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

Cablegram 109 22 February 1941,

Your secret telegram 110 of 20th February. [1] Ship Warrant Scheme. Commonwealth Government quite appreciates that possibilities of securing co-operation of Japanese shipowners for this scheme should be fully tested.

The points made by Japanese Consul General [2] were forwarded to you for information and general background. There is no misconception of the nature of the scheme on the part of the Commonwealth Government which appreciates full significance of scheme. You will no doubt appreciate our desire however to be kept fully informed of developments and any negotiations proceeding on matter of such importance in the relationship between the Empire and Japan and particularly as affecting Australia. The Commonwealth Government also feel that it would be desirable to obtain your opinion [as] to the ultimate results of the measures adopted.

It was considered that the proposal contained in your Circular D.74 [3] would not suit Australian conditions and would produce a result much more severe than contemplated. Commonwealth Government will co-operate on the lines indicated in your telegram 110. It is pointed out, however, that no request has been made for bunkers by Japanese vessels since the inauguration of Ship Warrant scheme.

Quite independently Commonwealth Government was considering whether it would be wise to grant bunkers to Japanese ships unless payment were made in dollars.

It is noted from your telegram that Commonwealth authorities should use their own discretion in granting facilities other than for bunkers. You may rest assured that no measure of priority will be given in respect of these other facilities. Indeed our objective broadly speaking will be in the reverse direction.

1 Document 310.

2 Masatoshi Akiyama.

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

[AA:A3196, 1941, 0.2294]