Throughout the 1930s the Reef in the north was a scene of ongoing conflict with Japanese workers who had resumed aggressive resource stripping in the pearling industry, practices that had been arousing antagonism in Queensland ever since the 1880s. Tension in Australia was rising, evident in continuing denunciation of their impact in both the parliament and the press, exacerbated by a heightened fear which had been building up for decades. Japan's aggressive moves to gain military and economic hegemony over Asia, now combined with the growing threat of a rearming Nazi Germany, was creating alarm in Australia over what seemed an inevitable drift to war.

Hostility over Japanese depredation of Reef marine resources and towards Asian immigration had been of much longer standing. When the Immigration Restriction Act of 1901 implementing the ‘White Australia Policy’ was passed by the first federal government, although persons engaged in the pearlshell and bêche-de-mer industries were exempted, allowing access to Japanese divers, its provisions continued as a serious irritant. Even though Japanese citizens were not permitted to emigrate, and Japan itself opposed all foreign immigration – an effectively racist policy – the Act of 1901 was seen as an affront to national prestige and Japan's standing as an international power (Sissons 1972:193f.). Despite such objections, Australian hostility over access to Reef resources persisted.