219 Department of External Affairs to Mr F. K. Officer, Charge d'Affaires in Japan

Cablegram 2 9 December 1940,

SECRET

At interview in Canberra December 4th the Consul-General of Japan [1] raised formally several questions affecting Australian- Japanese relations which his Government considered of first importance.

Consul-General first referred to refusal of Commonwealth Government to allow transfer to London of approximately 400,000 held here by Yokohama Specie Bank. He said that no reason which the Japanese Government could accept as valid had been advanced by the Commonwealth Government. The Japanese Government had been informed that decision was for technical reasons only, but he could not get any satisfactory explanation from Treasury as to why these reasons were decisive. The question had therefore now become one of principle which ought appropriately to be the concern of Commonwealth Government itself, because it was one which directly affected relations between the two countries.

Consul-General next raised question of request of Commonwealth Government to Japanese Government that proposed visit of Japanese commercial travellers to New Guinea and Papua be postponed. He said that this mission was proceeding to various territories in the South Seas, its preparations had already been made and he could not see why it should be refused permission to enter Australian territories.

Referring to embargo on scrap iron export, Consul-General emphasised that this came at an inopportune time, and in view of various declarations by Commonwealth Government that economic considerations formerly did not warrant imposition such embargo, Japanese Government concluded that it had been specifically directed against Japan as it followed so closely on similar embargoes imposed by Canada and United States. The Consul-General also referred to the fact that Japanese Government had not been able to obtain any assurance that wool exports to Japan would be allowed in future. He said that difficulties had also been experienced in regard to supply to Japan from Australia of lead and zinc concentrates.

In course of reply to Consul-General, it was emphasised that these restrictions, though they may have affected Japan, were in no way intended to be discriminatory and were not part of a deliberate policy, as he suggested, of assistance directly to China against Japan. Consul-General, however, stated that Japanese Government was beginning to feel distinctly annoyed at accumulation of these restrictions. Japanese Government did not like to think that restrictions were part of an Empire and United States policy designed to throttle Japan economically. If this was so, he emphasised with great earnestness, Japan would like to be informed and would 'accept the challenge.' [2]

1 Masatoshi Akiyama.

2 This cablegram was repeated to R. G. Casey, Minister to the United States, as no. 239 and to S. M. Bruce, High Commissioner in London, as no. 181.

[AA:A981, FAR EAST 20B, i]