is understood that Japan is increasing her takings of low grade from Florida by approximately the same quantity and that she is also trying to resume trade with Morocco.

United Kingdom Government have approached the United States Government with the proposal that the United States Government should restrict current exports from Florida to normal exports.

The United Kingdom Government are prepared- (a) to veto the additional 162,000 tons from the Pacific Islands this year;

(b) to restrict exports from these Islands including Makatea next year to 350,000 tons;

(c) to ensure that exports from Straits Settlements are limited to normal quantities.

Japan is seeking in Vichy control of Makatea production from which she hopes to obtain 300,000 tons but at present the Island is loyal to De Gaulle [14] and production is in the hands of Anglo- French phosphates company which is working in co-operation with the United Kingdom Government.

United Kingdom Government trust that if the United States Government will agree to limitation of exports from Florida, as suggested, the Commonwealth Government will be prepared to do their part to agree to the stoppage of additional quantities which the Japanese are seeking to obtain from the British Phosphate Commission.

Practically all the phosphates obtained by Japan from the British Phosphate Commission are shipped from Ocean Island which is under the administration of the British Commissioner for Western Pacific. If Cabinet agrees, all we will have to do is to notify the Australian representative on the Commission and the administration of the restriction would be a matter for the British Commissioner for the Western Pacific. In case an attempt is made to obtain additional quantities from Nauru Island, the Australian representative would need to be advised that for the time being only normal quantities of phosphates are to be supplied to Japan.

Ship Warrants. The cablegram of 30th October from the United Kingdom Government evidently assumes that Commonwealth Government have adopted the ship warrant scheme. They ask for certain detailed information about the delays applied, complaints received and the number of ships which have visited our ports since the practice of routine delay was introduced.

Comment and recommendations It is obvious in the light of the pact made between Germany, Italy and Japan and the Japanese Foreign Minister's [15] statement to the effect that if Germany suffers a reverse Japan would at once have to consider what aid she could render to Germany, that the Empire in its own vital interests will have to make the greatest possible use of its economic powers short of provoking Japan to war. The disabilities inflicted on the industries affected must be a secondary consideration. Probably some of them may be capable of internal adjustment by arrangement.

The mistake of allowing Italy to accumulate stocks of essential war materials should not be repeated in the case of Japan. Japan's position since the announcement of the pact is more clearly defined than was the position of Italy before her entry into the war.

In the choosing of her friends, if economic considerations had counted for anything, Japan could only have chosen the Empire and the United States. In making the choice in favour of the Axis Powers, Japan must have realised that she was running the risk of doing considerable harm to her economic structure. The most intensive form of exchange control has been exercised by Japan and it has been applied to a most extraordinary degree to the imported raw materials for her principal industries, including textiles.

Quite a considerable quantity of long-outstanding orders placed by Australia for cottons and artificial silk piece goods could not be supplied by Japan until after the commencement of the new financial year in July last because exchange was not available for the purchase of the raw cotton and pulp. The same difficulties were experienced in the purchase of zinc concentrates from Australia.

Suddenly we are confronted with a position where frantic endeavours are made by Japan to accumulate stocks of some raw materials. In the case of zinc concentrates, a large boat is despatched to obtain them without waiting for Commonwealth Government's decision as to whether a special export licence will be granted. The rigorous exchange control policy is suddenly relaxed in relation to the raw materials which Japan requires for war purposes.

Probably one of two reasons exist for this action- (a) Japan's decision in principle to enter the war has already been taken.

(b) Japan fears economic reprisals on the part of the British Empire and the United States.

Viewed from an economic standpoint the weight of evidence favours (a). It is of the utmost importance that the other Dominions should be a party to the policy. The United Kingdom Government in their instructions to Lord Lothian emphasise the point that it would be unwise for the British Empire to appear to be taking the lead in imposing export restrictions on goods required by Japan.

It would be almost useless for Australia to impose these restrictions if Japan could divert her purchases to other Empire countries or to the United States.

It is recommended that the United Kingdom Government be informed- (1) That the Commonwealth Government agrees with the interim measures proposed to be put into force throughout the Empire in order to prevent Japan from accumulating stocks of strategic raw materials.

(2) That the Commonwealth Government's agreement is based on the assumption that from an Empire point of view there will be no serious gaps in the application of the measures proposed by any other Dominion or Colony.

(3) That the Commonwealth Government is prepared to collaborate with the United Kingdom, Dominions, Allied Governments and the United States in the development of a future economic policy towards Japan.

