129 Department of External Affairs to

Mr R. G. Casey, Minister to the United States

Cablegram 179 20 September 1940

Your Was. No. 43/40. [1] Would be glad of advice whether wheat and flour exports still being subsidised and if so whether it is intended to continue subsidy.

Commonwealth Government recently decided that no further sales wheat and flour would be made to Japan on extended credit terms.

[2] Japanese companies were informed that Wheat Board authorised to negotiate sales on basis fifty per cent. cash against shipment and balance in 120 days from shipment. Japanese companies have now offered to purchase flour on credit and also cash at ridiculously low prices and it would seem that they are using American subsidy to secure reduced quotations for Australian products by setting off subsidy against credit terms and lower prices. Continued payment of American subsidy is creating difficulties for Wheat Board in effecting sales of wheat and flour to China on other than extended credit terms.

1 Not found.

2 On 23 August Full Cabinet approved the sale of 50 000 tons of flour and 100 000 tons of wheat to Japan on payment terms of half cash on delivery and the remainder within 120 days. See AA:A2697, vol. 5, Minute 456.

[AA:A981, TRADE 68, iv]