170 Cablegram From Watt To Department Of External Affairs
22nd November, 1956
392 SECRET AND GUARD PRIORITY
Trade Negotiations with Japan I have only just seen Stuart's telegram. 389 of 21st November  and feel bound to make certain comments.
2. Kono's power. In my opinion the estimate of Kono's power given in the telegram is somewhat exaggerated. My view is based primarily on the following summary of the American record of the conversation between Allison  and Kishi on 30th August 1956.
'Kishi said that the Federation of Economic Organisations and Japan Management Association were almost unanimous in the view that Hatoyama should retire and that Kishi should become Prime Minister. But they were afraid of Kono and insisted that if Kishi became Prime Minister he should break with Kono. There were two big mistakes of judgment here. Kono was able, young and a politician with a future. He was no worse than the average Japanese politician and in addition he was capable. Business firms believed that Kono was evil from head to toe. In fact though not a model of perfection or of political morality, Kono was not as bad as this. Again, business interests overestimated Kono's strength- they thought he could do anything he wanted. This was not so. His power came from two sources namely:
(a) Bukichi Miki (now dead)  and (b) Hatoyama.
Much of Miki's influence had now passed. If Hatoyama retired much more of Kono's strength would go. Though Kono was a strong man and had influence in the party he was not all-powerful. He was nowhere near the man Kishi's younger brother, Eisaku Sato, or the Yoshida faction's Hayato Ikeda was.' Ends.
(The above information and source should not be quoted anywhere).
It is true that the present power of Kono may for some purposes be temporarily somewhat greater than that indicated above. While individuals are competing for the Prime Ministership Kono's support may be valuable. Nevertheless the latest press reports suggest that Kono has committed himself to support Kishi. If so I do not see why other contenders for the Prime Ministership such as Ishibashi should be fearful of 'tangling with Kono': Indeed it is arguable they might wish to clash with him if for instance his influence is the sole obstacle to the granting of reasonable Australian requests.
3. I agree with the suggestion that everything possible should be done to 'work on' Takasaki while in Australia. In my memorandum 917 of 1st November I recommended that Ministerial attention should be given to Takasaki while in Australia in view of the importance of his position here.  There is now an additional argument for this.
4. Again I would suggest that Suzuki be called in and asked to bring his influence to bear on the Foreign Office with a view to strengthening their hand against Kono.
5. While I am not in a position to express any firm opinion on the desirability or otherwise of an 'adjournment' as distinct from a temporary breakdown in the negotiations I put forward the following points for consideration in Canberra. From the political point of view a temporary breakdown need not be disadvantageous.
If, as I believe, our offers and requests are reasonable and if the real cause of the breakdown can somehow or other be made known not only officially but also publicly in Japan we can scarcely be charged with causing the breakdown; while the breakdown itself may possibly diminish Kono's influence in future. But political effects must presumably be considered together with economic effects which I am not in a position to evaluate. If the Department of Trade estimates that adjournment, as distinct from temporary breakdown, would secure for Australia certain economic advantages this would be an important argument for adjournment. On the other hand you may judge that adjournment may give undesirable 'cover' to Kono and facilitate agreement by Japan to accept American wheat etc. It is conceivable to me that the Japanese may be bluffing, at least as regards wool and would take the amount we desire even though temporary breakdown occurred.
6. Finally I suggest we should be reluctant to adopt any policy based upon assumption that one Japanese Cabinet Minister for personal reasons can override the considered opinion of all the other relevant Ministers and Officials based upon their estimate of Japanese National interests.