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213 Mr J. A. Lyons, Prime Minister, to Sir Earle Page, Minister for Commerce

Cablegram unnumbered 2 June 1938,

My telegram 25th May. [1]

Following is text of reply sent today to Consul-General for Japan.

[2] Begins:-

I have the honour to acknowledge the receipt of your letter of
24th May [3], on the subject of the export of iron ore from
Australia, and to inform you that the representations which you
now make on behalf of your Government have been very carefully
considered, but the Commonwealth Government regrets that it is
unable to see any fresh grounds which would justify a variation of
the decision to prohibit the export of iron ore from Australia.

Expert opinion clearly shows that a serious position faces the
iron and steel industry of Australia in the future, and this would
be gravely accentuated if the export of iron ore were permitted.

It is felt that the right of a Government to decide what are its
own national requirements of essential raw materials, and to
determine how these can best be met, will readily be admitted. The
decision to prohibit exports of iron ore was made in pursuance of
this well recognised principle.

A policy of conservation of its natural resources by any sovereign
state to meet the requirements of its own industries is very
generally acknowledged as reasonable, and one, the force of which
I feel sure that your Government and other Governments affected
will fully appreciate. It is the paramount duty of every country
to secure its natural resources first and foremost for the service
of its national industry. This applies particularly to an
irreplaceable commodity like iron ore which is vital to the
industrial life of a nation.

Your Government will be aware that large quantities of iron and
steel are required for the development of a country like Australia
which is, after only 150 years of occupation, still quite
definitely in the developmental stage. As an example of this,
during the past five years the local consumption of iron ore has
increased very considerably, and indications are that the momentum
will be greatly increased, involving the consumption of far
greater quantities of ore within the next few years.

Many illustrations of the results of lack of conservation of
essential and irreplaceable raw materials are to be found. At one
time Italy had ample quantities of accessible iron ore within her
territories but, in consequence of its unrestricted exploitation,
she finds herself today in a position of having insufficient iron
to meet her own requirements. Sweden with her vast reserves of
iron has applied export restrictions.

With reference to the first paragraph of your letter in which you
say that your Government infers that the decision of the
Commonwealth Government is aimed principally at Japan, your
Government will note from my letter of 18th May [4] that it was
intended that the export embargo was to be general. This means not
only that foreign countries will be denied access to our resources
of iron ore, but that Great Britain and the rest of the British
Empire will be similarly affected. The United States of America
purchases substantial quantities of iron ore from Australia, and
no further exports will be permitted after 1st July. It will be
apparent, therefore, that the measure is entirely non-
discriminatory in character, even to the extent of operating
against other members of the British Commonwealth of Nations.

Moreover, your Government will no doubt be aware, from the debate
in Parliament [5] and from various press statements, that
Australian interests, especially those in the States of South
Australia and Western Australia, will be prejudicially affected by
the prohibition.

I give your Government a very definite assurance that it was in no
way intended by the Commonwealth Government that the prohibition
should be discriminatory against Japan.

The Commonwealth Government sincerely trusts that, in the light of
the foregoing, your Government will appreciate the fact that the
action taken has been solely in the interests of Australian
industry.

I may add that to the extent to which any individual Japanese
interests are affected by the decision an offer of compensation
has been made and is repeated. Ends.

1 Not printed; see Document 210, note 1.

2 Torao Wakamatsu.

3 Document 208.

4 Document 203.

5 Commonwealth Parliamentary Debates, vol. 155, pp. 1259-76.


[AA : A981, AUSTRALIA 90]
Last Updated: 11 September 2013
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