Following telegrams received from Latham , forwarded for your information:-
Have heard wireless report of proposed appointment of Australian Minister to Chungking.
If this is done it is sure to produce strong anti-Australian reaction here. Accordingly I suggest announcement of appointment if made should include statement that all countries recognise existence of Chungking Government as a fact, that Chinese Consuls are already in Australia and that new appointment therefore does not change existing position and policy, but does reciprocate desire of friendly Government for common recognition of closer relations between our countries.
I feel bound to say, however, that viewed solely from Japanese- Australian point of view such an appointment will not help our relations. I presume British Government has been consulted.'
My telegram 168.
Changes reported in my telegram 170  appear to be a good reason for moving very cautiously at present. The new appointments appear to be in our favour, but they will almost certainly stir up radical and pro-Axis elements to increased activity. I do not advocate any attempt at "entanglement", but I do deprecate any unnecessary action which may be used as an excuse to aggravate the situation so as to strengthen the remaining Axis supporters.
Therefore I believe there are good reasons for postponing any action with regard to representation at Chungking until situation here has developed further.'