Foreign Relations of the United States Diplomatic Papers, 1941, The Far East, Volume IV

711.94/200510/14

The Postmaster General (Walker) to the Secretary of State ⁵⁰

[New York,] March 17, 1941.

Preliminary Draft of “Agreement in Principle”

Preamble.

1. The Governments of the United States and of Japan jointly acknowledge each other as equally Sovereign States and contiguous Pacific Powers.

They affirm that the recent deterioration of amicable relations and the antagonism of policies in action have been developed to their mutual regret.

2. Having explored deeply, with amicable intent, the sources of clashing purposes, and having resolved upon an “agreement in principle,” herein enunciated, the Governments of Japan and of the United States, in a spirit of high resolve, and invoking Divine aid for the foundation of a firm peace in the Pacific and the inauguration of a new era of respectful confidence and cooperation between our peace-loving and industrious peoples, declare, of their spontaneous free-will, the unanimity of their acceptance and application of principles and procedures described herewith and conceived by both as inseparable from the maintenance of a just order, a legitimate freedom and a desirable economic and cultural existence.

3. The Governments of the United States and of Japan recognize that the diversity of cultural, and consequent political and social, forms prevailing among advanced nations, is founded on the inescapable differences of natural endowment and physical circumstance which eliminate the possibility of mathematical and mechanical identity in social expression and development among nations. They acknowledge that only a perverted will can distort, as an incitement to conflict and a foment to emotional suspicion and fear, this natural diversity which, when properly appreciated and encouraged, is one of nature’s gifts for creative human and international progress. They believe that the living waters of the wells of human life, while differently contained and reflecting lights and shadows appropriate to their multiple placements, must be kept pure and freshened by conceptual and moral forces which should be common to all.

Rules for Nations.

1. Wherefore, and impelled by the tragic confusion that now threatens to engulf the content of civilization, the Governments of Japan and of the United States desire, uniquely, to give expression to those principles of social order and national life upon which their interrelation will be established to continuance, and without which no compromise of political or economic interests could long survive. Between mutually antagonistic “ways of life” there can be no real, enduring trust and friendship but rather an unremitting warfare of the spirit restrained from actual combat only by temporary adjustments of shrewd compromise, motivated by a self-seeking utility and unfair advantage.

2. Accordingly, both Governments declare, without prejudice to the individual conscience of their citizens, that

I. nations, represented by their constituted governments, acquire a legal equality unaffected by race, religion or material resources:

II. nations, properly constituted, acquire by natural process a condition of freedom and a liberty of action consonant with the demands of their own self-preservation and progress, and regulated in its exercise by the precepts of moral conduct, the inalienable rights of others and the transcendent welfare of that humanity shared by all as members of a world household:

III. the governments of nations are the benefactors of their peoples, the guardians of their rights, and reconcilers of the individual freedoms of their citizens:

IV. political institutions, though diversely fashioned to suit national conditions and temperaments, are similarly purposed to serve evenly and justly the rights of all citizens, the equality of their liberties and opportunities, the protection of their domestic security and the confirmation of their individual freedom within the limits of the common good, and with exception of such forfeitures of personal liberty as natural catastrophe may compel or the interests of national salvation judiciously command:

V. the racial origin of nations or individuals confers neither a title to unmerited superiority nor, conversely, a brand of infamy and a mark of shame to condone the blind tyranny of hateful discrimination:

VI. within properly constituted nations, all citizens are equal before the law; with their freedoms of person, of expression, of worship, of occupation and of family association confined in their extension by considerations of general welfare and denied in their exercise only, by juridical processes, when they are subversive of the common good.

VII. nations, like individuals, enjoy the right to legitimately acquire, and securely maintain, possession and control of operation of properties and material resources necessary to the maintenance of national or family life and conducive to human progress through an advancing standard of living:

VIII. the exercise by nations of these rights of ownership and control must be voluntarily regulated by moral law and that mutuality of interest which is inherent in the concept of human society as a brotherhood of man:

IX. peace between nations is not acquired by negation of action but must be won and conserved by moral vigilance, a mutual political confidence and economic tolerance practised in normal relations and applied in arbitration for a solution of such conflicts as are inevitable when the activities of growing nations are quickened by ideals of betterment and not arrested by the craven timidity of self-isolation.

