262 Prime Minister's Department to High Commissioner's Office in London

Cablegram unnumbered 4 October 1939,

The Lake George Company has approached the Government regarding the disposal of its production of lead and zinc concentrates estimated at 4,500 tons per annum. It states that it had contracts with Belgium and Germany under which it sold its full surplus. The Company seems to be in doubt as to the position of its Belgian contracts though in an interview with its representative the impression was formed that the main trouble might be the securing of freight space.

Definite enquiries by Japan for lead and zinc concentrates have come under notice and these are of interest not only to the Lake George concern but to other Australian producers. One producer has been approached by a Japanese concern and he has sought our advice on the principle of sale of such commodities to Japan.

The following points seem to us to emerge and we shall be glad if you make enquiries- (a) Can the exact position of the Lake George Company in respect of its Belgian contracts be stated? (b) Is the United Kingdom Government interested in the purchase of lead and zinc concentrates? The Lake George Company will apparently be closed down if it cannot dispose of its production.

This will mean the abandonment of the whole settlement of Captains Flat which the Commonwealth Government would wish to avoid.

Failing sale of the concentrates the Government has been asked to finance storage but there is little likelihood of the request being met. Summed up, the Commonwealth Government would very much welcome any action to facilitate the sale of the surplus.

(c) Failing sale in the United Kingdom, what would be the view of the United Kingdom Government to disposal of lead and zinc concentrates to Japanese interests by Japanese producers? The quantities involved might be substantial. We have noted Stirling's message to External Affairs of September 26th on the subject. [1]

The question is urgent. The matter of Japanese purchases particularly so. [2]

1 Document 246.

2 An unnumbered cablegram was sent to S.M. Bruce, High Commissioner in London, on 9 October 1939 requesting an urgent reply. Bruce replied to questions (a) and (b) in an unnumbered cablegram dispatched on 11 October 1939. (Both cablegrams are on file AA: A981, Trade 6.) His reply to question (c) is printed as Document 271.

[AA: A981, TRADE 68, iii]