611B.9417/159
Memorandum by Mr. Roy Veatch of the Office of the Economic Adviser of a Conversation With the Counselor of the Japanese Embassy (Yoshizawa)
Mr. Yoshizawa called to say that the Embassy had received instructions from Tokyo in reply to the Ambassador’s95 cable (dispatched following the Ambassador’s conversation with Mr. Sayre96 on December 2797) respecting an adjustment of the agreement covering imports into the Philippines of Japanese cotton piece goods. The Japanese Government had secured the agreement of the exporters to withhold shipments until after the end of January, and the Japanese Government had no objection to announcement of this fact by this Government.
The Japanese Ambassador and Mr. Yoshizawa would like to call upon Mr. Sayre and discuss the rest of the instruction which they had received from Tokyo. Mr. Yoshizawa could offer only a hint of the nature of this instruction:—the Japanese Government would urge Japanese exporters to limit their shipments into the Philippines during the second six months period of the agreement to a total of 19,000,000 square meters rather than the 23,500,000 square meters which the exporters felt they were entitled to ship during this period (the Government’s figure of 19,000,000 square meters is arrived at by subtracting the total of arrivals in the Philippines during the first four months of the agreement from the normal total of 45,000,000 square meters for the year, whereas the exporters’ figure of 23,500,000 is [Page 807] arrived at by subtracting the 26,000,000 from the maximum of 49,500,000 for one year, including a transfer of 10 percent from the second year.)
As he left, Mr. Yoshizawa asked if any particular thought had been given to the problem of transshipments via Hong Kong and Shanghai, and he gave the impression that the Japanese exporters are still anxious about this part of the arrangement since they cannot control such shipments and in their opinion they threaten to upset the allotment of their total quota among the members of the Exporters Association.
I replied that apparently it was impossible to find any way to handle this problem or the parallel problem of possible increases in imports into the Philippines of cotton goods from Shanghai mills without special quota legislation in the Philippines. I asked if Mr. Yoshizawa saw any other method and he replied in the negative. I then asked what his Government would think of action by the Philippine Government setting up quotas for all countries other than the United States, the Japanese quota to be based upon figures established by the voluntary agreement.
Mr. Yoshizawa expressed his own opinion that his Government would have no objection to such an arrangement and would, in fact, favor it. He was of the impression that earlier instructions to the Embassy, stating that his Government would favor action by the Philippine Government to prevent the importation of Japanese goods transshipped via other ports, was intended to cover also the possibility of like action by the Philippine Government respecting imports of goods manufactured in Chinese ports. It was his opinion, and he was sure also the opinion of his Government and Japanese exporters, that increasing shipments from Shanghai mills, whether Chinese-owned or Japanese-owned, would be harmful to Japanese interests and to the successful working of the agreement.
In order to be certain of the point, I asked if Mr. Yoshizawa was of the opinion that his Government would agree to such action by the Philippine Government (placing quotas upon direct shipments from all countries and transshipments of Japanese goods) if it were requested for an opinion. In reply Mr. Yoshizawa said that such action was clearly within the power of the Philippine Government and he saw no reason why it should not take such action independently and without any reference to Tokyo. I then put the question in another way and said that if action of this nature were contemplated the Embassy might be asked to inquire if the Japanese Government had any objection to such action, and he said that he was sure no objection would be raised. He then reiterated his belief that his Government and Japanese exporters do now favor such action and he made it particularly clear that he included direct shipments from Shanghai [Page 808] mills in this judgment. Japanese exporters have no more control over exports from these mills than they do over transshipments of their goods from other ports and they would like to have some arrangement made which would remove these complicating factors.
- Hirosi Saito.↩
- Francis B. Sayre, Assistant Secretary of State.↩
- For memorandum of December 27, 1935, see Foreign Relations, 1935, vol. iii, p. 1045.↩