310 Lord Cranborne, U.K. Secretary of State for Dominion Affairs, to Commonwealth Government

Cablegram 110 LONDON, 20 February 1941, 9.40 p.m.

IMMEDIATE SECRET

Your telegrams 62 of 30th January [1] and 100 of 17th February

consider that it is essential that we should attempt to secure the co-operation of Japanese shipowners in the Ship Warrant Scheme;

only alternatives appear to be either to exclude Japanese shipping from access to British facilities altogether or to place Japanese shipping in a privileged category, thus endangering the success of the whole scheme. This success has been considerable and about three quarters of the world's ocean-going tonnage are now warrant holders, or if enemy ships are excluded, four-fifths. The analogous political position of Spain has not prevented adherence to the scheme of most of the more important shipping companies, including certain companies which are in a considerable degree under the control of the Spanish Government. H.M. Government in the United Kingdom would view with alarm any suggestion of a change of policy likely to jeopardize the system which has become such an important part of our shipping and economic warfare policies.

2. The Japanese Consul-General's [3] protest reported in your telegram 62 proceeds upon complete misconception of the nature of the ship warrant scheme. The questions of international law are irrelevant to the discussion of the scheme which is in essence a commercial bargain. For supply and other reasons arising out of the war, it has become necessary to set a price on the services which are offered in British Commonwealth ports to neutral ships.

Unrestricted access to these facilities is therefore confined to those neutral shipowners who gave some return by rendering assistance to us by provision of tonnage and/or anticipating our blockade regulations (inviting statements by Ministers of Economic Warfare and Shipping quoted in my telegram Circular D. 379 of July 29th [4]).

3. We have hitherto refrained from asking the Japanese for assistance by the provision of tonnage and confined ourselves to asking them for undertakings to observe our blockade regulations.

The argument set out in paragraph 2 of your telegram under reference is, in our view, quite untenable since the scheme is world wide in scope and depends for its efficacy on the ability to exert pressure in one area on vessels engaged in other areas, for example, the Pacific, where our Navy is inadequate. In countering the Japanese contention, we feel that an explanation of this...[5] scheme in paragraph 2 would dispose of this argument.

4. With reference to the last paragraph of your telegram 62, there is no foundation in fact for the allegation of the Japanese Consul-General. No Japanese vessel has yet obtained a ship warrant, nor has any Japanese ship been detained for any period.

On the contrary, although the Japanese ships have been subjected to a nominal delay of 24 hours, ostensibly for reference of applications for facilities to London, facilities have never been withheld from Japanese ships.

5. H.M. Ambassador in Tokyo [6] has been requested to keep his Australian colleague in future informed of the course of negotiations with the Japanese shipowners. As a result of securing the co-operation of the United States insurance market, there are some indications of a more tractable-attitude on the part of some Japanese shipping companies.

6. With reference to your telegram 100 of 17th, we realise that the procedure suggested in my telegram Circular D.74 [7] may prove embarrassing to the Commonwealth Government. The decision to impose full delays on Japanese ships was taken in view of the deterioration of the situation in the Far East.

However, in order to meet the difficulties arising out of the fact that Japanese vessels make several calls in Australia, it is suggested that the authorities in Australia should request the Master to state, at the first port of call in Australia, what facilities, including fuel, he will require at all Australian ports, and that at this stage the Ministry of Shipping should be informed of the following particulars, instead of those indicated in (a) to (f) of my telegram Circular D. 74- (a) The name of the vessel;

(b) The quantity of bunkers on board at arrival at first Australian port;

(c) The total quantity of bunkers which the vessel wishes to lift in Australia;

(d) The next scheduled port of call outside Australia;

(e) The quantity required to take the vessel from the first Australian port to the next scheduled port outside Australia;

(f) The ultimate destination.

The Ministry of Shipping will reply on the question of total bunkers only, and will be prepared to leave it to the authorities in Australia to see that this total is not exceeded at whichever port or ports the vessel elects to draw its bunkers. Similarly, Australian authorities will use their own discretion in granting other facilities. The effect of this will be one delay only while the bunker application is referred to the Ministry of Shipping. It is hoped that no measure of priority will be given in respect of any facilities.

7. It is hoped that, in view of considerations outlined in the above, H.M. Government in the Commonwealth of Australia will be prepared to co-operate on the fines described.

[AA:A3195, 1941, 1.2611]

1 On file AA:A981, Trade 68, iv.

2 Document 305.

3 Masatoshi Akiyama.

4 In series PRO:DO 35/1062.

5 Mutilated in transmission.

6 Sir Robert Craigie.

7 Dispatched 15 February. On file AA:A816, 19/307/77.

[2], Ship Warrant scheme. H. M. Government in the United Kingdom