AUSTRALIAN FOREIGN POLICY
Continuing my Note of 25th-29th May [2], shortly after the closure
of which I heard a Japanese Foreign Office reaction to the
Commonwealth foreign policy statement of the Right Honourable the
Prime Minister and the Honourable the Minister for External
Affairs [3], I cabled you on the evening of 29th May as follows:

'My telegram 17th May [4] and others; learn that Japanese Foreign
Office much appreciates statement as to Australian foreign
policy'. [5]

This Japanese official appreciation was stated by the Foreign
Office Spokesman, in a normal way, to a foreign Press
correspondent last evening and may therefore be regarded as
practically public whilst yet it has not been so promulgated
within Japan in that way up to the present. I have not received
anything of a personally stated nature from any particularly
senior Japanese official source, but an official of the European-
Asiatic Bureau who called to see me in a courtesy way mentioned
that he and his colleagues were very pleased about it and I have
no doubt that such is the case throughout the Foreign Office
generally.

It may be appropriate to mention also, in this connection
generally, that they indicate lively interest in the Commonwealth
Government's statement of intention regarding the early
establishment of a Legation in Tokyo, a move they have sought for
the last ten years.

Any tardiness in reaction or hesitancy to openly acknowledge the
Commonwealth Government's enunciation of its policy towards Japan
is, as the days go on, more and more attachable to the extreme
reserve being shown towards foreign affairs in the connection to
which reference was made in my preceding Memorandum. In fact it is
now learned, in rather a roundabout way but none the less
circumstantially, that the so-called 'young Army element' whose
mouthpieces in Europe are the Japanese Ambassadors to Rome [6] and
Berlin [7], strongly desired outright military alliance with Italy
and Germany and that this was only avoided by the Foreign Minister
[8] threatening to resign if it were brought about. Thus there has
been and continues to be an atmosphere of strain from within which
any clear cut statement could only with difficulty-not to mention
extreme danger to perhaps more than one Minister-emerge.

Other and more local events centering round Hong Kong and Amoy, as
already described, have continued to develop and the Japanese
Government which, it is reasonably clear, does not now wish to
seriously quarrel with the British Empire or the United States, is
in the position of meeting upon the one hand the more cautious
ideas of the entities which would like to see as uncomplicated a
solution as possible, and upon the other the 'All in' ideas of the
group which thinks only of extended war as the Japanese means of
further procedure even to involvement vis-a-vis European affairs.

This latter view is, further, quite openly favoured by some
sections of the vernacular Press which advocates a straight out
Japanese-German-Italian military alliance, an advocacy which is
also echoed by certain industrial leaders who are consistently
noted for their 'fire-eating' tendencies.

It is to be added, in relation to the Foreign Minister's reported
stand as already mentioned, that his determination (so it is
learned) led in turn to resignation threats by the interested
Japanese Ambassadors whose withdrawal from their posts was only
with difficulty prevented as a means of avoiding, presumably, a
particularly serious crisis as between the military and civil
elements. The situation therefore appears to be that the Japanese
Foreign Office, which alone really sees the whole international
picture, is in somewhat of a minority (yet a not unimportant one
upon the present face of the matter) in a situation of this kind,
but the financial aspect is now a little better understood by the
Army and Navy than it used to be and so the Government proceeds in
an atmosphere which carries clouds of considerable magnitude upon
the Japanese horizon in every direction.

LONGFIELD LLOYD

Later: 31st May:

In completion of the series of telegrams touching upon local
reaction to the general subject matter of this and the preceding
Note, I included in a telegram despatched to you this day, the
following:

'My telegram 29th May; various Foreign Office officials personally
mention their pleasure at projected Australian Legation.' ... [9]

The other portion of the message referred to a 'Japan Chronicle'
sub-leader in appreciation of the Commonwealth Government's
handling of the scrap and pig iron loading difficulty, principally
at Port Kembla; and a copy of the article is attached for your
information.

I may say that the mention, by Foreign Office officials, of their
pleasure at the Commonwealth Government's statement concerning
establishment of an Australian Legation (to which reference is
made in the earlier portion of the present Memorandum) although
personal in the sense that several of those whom I know very well
spoke about it in conversation with me, their remarks may be taken
as reflecting the official Japanese reaction to the idea.

L. L[LOYD]