As indicated to you in our 983 [2], Commonwealth Government's view
has been that delay is so important at present that every
reasonable step should be taken to avoid breakdown of Hull-Kurusu
talks. [3] However, British Government's attitude was rather to
brush aside Craigie's recommendation to accept Japanese overtures
for British intervention in talks. [4] It now appears that as a
result of Hull's conferences Ambassadors and yourself Japan has
been successful in obtaining unofficial but practical intervention
of other powers in Washington conversations. [5] An opportunity is
thus presented to us which otherwise might be lacking, and your
activities are approved and should be discreetly pursued.

In their present form the Kurusu propositions are open to the
objections specified by Hull in your 1013. [6] Above all they do
not correspond Kurusu suggestion to Hull described in your 994.

[7] Kurusu's suggestion was that Japan would withdraw her troops
from Indo-China in return for obtaining release of small
quantities of rice and oil. [8] As subsequent telegram M375 from
Dominions Office [9] indicated, such Japanese withdrawal might
fairly be regarded as a justification for our easing certain
restrictions because it was Japanese aggression in Indo-China
which occasioned the restrictions. However, the proviso of
telegram M375 was that there should be no semblance whatever of
abandoning China.

Taking the propositions in order [10], No. 1 leaves Japan free to
act as she likes both in relation to China and also to Russia. If
Japanese regard the Russo-Japanese non-aggression pact as still in
existence, they should be prepared to repeat the undertaking
contained in it. With regard to China, Clause 2 of declaration
rather suggests danger of Japanese troops attacking China from
northern part of Indo-China. Moreover, Clause 2 places no real
obligation on Japan for complete withdrawal of her troops from
Indo-China because both events specified for date of withdrawal
may be indefinitely postponed by unilateral action on part of
Japan. Clause 5 means abandonment of aid to China.

On the other hand, the draft heads of a possible arrangement
between Japan and U.S.A. should give opportunities for
considerable discussions, amendments, counter-proposals, and
further valuable time may be gained thereby. At this stage it is
premature to ask us to indicate the amount of economic relief that
might be given by us to Japan. The quid pro quo is vague and
uncertain. Moreover, it is difficult to see how you can be
authorised to bind this Government in relation to an arrangement
as to which we are not even suggested as parties.

It is so obviously essential to refer proposals back from time to
time to governments concerned and to suggest broadening of talks,
that reasonableness of this course should be so emphasised. An
interim arrangement with Japan would certainly help us, but
fundamental basis of such arrangement should be Kurusu's
suggestion in your 994.

I realise difficulty of your position because Commonwealth is not
a party to talks. But I am discussing position with Japanese
Minister here [11] tomorrow, and he will know of our keen
interest. It seems possible that from the talks of Kurusu-Hull may
emerge the suggestion of a conference of Pacific countries at
which governments concerned may be represented, but this will only
be practicable if some basis such as Kurusu's suggestion seems to
be acceptable to Japan and if the United States suggests such a
course. Above all, primary consideration is to prevent breakdown
of present talks. [12]

EVATT