SEVERE BLOW

Auckland Star, Volume LXXII, Issue 177, 29 July 1941, Page 7

SEVERE BLOW

DUTCH - TRADE BAN Essential Supplies Cut Oft" From Japan r.p.A. aivi Bnt!sii Rec. 1.30 p.m. LONDON. July 2S. The Japanese Finance Ministry has applied the credit '"feezing refutations to Britain and Northern Ireland in retaliation for the freezing of Japanese assets. A Ratavia message saws the economic sanctions also apply to China. Dutch officials point out. however. that this does not include the consignment of goods via the Burma Road or any other route whereby free China i> assured of receiving them. Well-informed observers in the East Indies anticipate that Japan will probably endeavour to cheapen the effect of the sanctions, but they are regarded as a great economic blow, not only cutting off tin, rubber, vegetable fats and quinine, but also irreplacable trade. During the period January to April last the East Indies imported £5,000.000 worth of Japanese goods, compared with £5,250,000 in the same period last year, .and exported £2.052,000 worth to Japan in the first four months of this year, compared with £'2.(."3,000 in the corresponding period of last year. Treasury directions issued by the Brit'sh Government, blocking' sterling balances and other assets of persons resident in China come into operation to-morrow. General authority is given for any payments in the sterling area authorised on behalf of the Chinese Government, as well as for payments necessary for the fulfilment of certain outstanding transactions. Japanese "Closely Watching" The Domei news agency says the Japanese Consul at Batavia has informed the Japanese Foreign Office that the Bank of Java has notified the Yokohama Specie Bank that the Netherlands Indies Government is abrogating the financial agreement between Japan and t"e Indies, which would have an important effect on trade between Japan and the Indies, and therefore the Japanese Foreign Office is closely watching developments. From Hsinking, the Domei agenc\ said it was announced officially that Manchukuo had frozen American and British assets. The Japanese Ministry of Financehas announced that the freezing order against United States assets is to be eased as much as possible, depending upon the severity with which the United States applies its own freezing order against Japan. President's Roosevelt's swift action shocked and surprised even the Japanese Government, which, although it had taken precautionary measures, had been rather hopefully relying on Mr. Matsuoka's past assurances of America's passivity- and on the influence of American isolationists. The seal will be set on the new agreement between Japan and Vichy to<lay, when it will be ratified at an extraordinary session of the Japanese Privy Council in Tokio. The Emperor will be present.