The Cabinet yesterday cunsed the situation arising from fusal of Mr. Ramsay MacDonald to accept Japan's 70 per cent, demand in preliminary negotiations conduct ed with Ambassador Matsudai Admiral Takarabe, Navy Minister, reporting on the situation, told his colleagues that Japan cannot cede to any extent on this demand. He further urged that instructions should be sent to Mr. Matsudaira to continue his preliminary negotintions with the British Government. in an effort to rench understanding. of the demand.
"We must reach a satisfactory understanding in preliminary nogotiations," the Navy Minister is reported to have said. "otherwise Japan cannot hope to realize its Purpose at the main conference.
"In case the proliminafy negotia-tices fail, Japan will have to take a second step, but such a step would be resorted to only after all available mealls are exhausted in the
Text read from the printed page and cleaned; old type leaves the occasional error.