§ Mr. Eden
I wish to make a further statement on the Far Eastern situation. In my statement on 25th July I informed the House that, although there was as yet no official news of the conclusion of a definite agreement between the Japanese and Vichy Governments, or the occupation of further bases by Japanese forces, it was quite evident that both these events were imminent. It is now known that the Vichy Government have acceded to Japanese demands for the occupation of two naval bases, Camranh Bay and Saigon, and eight air bases in South Indo-China, and that the occupation is already in progress. With the permission of the House, I propose to circulate in the OFFICIAL REPORT a full account of the developments which have led up to the present situation and of the action which His Majesty's Government took to avert it. Hon. Members will, however, wish to hear what measures are now being taken to meet the threat to our own territories which the Japanese action implies. The House will not expect me to describe in detail the defence measures which, as I announced on 25th July, have already been enforced in 1411 Malaya. In the economic sphere the counter measures taken by the United States and Netherland Governments and the Governments of the British Commonwealth of Nations are now, I think, well known from reports which have appeared in the Press. As soon as His Majesty's Government learnt of the decision of the United States Government to freeze all Japanese assets, arrangements were made for a parallel measure to come into force as regards the United Kingdom on 25th July. Similar steps have been taken or are being taken throughout the Dominions, India, Burma and the Colonial Empire, which thus present a united front. The effect is to stop all financial transactions on Japanese account, whether for financing trade or for other purposes, which are not licensed by the authorities of the United States, the Netherland East Indies and the British Commonwealth of Nations.
At the request of the Chinese Government, steps have similarly been taken to freeze all Chinese assets throughout the British Empire. The object of this is, of course, to prevent evasion, through parts of China occupied by the Japanese, of the effects of the order freezing Japanese sterling assets and also to enable assistance to be given to the Chinese economy by releasing such assets only for approved purposes. Steps have also been taken to withdraw ships' warrants from Japanese shipping lines.
I would also like to take this opportunity to announce that His Majesty's Ambassador at Tokyo, on behalf of the Government of India and Burma as well as of the United Kingdom, has given notification to the Japanese Government of the termination of the Anglo-Japanese Treaty of Commerce and Navigation of 1911, the Supplementary Convention of 1925, and the Conventions covering commercial relations between Japan, India and Burma. As a party to the 1911 Treaty, His Majesty's Government in Canada, and His Majesty's Government in New Zealand in respect of their own Trade Agreement with Japan, each made similar notifications to the Japanese Government.
Sir, it is a matter of regret to His Majesty's Government that their relations with Japan should have reached their present state, but the fault does 1412 not lie with His Majesty's Government. Japan complains of encirclement. Yet it is Japan herself, who, by successive acts of aggression, has drawn closer and closer together in self-defence the countries which lie in her path and whose territories and interests are ever more sharply threatened. I cannot believe that statesmanship in Japan is entirely dead or blind; and I sincerely trust that those responsible for the destinies of the Japanese Empire will reflect, while there is yet time, whither their present policy is leading them.
§ Mr. Noel-Baker
Will the Foreign Secretary instruct His Majesty's Ambassador in Tokyo to inform the Japanese Government that his statement to-day has the fullest support of all parties in the House of Commons? May I further ask whether we are right in understanding that the measures now being taken will effectively prevent the despatch of oil to Japan from companies under British, American and Dutch control?
§ Mr. Eden
As to the first part of my hon. Friend's Question, I will gladly do that. As to the second part, the position is that the steps we have taken give all the Governments concerned complete control of all financial transactions, including the financing of trade. Nothing can happen or proceed unless a licence is given. Naturally we shall act in this matter in the closest consultation with the other Governments interested, but I can say that the dominating principle which is to govern our own attitude in this matter in exercising the control will be the furtherance of our own war effort.
§ Sir William Davison
In view of the recent action by the Vichy Government, has it not now become quite clear that they desire the Germans rather than Britain to win this war?
§ Mr. Maxton
I have listened carefully to the interesting statement of the Foreign Secretary, and I will take time to consider it, but, in the meantime, I do not want the statement of the hon. Member for Derby (Mr. Noel-Baker) to be taken as speaking for me. I do not know under what mandate, either of the Labour party or of the Liberal party, he speaks and 1413 assures the Foreign Secretary that all parties in the House are supporting his statement. I should imagine that all parties in the House would like time to consider it first.
