342 Mr M. Akiyama, Japanese Consul-General in Australia, to Mr R. G. Menzies, Prime Minister

Letter SYDNEY, 5 June 1940

I desire to refer to your letter AH42/1 of January 25th, 1940, on the subject of the prohibition of the export of iron ore from Australia. [1]

In this regard, I beg to inform you, by instruction of the Japanese Government, that there is an increasing feeling of unrest among the Japanese interests who have investments in the Yampi Sound enterprise, which is understandable in view of the fact that this question has now been pending for fully two years, and that, while awaiting its settlement, those interests must necessarily leave their large investments in an uncertain condition in the midst of rapidly changing internal and international circumstances. Further, an early settlement of this matter is very desirable in the interests of the good relations between our two countries. I am therefore instructed by my Government to invite your attention again to my letter dated December 19th, 1939 [2], in which I stated that the Japanese Government was anxious to know your Government's decision on the matter of the exportation of the ore, and added that, should it be decided to continue the embargo, the Japanese Government would have no alternative but to take up the matter of the claim for compensation for the loss sustained by the Japanese interests.

I shall be much obliged if you will give this matter your consideration at the earliest possible date, so that, if necessary, we can enter into a discussion of the question of compensation, as anticipated by your predecessor, the late Right Honorable J. A. Lyons, in his statement in the House of Representatives on May 19th, 1938, that 'the Government will be prepared to examine and consider equitable claims for the reimbursement of expenditure which up to this date has actually taken place in connection with developmental operations directed towards the exploitation of our iron ore resources for export'.

[3]

M. AKIYAMA

1 Document 28.

2 Documents on Australian Foreign Policy 1937-49, vol. II, Document 422.

3 On file AA: A1608, C47/1/4, vii, there is a carbon copy of a letter of acknowledgment from Menzies to Akiyama dated 13 June 1940. It is probable, however, that the original was not sent to Akiyama as Cabinet decided the question the Same day; them is no copy of the letter on the files of the External Affairs Dept and neither Menzies nor Akiyama refer to it in subsequent correspondence. Menzies's letter to Akiyama of 17 June is printed as Document 393.

[AA: A981, AUSTRALIA 90B, ii]