X. mutual relations among the family of nations should be regulated by peaceful processes. But, for defense against aggression that would destroy our pledged “way of life” or threaten our national freedom or security of existence, the protective use of force may be invoked to resist the evil which, if unchecked, may lay waste the very foundations of society.

XI. among nations, the political form of constitution, the governmental organization and the method of selecting its official personnel are proper objects of private domestic concern, subject, however, to the principles of human rights above enunciated and the moral equities which transcend the political structure of any nation.

Aids to Peace.

1. The Governments of Japan and of the United States mutually recognize that grave disturbance of peace and orderly inter-relations may be the outcome of misdirected political policies and propaganda quite as much as actual warfare. To correct the one and to avoid the other, it shall be the aim of both governments, while stoutly adhering to the unchanging principles which underlie and control their intercourse, to envisage an orderly change of processes and conventions, undertaken after consultation and designed to suit future contingencies and conditions which no human insight can discern and no legal instrument predispose.

2. The Governments of the United States and of Japan maintain that a union of good-will, generously sustained by repeated acts of just consideration, should become among both our nations a tradition bulwarking the edifice of peaceful amity against insidious rumors of suspicion, thoughtless animosity to alien manners, and the jealousy and ambition of selfish groups which gather accumulated force when they are ignored and acquire the velocity of a challenge when they are electrified by some unfortunate incident.

Accordingly, for the preservation of peace through the friendship of our peoples, our governments pledge themselves and, so far as may be, our people, to the exercise of mutual consideration and the cultivation of a wider knowledge and appreciation of our respective national folk-ways and traditions.

3. The Governments of the United States and of Japan consider that their national interests can be served and their living benefits advanced by cooperative efforts that take into account (a) the natural endowment of physical and population circumstances in each nation; (b) the political and social environments, whether domestic or adjacent in space and contactual through influence; (c) the economic necessities and comparative subsistence levels of both nations.

Axis Alliance.

1. The Japanese Government declares that its purpose and aim in affirming the Axis Alliance was a purpose of legitimate self-protection and an aim of distributive peace. The Japanese Government refuses to admit, and affirms that it will never sanction, the interpretation of its action or obligation under that Alliance as a design for military involvement in the present European struggle of arms.

2. If such an Alliance was conceived by others, or constricted by subsequent events, as a military manoeuvre initiated against the United States, the Japanese Government not only renounces such an event but reaffirms that it never contracted to such a consequence.

3. The Government of the United States cordially confirms its confident acceptance of the pacific assurance of the Japanese Government and reasserts that it has entered into no alliance, and will renounce any interpretation of existing political associations, as designed for military aggression against the people of Japan.

4. The ensuing stipulations of our “agreement in principle” afford indisputable proof of the genuineness of the foregoing assertions by each Government.

Intermediation of China–Japan Conflict.

1. It is not anticipated that President Roosevelt would announce the following terms nor actually arbitrate judicially the peace. On the contrary,—as part of the “agreement in principle”, the Japanese would pledge these terms secretly to the United States Government with complete confidence that Mr. Roosevelt would not disclose them to the Chinese or to any third Power.

2. Mr. Roosevelt’s public invitation to peaceful negotiations would express only the broad principles for an equitable and enduring peace and for a future desirable union of the two nations acting against communism and any other aggressive enemy of Far Eastern peace. Fortified by knowledge of the pledged terms, Mr. Roosevelt could publicly express his satisfaction that the Japanese would make a just peace with China.

3. By pre-arrangement, the Japanese would then express publicly their acceptance of Mr. Roosevelt’s peace invitation and proceed to negotiate directly with the Chinese the solution of their present conflict.

4. The United States Government will appreciate that the actual negotiations with the Chinese cannot be carried out in the straightforward manner of conversations with Americans. Accordingly, concurrent reports of the projected Chinese-Japanese negotiations will indicate, certainly and correctly, that the Japanese will be demanding substantial concessions at variance with the terms secretly pledged to the United States. Nevertheless, the final terms of settlement will not be at variance with those above listed.

