502 Mr S. M. Bruce, High Commissioner in London, to Mr R. G. Menzies, Prime Minister

Cablegram 2915 LONDON, 11 June 1941, 10.50 p.m.

MOST IMMEDIATE SECRET

WHEAT TO JAPAN Your telegram 2768. [1]

Have taken up the matter with the Ministry of Economic Warfare who have drawn attention to the following facts.

(1) Domestic wheat crop of Japan rose from about 1,000,000 tons per annum during the period 1931/37 to 2,000,000 tons in 1940, the latter being only slightly set off by the decline in Manchukuo and North China harvests.

(2) As a result of (1), imports by Japan declined from about 400,000 tons in 1935/36 to 10,000 in 1938/39.

(3) In 1940, however, imports rose considerably, and in 1940 [2] Japan has already purchased 200,000 tons in Australia, 150,000 tons in Argentine and certain quantities in Canada and the United States.

On the above facts, the Ministry concludes that if Japan now wants another 50,000 tons, it can only be to create a stock against an emergency in which the British and American sources of supply would be denied to her. It seems to the Ministry that Japan is attempting to obtain from Australia what she has recently been refused in Canada which has placed an embargo on wheat to Japan other than that contracted for prior to February 12th last.

The Ministry's attitude towards supplies of wheat to Japan from the Empire generally is that it would be reasonable to limit them to the normal quantities, in their opinion it would be difficult to push a global empire quota above 200,000 tons already bought in Australia.

The British Ambassador at Tokyo [3] has recently advised the Foreign Office that restriction of food supplies would be likely to have more serious repercussions in Japan than any other form of restriction. Therefore while Ministry does not think it could be said that Japan has been kept short of wheat they are going into the general question of foodstuffs supplies to Japan and will advise conclusions reached.

In the meantime if you consider it inadvisable to make a complete refusal of present request, Ministry so far as they are concerned would raise no strong objection but hope that the amount would be much less than 50,000 tons.

Ministry adds that from an economic warfare point of view, wheat is of less importance than copra to which you refer in your telegram. While there would, in their opinion, be little danger of Japan sending wheat to Germany, there is evidence that she is supplying Germany with copra and other fats and if you feel reluctant to refuse the Japanese request for both wheat and copra, Ministry very much hopes that you will stand firm on copra and relax a little on wheat if necessary.

BRUCE

1 Document 482.

2 Amended to read '1941' in an unnumbered cablegram received from Bruce on 12 June. See file AA: A1608, 1.37/1/4.

3 Sir Robert Craigie.

[AA: A981, TRADE 68, iv]