793.94/14902: Telegram
The Ambassador in France (Bullitt) to the Secretary of State
[Received April 18—2:23 p.m.]
770. I asked Léger this afternoon if he had replied to the memorandum presented to him on April 4th by the Chinese Ambassador (referred to in my 765, April 18, 1 p.m.). He replied that he had as yet given no answer to the Chinese Ambassador but that the British Government had replied last night to the similar démarche made by the Chinese Ambassador in London.
The British had said that they would be unwilling to enter into any agreement now with the Chinese Government based on the hypothesis that if Great Britain should become involved in war in Europe Japan would attempt to seize British possessions in the Far East. The British Government had stated further to the Chinese that they had hopes that the presence of the American Fleet in the Pacific might prevent a Japanese attack on British possessions in the Far East.
In case Japan should attack British possessions in the Far East and in case no assistance from the United States should be forthcoming, the British Government had decided that they could bring no assistance to their possessions in the Far East until the successful conclusion of war in Europe.
Léger went on to say that the French reply to the Chinese Government would be along the same lines. I then suggested to him that it was most unfair for the French Government to continue to place a [Page 529] transit tax of 4% on goods destined for the Chinese Government in transit through French Indo-China. (See my 766, April 18, 2 p.m.)95 He agreed this was stiff; but added that the justification for it was that Indo-China was compelled at the moment to rely on its own revenues for its defense.
Léger added that the French Government had cut off all deliveries of iron from French Indo-China to Japan after the seizure of the Spratley Islands by Japan.96 This measure was proving to be ruinous to the finances of Indo-China and to the welfare of the local population. Moreover, the Japanese were obtaining the iron they needed from British possessions in the Malay Penninsula.
The French Government therefore had proposed to the British Government that this source of supply to Japan should be cut off. The British Government had replied that this could be done easily by raising the export tax on this iron but had added that it could see no utility in cutting off exports of iron from these French and British possessions so long as Japan could obtain all the supplies of iron she might need from the United States.
Léger said that he had been informed that the British Government was about to ask the Government of the United States if something could not be done to cut off supplies of iron from the United States to Japan.
We then had some discussion of the problem of bringing pressure to bear on Japan, Germany and Italy by buying through joint action by the French, British and American Governments certain essential war materials. I venture to suggest that this question is worth studying.