793.94/11462: Telegram
The Ambassador in Japan (Grew) to the Secretary of State
[Received December 4—4 p.m.]
596. 1. My British colleague proposes to cable his Government along the following lines: Japan is clearly beginning to feel the need of foreign capital for requirements in China, in Manchuria and at home; Japanese industrialists are now approaching American financial interests, notably through Aikawa of Nippon Sang Yo. The prolongation of hostilities would be encouraged by any success in obtaining such credits in England, France or the United States while at the same time our chances of exercising moderating influence in the final settlement would be diminished. On the other hand, an important factor in keeping responsible Japanese industrial and financial circles anxious for our good will is the hope of obtaining economic assistance after the settlement. The cause of a favorable settlement would therefore be served if an identical line with regard to Japanese requests for financial assistance in any form could be taken by the three Governments concerned. The best answer to any such approaches is to reply that everything must depend upon the terms of peace.
2. Craigie has written me privately and confidentially asking whether I would consider sending a telegram to my Government along [Page 760] similar lines. I have told him orally of the position of our Government concerning foreign loans and the difficulty of legally controlling their issuance. Furthermore, I have pointed out the inherent weakness of his proposal, namely that if we were to make economic assistance conditional upon favorable terms of peace and if favorable terms were then granted, we would, at least by implication, have committed ourselves to rendering such assistance. I indicated my belief that the American Government would not be willing to take such a position. I also expressed my doubt as to whether American financial interests would be disposed to provide capital for Japan under present conditions.79
- On December 7 the Ambassador reported that the French Ambassador had cabled his Government in general agreement with his British colleague (793.94/11501).↩