My telegram No. 96 17th April (British-Japanese Civilian
Exchange). [1]

The Japanese Government have replied that they cannot accept the
new proposal of His Majesty's Governments.

2. We greatly regret having to re-open with the Commonwealth
Government the question of the 331 Japanese Merchant Seamen in
Australia but we are now faced with the prospect of a complete and
final breakdown of these negotiations and moreover with the
virtual impossibility of arranging any further exchanges of
civilians with the Japanese at all since it is most unlikely that
Japanese Government would agree to any fresh negotiations before
this difficulty is cleared out of the way. We recognise that the
Commonwealth Government's decision [2] was based on exhaustive
consultation with Military and Security Authorities so we hope
that the Commonwealth Government may now feel disposed to
reconsider decision in light of recent favourable developments in
Military situation. It is suggested that risks involved in return
to the Japanese of these seamen may no longer be so grave in view
of considerable progress which has been achieved in driving the
Japanese back in South Pacific.

3. Complete breakdown of negotiations would in our opinion have
following serious effects:-

(A) Widespread public disappointment and criticism in the United
Kingdom and presumably in the other parts of the British
Commonwealth. The United Kingdom public are already complaining
that Americans have secured two civilian exchanges with Japan
while the British have only secured one.

(B) Intensification of feeling referred to at (A) in the event of
Americans achieving third exchange (which they have already
proposed to the Japanese Government) and
(C) Subsequently realising their avowed intention of repatriating
all remaining American civilians in the Far East serious prejudice
to the prospect of sending supplies of medicines, food and
clothing to British and Allied Prisoners of War and civilian
internees in the Far East especially those in the Southern Area
whose minimum requirements will not be met even if all proposals
put forward by His Majesty's Government and the United States
Government for establishing supply routes to the Far East are
accepted by the Japanese Government.

(D) From the standpoint of (C) above unfortunate reaction in
U.S.A. particularly in State Department and American Red Cross
circles. State Department have already expressed their interest in
this second British exchange and their concern over its delay.

This can be understood since at Conference in Washington last year
between British, Canadian and American Red Cross Societies
agreement was reached for the pooling (as between British
Commonwealth and U.S.A.) of all arrangements for the despatch of
relief supplies to the Far East and such supplies are to be
carried equally by British and American exchange ships.

(E) Further deterioration of the situation in Hong Kong where
shortage of food is critical and morale affected owing to
prolonged delay in effecting the second civilian exchange. It will
be recalled that this situation formed the subject of Mr. Curtin's
telegram No.1 4th January to the Canadian Government. [3]

(F) Finally (and perhaps most important) grave and perhaps
hopeless outlook for all British Commonwealth civilians in the Far
East since with the approach of the war closer to Japan material
conditions for British Commonwealth Prisoners and Internees are
bound to deteriorate. This is already evident for instance in
Germany.

4. The United Kingdom Government therefore feel justified in
asking the Commonwealth Government whether on all these grounds
and particularly in view of the greatly improved military
situation in the South-West Pacific Area they would now be
prepared to waive their objection to the repatriation of the 331
Japanese Seamen.