§ Sir Percy Harris
Is my right hon. Friend aware that the Liberal party is fully behind him in his statement, and that it represents the feelings of the bulk of Members in this House?
§ Mr. Pethick-Lawrence
I was not quite clear in regard to one passage of my right hon. Friend's statement. He said these licences were to be stopped unless they had the consent, and then he went on to say "of America, the British Empire and the Dutch." Do I understand that all three parties must countersign, or does my right hon. Friend mean each one of them respectively?
§ Mr. Mander
I have no doubt my right hon. Friend has seen the article in yesterday's "Times" indicating that oil will be permitted to be sent to Japan. Will he give an assurance that this attempted appeasement of Japan will not be permitted to go on?
§ Mr. Stephen
Does the right hon. Gentleman realise that the hon. Member for Derby (Mr. Noel-Baker) seems to have gone a bit wide?
Following is the statement:
The occupation by Japan of bases in South Indo-China is the continuation of a process which began last September, when the Japanese were granted certain military and air facilities, in North Indo-China, ostensibly for the purpose of their military campaign against China, There followed an agreement in May which assured to Japan a substantial portion of the products of Indo-China, including the major part of the rubber and rice and the entire output of iron, manganese, tungsten, tin, antimony and chrome. Meanwhile Japan imposed her own mediation in a territorial dispute between Indo-China and Thailand, and exacted, as the price of her guarantee of the settlement, certain vague undertakings which could be used as a pretext for further encroachments on the freedom of action of both countries at any moment. The ratification early in July of this settlement and of the commercial agreement between Japan and Indo-China synchronised with a report that Japan contemplated the acquisition of naval and air bases in South Indo-China and Thailand. His Majesty's Ambassador at Tokyo was at once instructed to inquire whether there was any truth in this report and to emphasise the seriousness of the situation which would in that case arise. Sir R. Craigie received a categorical denial of its accuracy on 5th July from the Vice-Minister for Foreign Affairs. The report persisted, however, and there followed a concerted Japanese Press campaign designed to show that Indo-China was threatened by. Great Britain. The House will be familiar with what followed. Demands, accompanied by threats were made on the Vichy Government about the middle of July and the reorganisation of the Japanese Cabinet merely had the effect of postponing their fulfilment.
On 25th July the new Japanese Minister for Foreign Affairs informed His Majesty's Ambassador at Tokyo of the agreement which had been reached and attempted to justify it on the ground of the alarming reports which had been circulating 1415 that the existence and security of Indo-China were endangered. The Minister for Foreign Affairs stated that the agreement with the Vichy Government was strictly of a defensive nature and not aimed at any third country and that the Japanese Government intended to observe strictly Japan's obligations regarding respect for the territorial integrity and sovereignty of Indo-China. If this step were misunderstood and measures were taken to oppose it, the matter would naturally be of concern to the relations between Japan and Britain, a development which the Japanese Government ardently wished to avoid. Sir R. Craigie at once pointed out in reply the action of the Japanese Government was in direct conflict with the categorical denial which the Vice-Minister for Foreign Affairs had given on 5th July and must produce the worst impression on the mind of His Majesty's Government. While the occupation of north Indo-China might be explained, though not justified, as part of the military campaign against China, this reason could not be given in the case of southern Indo-China. Sir R. Craigie referred to the frequent warnings which he had given to Admiral Toyoda's predecessor that the occupation of naval and air bases in Indo-China must necessarily constitute a potential threat against British territory and also to his various declarations to Mr. Matsuoka that reports appearing in the Japanese Press of aggressive intentions by Great Britain, or by Great Britain and China jointly, in regard to Indo-China or Thailand were entirely groundless. He then communicated to the Minister for Foreign Affairs the categorical denial of these allegations, which I myself gave in this House on 23rd July, and stated that so far as any British action was concerned our policy had been merely to maintain trade relations with Indo-China and our normal friendly relations with Thailand.
The Japanese Government on 26th July issued an official statement protesting the friendly nature of their agreement with the Vichy Government. By way of comment, I would only say that it is true that the Vichy Government have made a virtue of necessity, but even they must note with some disquiet the reiterated references in the official statement to the Greater East Asia sphere of co-prosperity 1416 —that latest euphemism for economic exploitation in the interests of Japan. The document also proclaims once more the intention of Japan to respect the territorial integrity and sovereignty of French Indo-China. On this point let the future speak for itself.