Foreign Relations of the United States Diplomatic Papers, 1939, The Far East, Volume III

762.94/360: Telegram

The Ambassador in France (Bullitt) to the Secretary of State

Paris, May 23, 1939—5 p.m.
[Received May 23—4:32 p.m.]

994. The Chief of the Far Eastern Division at the Foreign Office read to us this morning a telegram received on May 21 from the French Ambassador at Tokyo reporting that the Japanese Government had definitely decided not to enter into a military alliance with the Axis Powers. The Ambassador reported that on either May 11 or 12 Hiranuma and Arita, incensed at the attitude of the Extremists, had tendered their resignation[s] to the Emperor. The Emperor had refused the resignations and had requested them to remain in office and to continue their policy.

On May 15 the Ambassador under instructions from Paris had called on the Vice Minister for Foreign Affairs and had referred to reports published in Japan that the Franco-British negotiations with Soviet Russia envisaged action in the East. The Ambassador denied these reports, stating that the arrangements under negotiation with Russia contemplated action only in the west. He added that the reason for this was that it was inconceivable to the French Government that it could ever go to war against Japan. At the same time he took occasion to refer to reports that Japan was considering a military alliance with Germany and Italy and stated that of course if such an allegiance [alliance?] should be concluded this would mean that Japan might go to war against France and therefore the French Government would be obliged to reconsider its views regarding the Soviet arrangement. The Ambassador reported that the Japanese Foreign Office had given publicity to only the first part of his statement of May 15 which had produced an excellent effect. The second part of his statement had not been given publicity but had undoubtedly influenced the Japanese Government in its decision not to enter the military alliance. The Ambassador concluded by reporting his conviction that for the time being at least there would be no question of a military alliance or of a Cabinet crisis.

Reference my 976, May 20, 2 p.m.⁴⁰ Chauvel said that yesterday the Foreign Office had instructed the French Ambassador in Tokyo to send a brief note to the Japanese Government referring to the International Settlement of Shanghai.

The note would point out that the French Government because of the fact that it was represented by the French Consul on the governing body of the International Settlement was interested in the status of the International Settlement and of course could not disinterest itself in any proposed changes affecting the Settlement. The note would then invite attention to the recent American aide-mémoire⁴¹ and state that the French Government associated itself with the point of view expressed therein.

Reference my 874, May 3, 5 p.m.,⁴² last paragraph. Chauvel said that the French Government had been informed by the British Government that the latter considered it inopportune at present to go forward with the idea of embargoing iron ore exports from British and French Far Eastern possessions to Japan.

The British Government had stated that perhaps at some later time this proposal could be considered in connection with some comprehensive plan to bring pressure to bear upon Japan if such a plan should seem advisable. Chauvel said that the French Government therefore had decided to remove the embargo on the export of iron ore from French Indo-China to Japan. This would not be done immediately because the French Government was using the embargo as a bargaining point in an effort to conclude the negotiations with Japan for a commercial agreement.

Referring to the requests made of the French Government in the aide-mémoire presented by the Chinese Ambassador on April 13 (see my 766, April 18, 2 p.m.⁴³), Chauvel stated the following: (1) a group of French banks is prepared to extend a loan to support the Chinese currency subject to receiving a guarantee from the French Treasury. The matter is now in Reynaud’s⁴⁴ hands. (Reynaud told me last night that the French Government had decided to guarantee this loan to the amount of 200,000,000 francs); (2) the competent French technical services have reported favorably a proposal to extend export credit guarantees to cover the purchase of railway equipment in particular for the construction of a railway between Yunnan and Chungking (the amount involved is about 300,000,000 francs); (3) the French Government has gone further than requested by the Chinese Government in that it has removed entirely the transit duties on supplies of material destined for the Chinese Government passing through Indo-China.

Bullitt

40. Vol. iv, p. 56.
41. Dated May 17, Foreign Relations, Japan, 1931–1941, vol. i, p. 842.
42. Post, p. 534.
43. Post, p. 665.
44. Paul Reynaud, French Minister of Finance.