711.94/21789/18
Memorandum of Conversation, by the Chief of the Division of Far Eastern Affairs (Hamilton)
The Secretary telephoned at 6:15 this afternoon from White Sulphur Springs and in as much as Mr. Welles was not at that time in his office the Secretary talked to me. The Secretary said that he had received the papers which we had sent to him in regard to developments in the Far Eastern situation. The Secretary said that his preliminary thought after reading the documents was somewhat as follows: he thought that we should see what the new government formed in Japan22 has in mind toward keeping up policies of conquest and of association with Hitler in a program of world domination by force or toward changing its attitude and course to attitudes and courses of peace and of adjusting difficulties by means of peaceful settlements. He thought that upon the setting up of a new government in Tokyo we should ask Mr. Grew to endeavor to find out what the policy of the new government is. The Secretary thought that we should here make a similar approach to the Japanese Ambassador. The Secretary commented that we would wish to approach the Japanese Government with a view to obtaining clarification as to its policy in such a way as not to give offense or to be irritating to the Japanese.
If the information or indications which we should receive as to the new Japanese Cabinet’s policies and courses should be that the Japanese Government would carry out peaceful courses and rely on peaceful methods, then of course our attitude could be shaped accordingly. If the indications should be that the sum and substance of the Japanese position is to stay hooked up with Hitler’s program of conquest, such as would be indicated by Japan’s acquiring by force or threats of force military and naval bases in French Indochina, then the Secretary believed that we should develop a broad program designed to deter Japan and to place obstacles in the way of Japan’s program of conquest. The Secretary suggested that there might be included in such program the granting to China of a further substantial loan of $100,000,000 or $200,000,000. The Secretary mentioned that we might care also to consider granting a loan to France if French Indochina should decide to resist Japan’s demands for acquisition of naval and military bases.23 As further steps in such a program, the Secretary thought that the civil agencies of the Government should work out concrete measures, the results of which would be to impose economic, [Page 326] financial and other restrictions upon Japan. The Secretary believed also that thought should be given by the Navy and Army authorities as to what measures might be taken by them in any such program. The Secretary expressed the view that such a program would be characterized by a general tightening up but always short of becoming involved in war with Japan. He manifested his view that the Far Eastern situation should be viewed in its relation to the world situation and to our policy of extending all possible aid to Great Britain.
The Secretary said that with reference to cooperating with the British in the Pacific situation, he thought that we should tell the British that we were prepared to do all that we could in the way of cooperating with them consistent with our primary purpose of assisting the British in the Atlantic.
During our conversation, I made the comment to the Secretary that I was not certain in my own mind as to the advisability of this Government’s, in the event that Japan should acquire military and naval bases in French Indochina, forthwith instituting a program of drastic economic and other restrictive measures against Japan. I said that if there was any doubt in the Japanese official mind as to whether Japan should go against Siberia or against the Dutch East Indies and Malaya, it seemed to me that it would be decidedly preferable that Japan go northward rather than southward and that it would not be to our interests to take action which might influence Japan to go southward rather than northward. The Secretary stated that he was inclined to think that Japan’s main attention was centered southward and that any action Japan might take against Siberia would be only after the collapse of Soviet resistance, should that occur, when Japan would simply pick up the pieces preparatory to embarking on a southward movement.
The Secretary said that these were merely his initial impressions.
Just as the Secretary was concluding his talk with me, Mr. Welles returned to his office and the Secretary was transferred from me to Mr. Welles