694.1115/32
The Adviser on International Economic Affairs (Feis) to the Financial Counselor of the British Embassy (Stopford)
My Dear Mr. Stopford: Thank you for your letter of November 11, 1940 enclosing a copy of the message from London regarding the financing of Japanese trade.82
With reference to the attitude of this Government in respect of the financing of American trade with Japan, the Department of Commerce, as your Government is doubtless aware, on June 6, 1938 advised exporters to have a confirmed, irrevocable letter of credit in their hands before accepting orders for shipments to Japan. Moreover, in the light of the fact that Japanese military activities in China have resulted and are continuing to result in serious injury to American rights and interests, it has been the hope of this Government that American financial institutions and American sellers of commodities would, on their own initiative and taking into account the credit risk involved, not take any action which would facilitate, either directly or indirectly, Japanese activities. This Government [Page 617] regards the extension of credit to Japan as coming within that category of action, and accordingly this Government, when inquiry has been made of it, has endeavored to discourage the extension of credit to Japan or for the use of Japan in China.
So far as the Department is aware, there have been no substantial deviations by American financial institutions and American sellers of commodities from the policy desired by the Department. To the extent that the Department has had notice of the matter, credits which American banks have extended would appear to have been fully secured, short-term commercial credits, or credits to the agencies of Japanese banks in this country, secured by collateral which these agencies have supplied.
Sincerely yours,