VERY URGENT

Wool. We have received very strong representations from Consul-
General for Japan [1] that 300,000 bales of Australian wool be
made available for purchase by Japan during the period ending 30th
June 1940. Consul-General suggests that price be determined by
mutual agreement between Japan and Australia.

Consul-General, in personal discussions with Minister [2,]
emphasised following points
First There should be no discrimination as between Japan and other
neutral countries.

Second Japan would carry the wool in Japanese ships as is done
substantially in times of peace.

Third Japan would give any assurances required that wool would not
reach enemy countries.

Japan evincing great anxiety to secure wool and probably disturbed
at prospect of entire Australian clip being acquired by United
Kingdom Government. We realize the political significance of wool
in United Kingdom's relations with Japan and at the same time we
wish United Kingdom Government to realize the delicate situation
it may cause between Australia and Japan.

We trust United Kingdom Government will give the most careful
consideration to this matter, which we hope will be fully explored
between them and us before all details of acquisition arrangement
are completed. Yesterday proclamation issued prohibiting export of
wool. Japanese merchants now represent that they bought Australian
wool some time ago. They now desire to ship up to 2,000 bales to
Japan by 'Canberra Maru' sailing Friday September 15th. Australian
shipping agents assure Government that shipping arrangements were
concluded some time ago.

We desire you see British Minister concerned [3] and explain the
considerations mentioned herein and in separate telegram regarding
wool. [4] Desire you also secure United Kingdom Government's
acquiescence in our proposal that shipments by 'Canberra Maru' be
permitted. Essential reply last mentioned aspect reach us tomorrow
Thursday. [5]