The Japanese Minister for Foreign Affairs (Arita) to the American Ambassador in Japan (Grew)

No. 34, Commercial III

Excellency: I have the honor to state that I have carefully perused Your Excellency’s note No. 1207, March 11, 1939, relating to the new measures for the export and shipment of specified commodities which have been enforced in North China by the Provisional Government of the Chinese Republic since March 11, 1939. As Your Excellency is well aware from statements of the Chairman of the Administrative Committee of the Provisional Government of the Chinese Republic and of the President of the Federal Reserve Bank of China and from other sources, in order to have the convertible notes of the Federal Reserve Bank of China, the only legal currency in North China, function fully as a trade currency medium and in order to stabilize thereby the currency system of North China and to bring about a sound development of foreign trade in North China, these measures provide that the approval of the Federal Reserve Bank of China is required for customs clearance for 12 specified commodities of importance which are exported from, or shipped from one port to another within, North China. Contrary to the statement in Your Excellency’s note, we understand that these measures are not drastic trade restrictions, including the requirement of export permits and controlled money exchange. It is our understanding also that the approval referred to above, when applied for by dealers in the manner prescribed, is obtainable fairly and without discrimination as to the nationality of applicants or as to the destination of commodities, and we firmly believe that there is no intention to favor Japan alone or to discriminate against the United States or the various other foreign countries by means of these measures.

In short the Imperial Government believes that the present measures of the Provisional Government of China have been enacted and enforced with strict impartiality in order to stabilize the legal currency of North China and to promote the sound development of the foreign trade of North China, and is firmly determined to support these measures without stint. Therefore, it is the hope of the Japanese Government that the Government of the United States will also understand the real intention of these measures and will support them, thereby promoting the sound development of the trade between Your Excellency’s country and North China.

I avail myself [etc.]

Hachiro Arita