MOST URGENT

Your telegram 18th May, Yampi Sound. [1]

Amendment proposed in my telegram 17th May [2] was directed to the
specific exclusion of the words 'claim for reimbursement of any
expenditure' as these words go much further than compensation for
actual loss. We note however that the words we suggested should be
deleted have crept back into the revised text. We would urge
wording proposed by us be adopted.

We regret very much that you have not accepted our suggestion that
any claim arising out of this should be regarded as a private
claim by a private company and not be made the subject of inter-
Governmental negotiations. Your draft letter [3] to the Japanese
Consul-General [4] appears entirely to depart from our idea. We
would again urge that any correspondence with the Japanese Consul-
General should be placed on the basis of conveying information
only. We fear that if correspondence is not placed on this basis
the Yampi question may involve both shipping question and current
trade treaty negotiations. [5]