346 Prime Minister's Department to High Commissioner's Office, London

Cablegram 1118 11 March 1941,

Flour shipments North China. Australian Wheat Board experiencing difficulty securing British Ministry of Shipping Warrants for North China. Navy Office has informed Board that vessels not to proceed north of Hong Kong without its consent. Board cabled London recently and asked if the Norwegian Mission would agree to charter for Hong Kong with object transhipping from there for North China ports also if they would recharter three Yugoslav vessels at present on passage to Hong Kong. Request was refused and Board informed that, if it persisted, owners of Yugoslav vessels would be directed to refuse Board's business and fix elsewhere.

The North China markets are very important outlets for Australian flour and it is desirable that we retain them. We are unable however to reconcile attitude of Ministry of Shipping with views expressed by Ministry of Economic Warfare as shown your telegram No. 156 of 26th February, 1941. [1] Would appreciate information which would clarify position including reasons for Ministry of Shipping's objections to the chartering by the Wheat Board of vessels for Hong Kong.

1 On file AA:A1608, 1. 37/1/4. It reported that the U.K. Ministry of Economic Warfare did not possess evidence that would justify asking Australia to withhold flour exports to Japan, Japanese- occupied China or Japanese firms in Shanghai. The Ministry did, however, request that Australia refrain from making direct exports to Dairen and Manchuria.

[AA:A3196, 1941, 0.3042]