747.94/39
Memorandum of Conversation, by the Under Secretary of State (Welles)
The Australian Minister called to see me this morning. The Minister gave me to read a telegram from his Government which stated that the Japanese Consul General in Canberra had called yesterday upon the Minister for External Affairs and had complained, (1) about the unwillingness of the Australian authorities to transfer to London 400,000 pounds of Japanese deposits in Australia; (2) about a permit for Japanese trade missions to visit Papua and certain other islands under Australian jurisdiction; (3) because of the imposition by the Australian authorities of an embargo on scrap iron which apparently was not imposed for economic reasons but rather as an indication of solidarity with British Empire and United States policies; and, finally, because of the unwillingness of the Australian Government to give any assurance that Japan would be able to continue to purchase Australian wool. The Japanese Consul General concluded his representations by stating that if an adjustment of these complaints was not found, and if Japan was forced to the conclusion that they were intended to be deliberately unfriendly, that Japan would “accept the challenge”.
In a further telegram received by the Minister from his Government, the Minister for External Affairs took the position that he was in agreement with the views expressed by Secretary Hull to Minister [Page 232] Casey some days ago opposing “a policy of pin pricks” which would not result in any real deterrent to Japan in any possible war preparations and which would merely result in irritation on the part of the Japanese Government.66
Mr. Casey expressed, as his personal view, that Australia was not able to pursue a policy of economic sanctions against Japan with the same impunity as the United States. He regarded it as unwise of Australia to continue a policy of this character which “brought the wrath of Japan” down upon Australia without any resultant benefits to Australia therefrom. He said he believed that it would be desirable that a clarification of this general question be undertaken by the United States, British, and Australian Governments. I said that an exchange of views between Lord Lothian, as soon as he is well, the Department, and the Minister would be helpful so that all aspects of this question might be explored. I said that I need not reiterate to him the policy of this Government at this moment with regard to the Far Eastern situation, since that had been fully expounded to him by Secretary Hull only a few days ago.
The Minister told me that he suggested to Admiral Stark last night the desirability of sending a couple of American destroyers to Australian waters in order that the commanding officers might investigate certain passages and undertake certain soundings for themselves, since he believed that personal inspection by American naval officers of this character would be exceedingly useful in the practical sense in the event of trouble in the Pacific Ocean later on. He told me that Admiral Stark indicated he would consult with the Department of State with regard to this suggestion after he had consulted with his own War Plans Board.