only alternatives appear to be either to exclude Japanese shipping
from access to British facilities altogether or to place Japanese
shipping in a privileged category, thus endangering the success of
the whole scheme. This success has been considerable and about
three quarters of the world's ocean-going tonnage are now warrant
holders, or if enemy ships are excluded, four-fifths. The
analogous political position of Spain has not prevented adherence
to the scheme of most of the more important shipping companies,
including certain companies which are in a considerable degree
under the control of the Spanish Government. H.M. Government in
the United Kingdom would view with alarm any suggestion of a
change of policy likely to jeopardize the system which has become
such an important part of our shipping and economic warfare
policies.

2. The Japanese Consul-General's [3] protest reported in your
telegram 62 proceeds upon complete misconception of the nature of
the ship warrant scheme. The questions of international law are
irrelevant to the discussion of the scheme which is in essence a
commercial bargain. For supply and other reasons arising out of
the war, it has become necessary to set a price on the services
which are offered in British Commonwealth ports to neutral ships.

Unrestricted access to these facilities is therefore confined to
those neutral shipowners who gave some return by rendering
assistance to us by provision of tonnage and/or anticipating our
blockade regulations (inviting statements by Ministers of Economic
Warfare and Shipping quoted in my telegram Circular D. 379 of July
29th [4]).

3. We have hitherto refrained from asking the Japanese for
assistance by the provision of tonnage and confined ourselves to
asking them for undertakings to observe our blockade regulations.

The argument set out in paragraph 2 of your telegram under
reference is, in our view, quite untenable since the scheme is
world wide in scope and depends for its efficacy on the ability to
exert pressure in one area on vessels engaged in other areas, for
example, the Pacific, where our Navy is inadequate. In countering
the Japanese contention, we feel that an explanation of this...[5]
scheme in paragraph 2 would dispose of this argument.

4. With reference to the last paragraph of your telegram 62, there
is no foundation in fact for the allegation of the Japanese
Consul-General. No Japanese vessel has yet obtained a ship
warrant, nor has any Japanese ship been detained for any period.

On the contrary, although the Japanese ships have been subjected
to a nominal delay of 24 hours, ostensibly for reference of
applications for facilities to London, facilities have never been
withheld from Japanese ships.

5. H.M. Ambassador in Tokyo [6] has been requested to keep his
Australian colleague in future informed of the course of
negotiations with the Japanese shipowners. As a result of securing
the co-operation of the United States insurance market, there are
some indications of a more tractable-attitude on the part of some
Japanese shipping companies.

6. With reference to your telegram 100 of 17th, we realise that
the procedure suggested in my telegram Circular D.74 [7] may prove
embarrassing to the Commonwealth Government. The decision to
impose full delays on Japanese ships was taken in view of the
deterioration of the situation in the Far East.

However, in order to meet the difficulties arising out of the fact
that Japanese vessels make several calls in Australia, it is
suggested that the authorities in Australia should request the
Master to state, at the first port of call in Australia, what
facilities, including fuel, he will require at all Australian
ports, and that at this stage the Ministry of Shipping should be
informed of the following particulars, instead of those indicated
in (a) to
(f) of my telegram Circular D. 74-
(a) The name of the vessel;

(b) The quantity of bunkers on board at arrival at first
Australian port;

(c) The total quantity of bunkers which the vessel wishes to lift
in Australia;

(d) The next scheduled port of call outside Australia;

(e) The quantity required to take the vessel from the first
Australian port to the next scheduled port outside Australia;

(f) The ultimate destination.

The Ministry of Shipping will reply on the question of total
bunkers only, and will be prepared to leave it to the authorities
in Australia to see that this total is not exceeded at whichever
port or ports the vessel elects to draw its bunkers. Similarly,
Australian authorities will use their own discretion in granting
other facilities. The effect of this will be one delay only while
the bunker application is referred to the Ministry of Shipping. It
is hoped that no measure of priority will be given in respect of
any facilities.

7. It is hoped that, in view of considerations outlined in the
above, H.M. Government in the Commonwealth of Australia will be
prepared to co-operate on the fines described.

[AA:A3195, 1941, 1.2611]

1 On file AA:A981, Trade 68, iv.

2 Document 305.

3 Masatoshi Akiyama.

4 In series PRO:DO 35/1062.

5 Mutilated in transmission.

6 Sir Robert Craigie.

7 Dispatched 15 February. On file AA:A816, 19/307/77.