(4) That the Commonwealth Government considers that if the interim measures proposed to be applied are to be successful, it is of the utmost importance that the United States Government should at once adopt identical measures but that the Commonwealth Government does not make this a condition to their agreement set out in (1) above.

(5) That the Commonwealth Government has the necessary export control machinery in operation and is prepared to put into force the interim measures immediately the United Kingdom Government advises that there are no serious gaps in the application of these measures from an Empire point of view.

(6) That generally speaking, the basis of the restrictions to be applied under the interim measures will be the five year average export trade to Japan ending 30th June, 1939. Where, however, existing embargoes, restrictions or special arrangements exist which provide for a lesser quantity being supplied to Japan than the five year average, then the existing position will be adhered to.

(7) That the Commonwealth Government will endeavour to influence producers not to make contracts for supply of the specified raw materials to Japan without prior consultation with Commonwealth Government.

(8) That the export control will be applied to Manchuria and China in order to prevent leakage to Japan.

Some complexities in the administration of these measures will arise and it will be essential for the Departments concerned to work to the plan if Cabinet agrees. The Department of Supply may have to recast its policy with respect to the issue of Supply Certificates for goods required by Japan. It could only be an embarrassment to the Government if that Department issues a Supply Certificate to Japanese exporters [sic] and subsequently the Department of Trade and Customs has to refuse an export licence.

The procedure would need to be reversed i.e. Supply Department should only issue a Certificate if the supply position justifies this action and [if) that Department has been advised by the Customs Department that the quantity of the goods proposed to be exported to Japan is within the limits of the export quotas laid down for supply to Japan through the firm making application.

A draft letter to the United Kingdom High Commissioner is submitted for approval. [16]

Other matters relate to the following:-

Scrap Iron and Steel. It is recommended that action be taken to comply with the request of the United Kingdom Government and that a prohibition on the export of scrap iron be imposed. The prohibition would be a general one and shipment would only be allowed by consent of Minister. In the administration of this export embargo the position of the Netherlands East Indies is to be closely watched to prevent export to that country for subsequent shipment to Japan.

Phosphates. Commonwealth Government agree to the proposals made by United Kingdom Government.

Zinc Concentrates. Japanese are endeavouring to obtain 8,800 tons of Mount Isa zinc concentrates comprising 3,800 tons delayed shipments to Japan; 2,000 tons November shipment and the balance (3,000 tons) out of future allocations. Licence has been issued for 5,800 tons comprising the delayed and November shipments.

Ilmenite. This mineral is being taken from the North Coast beaches of New South Wales and is used mainly for manufacture of armament steels. Japan did not buy from Australia prior to the war.

Japanese houses are endeavouting to purchase 100 tons but the Australian controlled company is selling only to London. An American company is selling to the United States and a third company is not operating at the moment. It is recommended that no export licences be issued for this product for export to Japan.

Ship Warrants. It is urgently necessary that Cabinet consider the minute already prepared on this subject.

Barter arrangements. That for the time being no encouragement be given to any proposals submitted by Japanese firms.

Import licensing policy with respect to Japan. That this subject be dealt with separately. [17]

ERIC J. HARRISON

[AA:A2697, VOL. 5]

1 Cablegram 389 on file AA:A1608, G59/1/3, i.

2 Cablegram 543 of 16 October on file cited in note 1.

3 Cablegram 394 on file cited in note 1.

4 Cablegram 544 of 17 October on file cited in note 1.

5 Full Cabinet discussed the ship warrant question on 5 and 6 November (see AA:A2697, vol. 5) and the Commonwealth Govt's views were set out in the cablegram printed as Document 199.

6 The cablegrams here summarised, Z311 and Z312, are on file cited in note 1.

7 Not printed. See AA:A2697, vol 5, Agendum 483.

8 U.K. Ambassador to the United States.

9 Cablegram 348 of 23 October on file cited in note 1.

10 Cablegram 349 of 23 October on file cited in note 1.

11 Cablegram D545 of 30 October (AA:A3195, 1940, 1.9826).

12 U.K. High Commissioner in Australia.

13 N.M. Butler.

14 Leader of the Free French movement.

15 Yosuke Matsuoka.

16 Draft not printed. See AA:A2697, vol. 5, Agendum 483. The revised letter is printed as Document 204.

17 This Agendum was considered by Full Cabinet on 5 November when 'agreement was expressed with the interim measures proposed to be put into force throughout the Empire in order to prevent Japan from accumulating stocks of strategic raw materials, and it was decided steps would be taken to impose an export prohibition, subject to licence, on scrap iron and steel'. See AA:A2673, vol.

4, Minute FC27.

[5.] The United Kingdom Government also proposes, as part of the