761.94/1249: Telegram
The Ambassador in the Soviet Union (Steinhardt) to the Secretary of State
[Received 9 p.m.]
1786. In the course of a conversation with the Japanese Ambassador this morning, he told me that his negotiations with the Soviet Government looking towards a political convention were “at a standstill”. He said that Molotov’s suggestion (see my 1638, November 28, 7 p.m.) that Japan cede the lower half of Sakhalin had made Matsuoka “very angry” and that Matsuoka had instructed him to tell Molotov that Japan was prepared “to purchase” the northern half of Sakhalin, which Molotov had described as “rude”. He said that notwithstanding the impasse which had caused a “temporary suspension” of the negotiations for a political agreement, he was in daily contact with the Soviet authorities on the subject of the fisheries convention and that Molotov had suggested to him yesterday an 8-year fisheries convention to take the place of the customary annual modus vivendi which expires in January. He said he was also endeavoring to negotiate an agreement concerning trans-Siberian freight rates, as in the absence of a commercial convention with the Soviet Union the rates assessed against Japanese merchandise in transit to Germany were “grossly excessive”.
In conclusion the Ambassador observed that Matsuoka had decided to take a “strong stand” in his political negotiations with the Soviet Government, as he considered it inadvisable at the present time to exhibit any “weakness”.