Agendum 219/1940 30 September 1940

SECRET

APPLICATION OF SHIP WARRANT SCHEME TO JAPAN

The United Kingdom Government has asked the Commonwealth
Government to apply the ship warrant scheme to Japanese ships
entering Australian ports. If we agree to the proposal it will
require steps to be taken to delay the supplies of bunkers, stores
and other facilities to Japanese ships for a period of twenty-four
hours at the Australian port where the principal supplies are to
be taken on board. The twenty-four hours' delay would be brought
about administratively.

2. This procedure is an interim one adopted for the purpose of
compelling Japanese shipping companies to agree not to take
cargoes to European or Mediterranean ports unless an export permit
has been granted by the Dominions or a British Consular
Authorisation is granted in foreign countries. The ultimate
procedure proposed to be adopted against Japanese shipping which
had not agreed to comply with the United Kingdom blockade policy
would be a denial of all port facilities to all ships owned by
Japanese shipping companies which are not prepared to make
agreements with the United Kingdom Government.

3. It was considered that the Japanese Government would regard any
interference with Japanese shipping as a major question. Not only
is the industry one of the most important in Japan but national
prestige is also involved. The United Kingdom Government was asked
the following questions [1]:-

(a) Were they confident that the interim procedure would assist
them in negotiations with Japanese shipping companies?
(b) If the question developed into a major political one had the
United Kingdom Government determined their ultimate attitude? It
was pointed out that if the procedure were abandoned in the face
of strenuous opposition on the part of the Japanese Government
loss of British prestige was inevitable and abandonment would most
likely encourage or stimulate Japanese hostility in other
directions.

(c) Whether any considerable tonnage of Japanese shipping is
engaged or is likely to be engaged in carrying cargoes to European
and Mediterranean ports.

(d) If no considerable tonnage is engaged is it worth while
applying the proposed procedure to Japanese ships?
(e) Result of negotiations with Japanese shipping companies to
date and prospects of obtaining required undertakings.

(f) Views of other Dominions.

4. The New Zealand Government were evidently concerned and asked
our views. [2] They advised the United Kingdom Government that the
points raised in our telegram had general application to New
Zealand and that full co-operation on their part should be
contingent upon concerted action by the two Dominions. [3]

5. The United Kingdom Government replied as follows [4]:-

(a) Japanese aspect has been most carefully considered by them but
they do not apprehend that adoption of suggested procedure would
raise major political issue.

(b) Japanese ships might from the outset have been denied all port
facilities but the interim procedure was evolved to meet the very
points which the Commonwealth Government advanced.

(c) For the successful working of the scheme and its prestige as a
world wide arrangement concerning British controlled facilities it
is essential to apply it to Japan.

(d) It is considered that a delay of twenty-four hours which would
be attributed to administrative reasons should not arouse
justifiable opposition or protest and the Japanese could not in
any case accuse the authorities of immediately withholding
facilities.

(e) No considerable tonnage of Japanese ships is trading to
European or Mediterranean ports but it is considered important to
uphold the principle involved.

(f) One or two important Japanese shipping companies have already
approached the Ministry of Shipping but it is not necessarily
expected that all Japanese shipping interests will agree to give
the necessary undertakings and it is not the present intention to
force them to do so where no practical issue arises.

(g) The Government of India has agreed to bring this scheme into
force. The views of the South African Government have not yet been
received.

6. The United Kingdom Government brought the scheme into operation
in the United Kingdom and colonies on 23rd August. On 17th
September they advised that the Japanese Government have [sic]
made a restrained protest in Tokyo and London regarding the
treatment of Japanese ships. [5] The general attitude of the
United Kingdom Government is that they are prepared to discuss any
practicable alternative to the ship warrant scheme which will
secure the same ends.

7. On 21st September New Zealand Government informed us [6] that
United Kingdom Government should be supported and that a united
front should be presented by all Dominions acting in concert with
the United Kingdom and that if this were possible it would have
the desired effect on the Japanese Government.

8. The issues raised have probably more significance for Australia
than any other part of the Empire. The United Kingdom Government
have avoided replying to our question as to what their attitude
will be if Japan treats the question as a major political one. It
is difficult to agree with the United Kingdom Government's opinion
that the delays should not arouse justifiable opposition or
protest and that the Japanese could not in any case accuse the
authorities of immediately withholding facilities. Even if this
United Kingdom viewpoint is agreed with there still remains at the
background the question of withholding all port facilities from
Japanese vessels.

9. The question, however, appears to have been decided by Japan
herself. The alliance she has made with Germany and Italy will no
doubt require her to use her best endeavours to supply these
countries with materials of which they are short and these two
countries will no doubt encourage her to use her shipping in such
a way as will bring about impairment of the blockade policy or
alternatively involve the British Navy in 'incidents' with
Japanese shipping. In any case we can anticipate that Germany and
Italy would expect Japan to test thoroughly the blockade policy
and Japan may be encouraged in this action if there are any
apparent weaknesses or differences in policy among the Dominions.

It is now more imperative than ever that the Empire should present
a united front on this ship warrant scheme.

Recommendation
10. It is recommended that the United Kingdom Government be
informed-
(1) That the Commonwealth Government is agreeable to carry[ing]
out the interim procedure insofar as Japan is concerned (we have
already put this scheme into operation insofar as other ships to
which it applies are concerned) [7] and that this would be applied
at an early date.

(2) That before the ultimate procedure of denying all port
facilities to Japanese shipping is brought into force the
Commonwealth Government would desire a full exchange of views with
the United Kingdom Government on the question. [8]

G. MCLEAY