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

Circular cablegram D182 LONDON, 5 April 1941, 3.51 p.m.

SECRET

1. We have been considering the possible steps which we could take
inter alia in economic sphere as counter action in the event of
further Japanese moves to the south. Two suggestions have been
made which seem to be worth considering as possible reprisals.

They are:

a. placing of Mitsui, Mitsubishi or Okura on the black list and
b. denunciation of the Anglo-Japanese Commercial Treaty
2. Our preliminary views on these two suggestions are as follows:

3. The black listing of one or other of the above firms might
bring home to the Japanese industrialists the perils of bad
leadership. If at any time in the future such a step were to be
decided on, we think that also it might be well to begin with
Okura who are regarded as being largely interested in German
trade, and that Mitsubishi should be listed before Mitsui who have
shown themselves rather more friendly to British interests. A
simultaneous listing of all three might have even more adverse
effects on trade of Empire countries than on Japan itself.

The same violent reaction might also be anticipated to this step
as is to be feared from a complete oil embargo or other extreme
economic sanction.

4. The argument in favour of denouncing the Anglo-Japanese
Commercial Treaty is that although a year must elapse before its
expiry, denunciation would have a considerable political effect in
Japan, particularly if accompanied by some statement to the effect
that in view of Japanese restrictions on British trade it had
become obvious that the treaty in its present form no longer
served any useful purpose. If Japan were to take over Indo-China
after coming to an agreement with Russia and the treaty were then
to be denounced Japanese industrialists would perhaps feel that
the sacrifice had been unnecessarily great and the unpopularity of
the Government of Pro-Russian policy would increase.

5. We have asked H.M. Ambassador at Tokyo [1] for his views on the
above suggestions. We realise of course that it is not possible to
give a precise appreciation of their effect failing an exact
indication of occasion of commencing application.

H.M. Ambassador has also been asked to ascertain the views of his
Commonwealth colleagues in the matter.

6. We should be grateful for any observations the Dominion
Governments may wish to offer on these two proposals.

1 Sir Robert Craigie.

2 Sir John Latham.


[AA: A981, TRADE 68, iv]
Last Updated: 11 September 2013
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