811.20 (D) Regulations/963
Memorandum of Conversation, by the Assistant Secretary of State (Berle)
The Japanese Chargé92 came in to see me at his request. The conversation, as will be seen, took a wide range.
He took as his text the problem of machine tools, pointing out, however, that he did not come to discuss the cases as specifically as he had done before, but to make some general observations. He referred [Page 621] to our recent note93 which, in the view of his Government, did not meet any of their fundamental points. He observed that a number of classes of machine tools had been denied exportation, although the regulations did not include them as subject to license. On November 25th [27th] instructions had been issued to the Collectors of Customs which were perfectly clear. They permitted the exportation of any machine tools loaded prior to December 10. Japanese exporters of these tools had made strenuous endeavors to load these tools prior to that date; but not a single shipment had got out. In one case, the manufacturer had declined to load them because it meant night work, and had given as an excuse the fact that night loading was not permitted by local ordinance. In other cases licenses had been requested for categories not covered by the regulations. In general, he considered that the operation of the export control had been such as to make impossible the shipment of any of these machine tools irrespective of the strict legal situation.
He observed that this situation violated the precise contentions which the United States had consistently set up in dealing with Japan. We had asserted in our note that the measures taken were those of national defense. This was precisely what the Japanese Government had pointed out when we complained of restrictions in China, yet we had declined to accept that contention.
We had insisted upon equal treatment for American merchants, yet the Japanese Government was constrained to believe that there was no desire to grant equal treatment to the Japanese. In this respect Mr. Morishima observed that Japanese exporters who had been unable to export machine tools had been forced to sell them back to the manufacturers; that he had information indicating that some of these tools were subsequently sold to the Soviet Government, which thereupon was able to obtain export licenses for them.
As a third point, he stated that the United States had contended that the Japanese were closing markets to American merchants in China; yet the effect of our Export Control Administration was doing precisely the same thing in the United States.
Fourth, he noted that we had protested against regulation by military authorities in China, and had insisted that the Government in Tokyo must be responsible. Yet in our note we had pointed out that the operation of the export control license machinery was solely in the hands of the Administrator of Export Control—associated with the defense commission—that is, that we were insisting upon the power of our defense authority to do exactly what the Japanese military authorities had done in China.
[Page 622]He observed that Japan was endeavoring to settle the outstanding grievances of this kind with Americans. He recognized that there was a “fundamental question” which remained open and apparently was not susceptible of settlement at this time. But the individual questions of trade, etc. were on the way to settlement as a result of Ambassador Grew’s talks with the Foreign Minister. The chief of the American Division of the Japanese Foreign Office, Mr. Teresaki, was being sent to China to try to clear up the problem. Admiral Nomura94 prior to coming here had gone to China to visit Peiping, Shanghai and other places, so that he could consult and know the situation on the ground. He pointed out that while they were endeavoring to solve these questions, we apparently were making greater difficulties here.
He expressed the hope that something could be done about some of these things, but his main purpose was to lodge a protest. The exporters who had bought machine tools and found themselves without licenses in most instances had found that the goods could not be resold and were not wanted at all. They felt that they were entitled to compensation of some sort.
I took note of what he said and observed that since he had been frank in his statements, I thought it might serve some purpose if we were equally frank.
I said that we had never abandoned the American hope for unrestricted trade and respect for the rights and interests of other countries. We did consider our national defense as paramount. In this connection, I said it was not unnatural that the Defense Commission and the Export Control authorities should take note of the apparent state of affairs prevailing between the two countries. There had been talk of war in the Japanese press, and officials had echoed statements of this kind. We had been forced to take this seriously to the point of withdrawing as many of our nationals as we could from the area of possible trouble.95 It would be normal to expect, in view of this situation, the most careful scrutiny of Japanese orders. Should hostilities break out between the two countries—a contingency which every right-minded person hopes will never occur—plainly a greater degree of care would be involved. In this respect, I said, the Chargé would permit me to observe, that we had reason to believe that much of this talk was stimulated by a third nation, Germany, which so far as we were able to see had very little interest in the welfare of Japan, or in the welfare of the United States.
[Page 623]With reference to the rule of equal treatment, I observed that we stood for and continued to stand for the rule of equal treatment—always subject to the paramount right of a country to its national defense. The Chargé had mentioned the fact that other countries might receive different treatment. I was not informed as to any treatment received by the Soviet Government, but I would look into the facts. My impression was that some 57 percent of the Japanese export licenses had been granted.
Mr. Morishima said he had understood that some 75 percent of the Russian licenses had been granted. I said that he could be assured that we were not endeavoring to operate the license control so as [to] favor Japan against Russia or Russia against Japan in a tense situation.
Mr. Morishima observed that machine tools were going forward to England.
I said that in the pursuit of our national defense we had reached the conclusion that the successful defense of England was essential to our own safety. This fact necessarily entered into arrangements which were made. The dominant motive in this case was not to discriminate against any country, but to protect the obvious interests and safety of the United States.
As to his third point—that Japanese were being thrown out of American markets, as we complained that Americans were being thrown out of Japanese markets—I said that I could not accept the contention. The license control had been imposed on certain materials involved in national defense. The great bulk of the Japanese merchants and business remained intact. There was no similarity between the two cases. I myself had spent considerable time in endeavoring, when the commercial treaty was abrogated, to assure that the result of it would not be the immediate penalization of Japanese merchants here; and that there could be no similarity to the occasional license restrictions here imposed and the detailed interference with American business in China, running all the way to refusal to permit passage of a man from his home to his business to denial of permission to transport his necessary goods.
I said that I wished to consider further the plight of the Japanese exporters who had machine tools which could not be exported and likewise could not be sold.
I said that I shared with the Chargé the hope that these vexatious questions could be settled, though obviously they could not be wholly disconnected from what he had rightly called the “fundamental question”. As to that I thought Secretary Hull had made the American position abundantly plain. He hoped for a time when mere force politics would not dominate the scene with the attendant diplomatic [Page 624] marching and counter-marching; when commerce could run free of restrictions, and finance could be cooperative, and when the various peoples could attend to their chief business, which was providing an orderly and prosperous peaceable life.
The Chargé took occasion to say that Admiral Nomura would probably leave Japan on January 23; that he would probably arrive in San Francisco on or about February 8, and that by the middle of February he would be in Washington.
I said that we should be glad to see him.
Mr. Morishima appeared under considerable stress throughout the conversation, though he was, as always, friendly and considerate in his attitude. I surmised that he had had a fairly stiff cable from Tokyo.