12 Mr R. G. Casey, Minister to the United States, to Department of External Affairs
I saw Sumner Welles  today.
They have information that 11 Japanese troopships left Chinese
ports today and that a convoy of Japanese troopships (strength
unspecified) has also left Formosa for unknown destination.
Sumner Welles said that their information was that the Japanese
would attack Indo-China bases on July 24th.  French may or may
not put up token of resistance.
As soon as the fact of Japanese occupation of additional areas in
Indo-China can be definitely established (which Sumner Welles
thought would not take longer than two days after such occupation)
United States would take the following economic action:-
(a) Freezing of all Japanese funds in United States.
(b) Stoppage of practically all imports from Japan including silk.
(c) Limitation of export of all petroleum products from United
States to Japan to the level of some past year such as 1934.
(d) Further reduction in octane rating petrol exportable to Japan.
Sumner Welles said he had no clear idea what economic action
Britain and Australia propose to take but he hoped that the lack
of economic action by us would not offset the abovementioned
United States action.
I asked Sumner Welles if he did not think some further warning to
Japan was worth while. He said that except for precise knowledge
of details Japanese already knew some such strong industrial
action as the above would follow on any further aggression.
On my inquiring what response he anticipated that Japan would make
to the above American action he said that he expected renewed
public outburst regarding British-American policy of
'encirclement' and strong protests but nothing more.
1 U.S. Acting Secretary of State.
2 Casey's cablegram 548 of 22 July (on file AA : A981, Indo-China
7, i) indicated that this probably meant '23rd July Australian
3 Casey cabled further details of proposed U.S. economic sanctions
on 22 July. See cablegram 550 on file AA : A981, Far East 20B, i.
[AA : A981, FAR EAST 20B, i]