184 Mr Torao Wakamatsu, Japanese Consul-General in Sydney, to Mr J. A. Lyons, Prime Minister

Letter (copy) SYDNEY, 11 April 1938

With further reference to my letters of March 26th and April 5th [1], regarding the matter of iron ore exports from Australia, I have the honour to communicate to you, under instructions from my Government, firstly, the very deep concern felt by the Imperial Government regarding this matter, since, apart from the question of the safety of Japanese investments in Yampi Sound, Japan is the country which would be most seriously affected by any far-reaching restriction on iron ore supplies from this Commonwealth and, secondly, their earnest desire for a guarantee by the Federal Government that no disturbance shall be caused to the basic foundations on which a vast amount of Japanese capital has been vested in Yampi Sound, with the definite approval and general support of the West Australian Government.

In connection with the latter point, I am instructed to mention that, although newspapers of recent dates in this Commonwealth have reported that the licence system for exports of iron ore is likely to be adopted by the Federal Government, pending the completion of full investigations, the Japanese Government hope that your Government will be good enough, whether this system be adopted or not, and whatever the result of the investigations may be, to give permission, practically, for the export to Japan from Yampi Sound of a total quantity of at least twenty-five million tons of iron ore-preferably at the rate of one million tons every year for a period of twenty-five years-which is the minimum basis on which both the mining enterprise in Yampi Sound and the iron works in Japan prepared specially in this connection, can economically be carried on.

Further, I desire to state that I am informed by Mr Fujimura, Director of the Nichinan [sic] [2] Mining Company-the Company which has invested the necessary capital in the enterprise and has the sole right to import the iron ore to Japan-that the preparatory work must be continued in any circumstances, as it is absolutely impracticable to interrupt the progress of a work on such a huge scale.

TORAO WAKAMATSU

1 Documents 170, 178.

2 Elsewhere described as Nippon Mining Company (see attachment to Document 249).

[AA : A981, AUSTRALIA 90]