5. Furthermore, to give assurance that the terms, below mentioned, will be sustained in the final draft of the Chinese-Japanese Treaty, the Japanese Government will agree to submit to the Government of the United States a final draft of the Treaty, before publication, so that the Government of the United States may assure itself confidentially that the terms antecedently pledged have been adhered to.

Proposed Secret Terms for a Settlement of the China–Japan Conflict.

1. The Japanese will guarantee

(a) complete political independence of China:

(b) withdrawal of Japanese troops in accordance with a concerted plan agreed to by the Chinese:

(c) no imposition of indemnities:

(d) no acquisition of Chinese territory, with the geographical definition thereof to be mutually agreed upon by the Chinese and Japanese. (It is implied that if, under such definition, the Chinese concede the recognition of Manchukuo, the United States Government subsequently would accept the Chinese decision and accord de facto recognition by sending an official representative to the Manchukuo Government.):

(e) resumption of the Open Door, with agreement to construct jointly (at some future, convenient time) a comprehensive interpretation of the political and economic meaning of that phrase as based on existing diplomatic exchanges and related to our new mutual understanding:

(f) no large-scale or concentrated immigration of Japanese into Chinese territory.

2. The Japanese will request

(a) no boycott or trade discrimination against Japan:

(b) adequate police control particularly in the northeastern area:

(c) civil action to discourage the spread of communism and cooperative suppressive action against military and organized political communism in China.

(d) effective use of present Chinese military forces acting, without assistance of Japanese, to suppress the traditional widespread banditry in China:

(e) civil rights and protection for all foreign invested interests:

(f) the establishment of a unified Chinese Government so constructed as to retain, if the Chinese desire, Mr. Lin⁵¹ who is now acting as Chief Executive of both Governments, and to coalesce the present Governments of Chiang-Kai-Shek and Wang Ching Wei.

3. The Japanese would further agree to the nomination of a committee (1) to supervise Treaty fulfillment by both parties and (2) to report its judgments, to the United States and Japan, on the identity of constitutional government should fresh civil wars break out in China.

Naval Forces.

1. The United States and Japan agree to entertain, during the ensuing three years and thereafter by formally renewed mutual consent, a unilateral request for cooperation of their naval forces when either government judges that a national emergency requires such cooperation: it being understood that both the submission of the request and its acceptance by one Government or the other shall be made or executed in accordance with the constituted procedures, legislative and executive, obtaining in the respective countries.

2. The Japanese Government consents, on the conclusion of this “agreement in principle”, to withdraw its main naval forces in the Pacific to their home bases and to restrict their transit eastward as within limits to be specified at the Conference.

The United States Government agrees to withdraw its main naval forces to Hawaii and West Coast bases and to restrict their transit westward to within limits to be specified at the Conference.

3. The disposition and quantity of auxiliary naval forces of both nations in the southwestern Pacific and Philippine areas will be left for determination by the joint Conference.

4. At the conclusion of the projected Conference each nation shall dispatch a courtesy squadron to visit the country of the other and signalize the new era of Peace in the Pacific.

Mercantile Marine Release. (Not for publication.)

Upon the conclusion of this “agreement in principle”, the Japanese will agree to release on assignment for charter by American marine brokers or shipping companies a very considerable percentage of her total tonnage of merchant vessels (the approximate amount to be determined at the Conference). If properly insured and licensed, the Japanese will impose no restrictions on cargo and no restrictions on destination except direct discharge in England or in Scotland.

Japanese Trade Relations With Germany. (Not for publication.)

A.1. The Japanese will agree to sever completely all trade relations with Germany, both as buyer and as seller, until some future date which shall be determined upon after consultation with the United States.

2. The Japanese will agree also to stop all shipments of supplies to other countries when and if it is established that such countries (or country) are re-exporting such supplies directly or indirectly to Germany.

B.1. The Japanese desire that the United States shall agree to restrict such of her exports to Soviet Russia as, upon presentation of evidence, are being processed to the menace of Japanese military security: this restriction to be sustained until some future date which shall be determined upon after consultation with Japan.

Exports and Imports.

