1 Mr R. G. Menzies, Prime Minister, to Lord Caldecote, U.K. Secretary of State for Dominion Affairs

Cablegram 339 1 July 1940,

MOST SECRET

In furtherance of the declared policy of fostering and developing

friendly relations in countries on the Pacific, Australia has

established a legation at Washington, and as you are aware has

taken the formal steps to establish one immediately at Tokyo.

We have ample evidence that Japan was disappointed that the Tokyo

and Washington Legations were not established simultaneously.

For some time the Consul-General for China [1], acting on definite

instructions from his Government, has been pressing for the

establishment of a legation in China simultaneously with that in

Japan. He has renewed representations during the past week. [2]

We have given consideration to this question in our review of the

general Far Eastern and Pacific situation this week.

From the aspect of post war economic and political conditions, on

the assumption that a substantial portion of China will remain

under the control of the National Government and by virtue of our

adherence to the League resolution to do nothing to weaken the

position of China in the face of Japanese aggression, a case can

be made out for the establishment of such a legation.

On the other hand, we feel that such a step may be resented by

Japan, and would nullify the favourable effect of the decision in

regard to Tokyo.

It has already been suggested by Japan that Australia should

recognise the new order in Eastern Asia, as specifically referring

to the Wang Ching Wei Government. [3]

The position in the Far East is so unstable at the moment that it

is not inconceivable that the United Kingdom Government itself may

have to consider the advisability of recognising the latter

Government.

We do not wish to take any action which may irritate Japan while

at the same time we have a friendly feeling in relation to China.

Before arriving at a definite conclusion, I would be glad to have

the views of the United Kingdom Government on the question.

1 Dr C. J. Pao.

2 See Documents on Australian Foreign Policy 1937-49, vol. III,

Document 431.

3 Wang Ching-wei established a government under Japanese

sponsorship at Nanking on 30 March.

[AA: A3196, 1940, 0.4336]