Menzies [1] and Bruce [2] yesterday saw the Foreign Office who
agreed that in the circumstances it might be unwise for Craigie
[3] to make any preliminary or special announcement to the
Japanese Government. They agreed that it would be sufficient if
statement to be made by you were communicated to the British
Government in time for them to convey it to Craigie so that he
would be in a position unofficially to confirm to the Japanese
Government that the prohibition is not discriminatory.

We have discussed among ourselves the question of compensation to
the Yampi Company. Menzies feels strongly that in view of the
failure of the Commonwealth Government to act over a substantial
period and in view of the public statement made it may well be
argued that the Commonwealth tacitly assented to operations and
that the Yampi Company in consequence has some moral claim to
compensation for actual leases. If you agree with this we think
that it would do much to prevent any bad reaction in Japan if the
statement you make on prohibition included a statement to the
effect that as action taken for substantially national reasons the
Government will be prepared to examine with any mining Company
affected, the question of giving special consideration to that
Company. Bruce agrees with this view. White [4] and I do not feel
quite so strongly as Menzies but would be disposed to agree and
think that if the question of compensation is to arise it is
better for us to state our position graciously at the outset
rather than be forced into it by subsequent agitation and perhaps
argument with the Japanese Government.

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