1. In addition to oil and rubber, the Japanese need primarily certain minerals, cotton, steel, “heavy industry” and mechanized products. The Japanese will impose little or no tariff barriers to such imports—but they desire, in return, the assurance of supply of the afore-mentioned materials with quantities to be approximately determined at the Conference and confirmed later in a Reciprocal Trade Treaty.

2. Recognizing the higher costs of American production and the high standard of American living, the Japanese are agreed to accept without protest “prohibitive tariffs” on such exports to the United States of Japanese manufactured products as the Americans consider detrimental to their own economy. In return, the Japanese request the good offices and influence of the United States to establish within the Far Eastern region (a) a standard of tariff equalities and (b) the elimination of existing discriminations against Japanese manufactured products.

3. Foodstuffs and agricultural products from the United States will be admitted to Japan free of duty whenever it is determined that the domestic agricultural produce or product is less than the normal annual consumption demands.

4. The Japanese desire the duty-free exportation of raw and processed silk to the United States; equality with the United States in trans-Pacific freight and passenger traffic; with eastbound rates determined on Japanese standards and westbound rates determined by American standards.

5. The Japanese request, when the official consent to the projected agreement has been given, and when terms have been released for official presentation to the respective Foreign Office and State Department, that the United States should thereupon agree to the resumption of normal trade relations as established under the previously existing Commercial Treaty (subject to the limitations of the American Defense Program). Such an action would have most favorable consequence on the Japanese public opinion and dispose it to be more amenable, than it could otherwise be, to certain provisions of this Agreement. On the other hand, the Japanese will agree to make some comparable gesture of practical amity at the same time; this gesture, or course of action, to be suggested by the United States.

Gold Credit.

1. It is obvious that, under the export-import relation proposed, the trade balance would favor the United States, at present and increasingly in the future as, under peaceful conditions, the standards of Far Eastern living advance.

2. Consequently, the Japanese will need (a) “gold” exchange to meet their unfavorable American balance (b) a firm currency with a better-than-present exchange rate that will enable them to multiply their American purchases and prevent a domestic inflationary process that would disrupt Japanese export business on a monetary basis and drive her into the commodity barter system.

3. Accordingly, and for the higher strategic reason of waging an economic war against Germany by retaining Japan, and with her much of the Far East, on a monetary economy within which Germany cannot operate, it has been suggested, and it is cogently desired by the Japanese, that the United States segregate, but not transfer from the physical possession of the United States, gold (to be determined later as to sufficient amount) which would be applied, under certain conditions, to the support of the Japanese currency and retained without resequestration by the United States unless and until stipulations affecting Japanese currency issue and domestic and exchange values had been violated by the Japanese or unless and until Japan had re-acquired a surplus gold deposit sufficient to establish and maintain her own currency at the value and ratio achieved by the passive assignment of American gold.

Oil. (Not for publication.)

1. The Japanese desire the assurance of purchaseable quotas of crude and refined—the amount to be determined in the Conference and computed on statistics of existing needs and legitimate reserves and on an expert estimate of increased consumption.

2. Actually, the Japanese (without informing their own public) are willing, given assurance of supply (a) not to contest or attempt to disturb the American proration control in the Dutch East Indies: (b) to purchase their oil supplies directly from United States territory provided (c) that, in order to convey to their own public the aspect of “self sufficiency,” they are accorded the contractual right to acquire by purchase, and to control equally with Americans, the yet undeveloped oil resources of the southwestern Pacific area—it being further agreed that the Japanese would open up these wells only if their assured quota is not delivered and if increased demand for use within their own Empire exceeds the deliverable quota.

3. The Japanese agree not to re-export oil, crude or refined, which is delivered within the Empire on the basis of the annual allotment adjusted with a fixed minimum.

4. Within the Japanese Empire, a Government controlled company shall act as the assignee of all imported oil, crude and refined. For the distribution and sale of oil within the Empire, domestic or foreign companies of private capital may freely compete. The Japanese Government agrees to impose no maximum on oil imports which will be allowed freely to increase with the commercial demand determined at the discretion of private purchasers ordering their supplies wholesale through the above-mentioned importing company.

5. The prices of the oil allotment quota to Japan shall be determined according to existing trade practice.

Rubber.

