Your telegrams, 659 [1], 626 [2], 564. [3] New Caledonian nickel.

Position as we see it is as follows. Commonwealth Government on
30th July concluded contract with Le Nickel executed by Vois [4]
under authority vested in him, but without knowledge of
directorate in France, for purchase 450 tons matte per month.

Nothing had been done by Inco along lines suggested in your 564
and it was essential to take some action to maintain economic
position of New Caledonia, and place it in position of having to
rely on British support, thus encouraging those elements in
population who desire to follow de Gaulle. [5] Reference in your
659 to '600 tons already contracted for' is not understood.

During discussions prior to signing contract, Vois, representative
of Le Nickel, stated his company would not sell any additional
matte to Japan or elsewhere. As he was acting without instructions
from his company, Mr. Vois stated action taken by him could be
justified as quantities in contract were necessary but not more
than necessary to maintain essential Australian credits, economic
stability and cost of Administration. Vois made the point that
additional production would cause difficulties with Administration
as external credits obtained would be compulsorily converted under
existing law to credits in New Caledonian francs, future value of
which Vois considers uncertain.

Letter dated 3rd August just received from Oughton [6], who is in
Noumea, states licence to export 25,000 tons nickel ore to Japan
has just been given to Japanese company in New Caledonia, although
previously such licence had been refused. Oughton thinks Governor
[7] shows 'exaggerated respect' for Japanese Consul [8] and says
Governor told him (Oughton) he would remain under whatever
official government might be lawfully constituted in France and
had refused to declare New Caledonia free of Vichy Government.

Exact position in New Caledonia, particularly attitude of
Governor, is somewhat confused and uncertain. Commonwealth
official representative, B. C. Ballard, is leaving for Noumea
aboard s.s. 'CAGOU' on 16th instant, and you will be kept advised
of his reports on exact situation in colony.