200 Sir Earle Page, Minister for Commerce, to Mr J. A. Lyons, Prime Minister

Cablegram unnumbered LONDON, 17 May 1938

MOST URGENT Your telegram of 17th May to High Commissioner, Yampi Sound. [1] All of us [2] are disturbed by the suggested terms of the statement firstly because we think that making the only specific reference to Yampi is inconsistent with the fact that the prohibition is to be nondiscriminatory and is to affect other exporters than Yampi company, and secondly because we think the offer to give compensation goes too far as the amount of money expended may very well be much greater than the actual loss incurred.

We therefore suggest omission of three paragraphs, beginning 'in reaching its decision' and ending 'operations of Yampi lease', and substitution therefor of following:-

'The Department of Commerce will be prepared to examine with any mining company affected by the present decision questions arising in relation to expenditure which has up to this date actually taken place in connection with development operations.' As to communicating the decision to Japanese Consul-General [3] we consider it should be done on the basis as set out in my cablegram to you of 13th April [4], as follows:-

'In any correspondence with the Japanese Consul-General we think an endeavour should be made to notify him on the basis of conveying information only, as the decision will affect, apart from one Australian company, viz. Broken Hill Pty Ltd, a British company and a Japanese company. Should subsequently the Japanese Consul-General, under instructions from his Government, endeavour to make an inter-Governmental negotiation of the question, we consider he should be informed that the Commonwealth Government is prepared to enter into correspondence only on the basis that it concerns an investment by a private company.'

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1 Document 198.

2 Page, R. G. Menzies (Attorney-General), T. W. White (Minister for Trade and Customs) and possibly S. M. Bruce (High Commissioner in London).

3 Torao Wakamatsu.

4 Document 186.

[ANL : PAGE 758]