1. The Japanese would consider favorably the establishment of an American-Japanese Company for the maintenance and processing of an adequate rubber supply for the Japanese Empire.

2. Without changing the existing ownership of production, the Japanese desire a contractual allotment proportionate to world needs versus actual supply and based on statistics of proved consumption and on an expert appraisal of advancing needs; this allotment to be obtained at competitive world prices.

3. The Japanese desire complete freedom, with exception as elsewhere noted, for the export of rubber products on a free competitive trade basis to all countries and territories within the Far Eastern region.

Autonomous States in the Southwestern Pacific Area.

1. To assure stability, and as a further proof of their non-aggression pledge, the Japanese recommend the formation of autonomous States (without necessarily changing Government personnel) in certain countries and territorial groups bordering the Southwestern Pacific.

2. To prevent the pawning or seizure of these countries as “war spoils” (an operation, by whomever made, which Japan would feel compelled forcibly to resist); it is proposed that the present Indo-China be constituted as an independent state under the name of “Annam”; that the British-Dutch possessions of Borneo be amalgamated into the “Federated Borneo States” in a manner to be agreed upon by British and Dutch interests; and that the present “Dutch East Indies”, without change of Government, become the “Dominion of the Dutch East Indies” with a political independence and character comparable to, or exceeding that of, Canada.

Status of Far Eastern States Under Joint Far Eastern Monroe Doctrine.

1. The Governments of the United States and of Japan pledge themselves against military or political seizure of any territory within the Far Eastern region as defined and stabilized by a joint American–Japanese declaration of a Far Eastern Monroe Doctrine to be interpreted and applied, after consultation, in a manner exactly paralleling the functioning of the Monroe Doctrine in the Western Hemisphere.

2. The Governments of Japan and of the United States announce that they will not acquiesce in the future transfer of territories or the relegation of existing States within the Far East to the political sovereignty or domination of any European Power.

3. The Governments of the United States and of Japan jointly guarantee the independence of the Philippine Islands and will consider means to come to their assistance in the event of unprovoked aggression by any third Power.

4. The Governments of Japan and of the United States agree not to enter upon any political or military alliance with third Powers directed against the other.

Conference.

1. It is suggested that the Conference between the delegates of the United States and of Japan be held at Honolulu and that this Conference be opened for the United States by President Roosevelt and for Japan by Prince Konoye.

2. This conference could be held as soon as possible (May 1941?) after the “agreement in principle” between the two nations has been announced.

3. The agenda of the Conference would not include a reconsideration of the “agreement in principle” but would direct its efforts to the specification of the pre-arranged agenda and the drafting of instruments to effectuate the “Agreement.”

4. Subjects to be committed to the deliberative decision of the Conference delegates would be

(a) the personnel and mechanical arrangement for drafting a new commercial treaty:

(b) fortifications in the Pacific:

(c) the scope and function of a standing Japanese-American Inter-Commerce Committee with membership divided between both nations and personnel resident, at least during alternate years, in each country:

(d) Japanese Immigration; it being agreed that the United States shall recommend, and that Japan shall require, there shall be no discrimination against Japanese immigration for citizenship in the Far Eastern region:

(e) the recommendation, with description of scope and function, of a Japanese-American Committee to administer the financial provisions of the “agreement in principle” in accordance with the instrumentality which will be devised for its administration by the Conference:

(f) the establishment of a Commission for the adjudication of claims and counter-claims arising from the China Incident and as yet unsettled by diplomatic negotiations:

(g) a structural outline for economic cooperation and elimination of conflict between Japanese and American business interests in territories where neither enjoys political sovereignty or preferment:

(h) a formula to discourage discrimination in legal status against American aliens in Japan or its Possessions and against Japanese in the United States or its Possessions excepting such limitations as are, by law, applicable to all aliens:

(i) provision for student interchange—cooperation of scientific research societies—cultural relations—motion pictures—literature—etc.

(j) air-line communications to & from Japan & the United States.⁵²

It is desired that there should be no foreign observers at the Japan–American Conference.

50. Carbon copy, probably from Father Drought.
51. Lin Sen, President of the Chinese National Government.
52. Added in ink, probably by Father Drought.