Dominions office D.50 of 21st January, D.288 of 25th March, D.351
of 9th April: New Zealand's 164 to Washington, 56 to London of
19th March: our 362 to Washington, 81 to New Zealand, 77 to
Dominions Office of 27th March.

1. The question of resumption of private trading with Japan
involves the whole question of Japanese commercial relations which
is obviously a major item in the settlement with Japan. It should
not therefore be treated as a mere matter of occupation policy;

still less should it be a matter for unilateral decision by one
power, even after consultation with F.E.C. We consider therefore
that this important question should not be settled in F.E.C. at
all, and that arrangements for Japanese Peace Conference should be
pressed on with a view to this and other major matters being
determined there by the Governments concerned.

2. We have been increasingly concerned at the tendency to piece-
meal disposal of questions of major international importance in
relation to Japan, for example:

Reparations-Advanced reparations allocations and allocation of
industrial facilities.

Proposed Philippine Trade Agreement with Japan. American proposal
to finance Japanese imports. (See F.E.C. Telegram No. 77). [1]

3. We have also been concerned to note tendency to unilateral
decision on important matters affecting the settlement with Japan,
for example:

Whaling.

Resumption of civil aviation from United States to Japan on May
1st by NorthWest Airlines.

The re-opening of postal services to Japan.

United States refusal of further Allied representation on the
Holding Companies Liquidation Commission.

4. We therefore wish you to speak strongly in F.E.C. to the above
effect, stressing our view that the resumption of foreign
commercial contacts on a permanent basis is not a matter of
occupation policy, and should not be decided in advance of Peace
Settlement, especially now in view of the likelihood of an early
peace conference.

5. As regards preparations by private firms, certain private
traders (e.g. Americans, and neutrals who have been in Japan
continuously since the outbreak of war) are enjoying the
advantages in regard to establishing contacts, arranging
accommodation, recruiting staff, and generally making preparations
and laying foundations for trade with Japanese. We are anxious to
secure that nationals of all members of F.E.C. should be given
similar opportunities. We are, of course, especially concerned
that Australian Traders should not be at a disadvantage in this
respect. S.C.A.P. had indicated to the Head of the U.K.L.M. [2]
that he would wish all traders to start with equal opportunity,
but that the removal of the ban on entry into Japan of business
men was a matter for directive from Washington. (See D351, para
2.)
6. We therefore wish you, in consultation with other British
Commonwealth Representatives, to present a short paper in F.E.C.

on the admission to Japan of private traders for the sole purpose
of making preparations necessary for the future conduct of their
businesses, when private trading is resumed. In presenting paper
it should be made absolutely clear that it is concerned only with
preparations for resumption of private trade and that the question
of resumption, including date and conditions, is one for the Peace
Conference.

7. Provisions in paper should cover
(a) Equal opportunity for all allied traders.

(b) Impartial allocation of accommodation.

(c) Opportunities for all branches of trade including banking,
insurance, shipping, airlines, etc.

(d) Traders be authorised to deal direct with individual firms and
not necessarily through Japanese Board of Trade (Boeki Cho).

(e) No encouragement to be given to reciprocity with Japanese
business representatives.