Memorandum by the Chief of the Division of Far Eastern Affairs (Hamilton)
During a call by Mr. Morishima, Counselor of the Japanese Embassy, Mr. Morishima brought up the subject of the situation in China. He referred to the fact that the Japanese authorities were putting forth special efforts to adjust cases in which Americans were involved. He said also that he thought that the Japanese Minister for Foreign Affairs in his subsequent conversations with Mr. Grew would explain to Mr. Grew the Japanese point of view. Mr. Morishima expressed the opinion that the conversations between Ambassador Grew and the Japanese Minister for Foreign Affairs would prove very helpful. I said that I thought the conversations would enable each of the parties [Page 858] thereto to obtain a clearer understanding of the viewpoint of the other and of his Government.60b
During the course of the interchange of comment, I remarked that the types of cases which the Japanese authorities had recently adjusted involved more or less surface sources of friction between the United States and Japan and did not touch some of the more fundamental causes of difficulties. Mr. Morishima inquired what I meant by fundamental causes. I said that I had in mind as one illustration the situation which was created when the armed forces of one country went into another country, drove out the established authority, set up a new currency designed to supplant the established currency which was used in the conduct of trade, set up monopolies and promotional and development companies, instituted exchange control and import and export control, etc., the net effect of all of which was that citizens of that country were accorded a preferred status. When Mr. Morishima said that under the arrangements which had been set up in north China everyone was treated alike and there was equality of opportunity, I said that perhaps everyone other than the Japanese were on an equal footing but that we could not regard a system under which the Japanese were given a preferred status as compared with Americans and other foreigners as affording real equality of opportunity. I commented at some length on this matter. Mr. Morishima finally asked whether I would regard as effective equality the placing of Japanese on the same status as Americans and other foreigners. I indicated assent. I added that we could not regard what was going on in north China, in central China and in south China as giving American nationals equality of opportunity.
During the course of the conversation Mr. Morishima stated several times that large-scale hostilities were going on in China and many of the restrictions which had been put into effect by the Japanese military were of a temporary character necessitated by military needs. I commented that if Mr. Morishima had told me that a major battle was going on in a particular locality in China and had said that the Japanese military had imposed special restrictions on travel by American citizens in the area in which the battle was actually taking place, I thought that, leaving aside the question of any opinion we might have as to the hostilities and matters of legal rights, we would endeavor to apply to such a situation the rule of reason in so far as the movement of American nationals and the carrying on by them of their legitimate activities were concerned. I observed that the hypothetical situation which I had described did not exist in most of the large centers in China under Japanese military control. I [Page 859] pointed out that Japanese civilians had returned to these areas in numbers much larger than the numbers living at those points prior to the hostilities. I said that for months Japanese officials had been affirming that the restrictions were of a temporary nature; and that the restrictions continued.
Mr. Morishima observed that as I was aware officials of the Japanese Government had announced that they advocated the establishment of close economic relationships among Japan, “Manchukuo” and China. I said that if Japan and China could work out a commercial agreement based upon the most-favored-nation principle they would be doing something in line with one of the fundamental principles of this Government’s foreign policy. I said that this Government and this country believed in establishing trade relations among countries on a general most-favored-nation basis and that we believed that extension of such a basis in relations among nations would contribute substantially to general prosperity and healthy relationships among nations.
Mr. Morishima said that of course countries sometimes had special needs from point of view of national security. He said that from this point of view Japan might find it necessary to make arrangements whereunder Japan might station troops at certain points in China. I commented that Mr. Morishima was aware of the attitude of this Government with regard to one country interfering in the internal affairs of another country and taking action in another country which represented impairment of that country’s sovereignty and freedom of action.