Your circular telegram D. 123 of 13th April. [1] We are gravely
concerned at issue of orders to Chinese station to intercept ships
destined directly or indirectly for Vladivostock, especially in
light of my cable of 4th April [2] which expressed our considered
view such action would be provocative and ineffective.

It would seem from reports issued by Ministry of Economic Warfare
that major stream of traffic via trans-Siberian railway emanates
from American sources, and action being taken would check minor
stream only, as carried mainly by Japanese and Dutch vessels
voyaging along southern routes.

Further, the proposal outlined in your circular telegram D. 124
[3] to negotiate an agreement with Japan to reduce export of vital
war commodities to Russia and Germany is out of harmony with the
decision now in question and seems likely to be nullified at
outset.

From broadest aspect, it appears to my Government the war is
entering on vital and critical stage, when it is incumbent on us
not to precipitate matters either with Italy, Russia or Japan.

With the first two it can be assumed that a decision by them to
participate will be quite outside Allied control, but with Japan
the issue may well depend on our own conduct and actions.

Thus, apart from the disquieting effect on Australian position, we
feel in general interests of Allied effort that the gain to be
achieved by interception and diversion of ships in Far East is not
commensurate with the risks involved. In this respect we are bound
to say that the proposal for a negotiated agreement should in our
opinion be first put into effect and then if those negotiations in
fact fail, further consideration can be given to the more drastic
action of direct interception.

For these reasons, we urge that the orders already given be
immediately reviewed before untoward incidents can occur. [4]