Foreign Relations of the United States, Diplomatic Papers, 1933, General, Volume I

550.S1 Washington/488: Telegram

The Ambassador in Japan (Grew) to the Secretary of State

Tokyo, May 17, 1933—8 a.m.
[Received May 17—6:40 a.m.]

101. Reference my telegram No. 79, April 13, noon, and my despatch No. 365, April 19, 1933,³⁵ both regarding the Japanese attitude towards the preliminary economic conversations at Washington.

The Embassy has been informed by the Foreign Office that as yet no detailed instructions have been approved and issued to the Japanese delegation. However a detailed compilation of general policy has been prepared by the governmental departments interested and will probably come before the Ministry of Foreign Affairs for approval this week. It is understood that the delegation has no authority to bind Japan on any question but must refer each proposal to Tokyo for approval. The Embassy has been collecting information from various sources regarding the trend of opinion among the governmental departments concerned and believes the following to indicate the general policy to be followed at the Washington conversations and the London Conference. As will be seen, the Japanese do not appear to have any constructive proposals to offer but are willing to consider any proposal which may be made in the light of the best interests of Japan. Their general attitude may be summed up in the words of Fukai, one of the delegates, who is reported in the press to have said just before leaving for Washington:

“There are two aspects to international cooperation. There is unconditional cooperation to promote the common interests of the world. There is cooperation to further the interests of any one nation. I hold to the latter viewpoint. In order to promote Japan’s interests, Japan will cooperate with other nations on certain points.”

1. Political Matters

(a) Consultative Pact. Because of their experience with the League the Japanese view with alarm any attempt to implement the Kellogg Pact.³⁶ They fear that a consultative pact which provides for the definition of an aggressor will react on Japan. It is claimed that the same circumstances which caused the Japanese break with the League will cause them to accept a consultative pact only with reservations excluding Far Eastern affairs from its scope.

(b) Asiatic Monroe Doctrine. Ishii himself advocates an attempt to obtain recognition of Japan as the “guardian of the peace of Asia” rather than an attempt to renew the Lansing-Ishii agreement³⁷ or to establish an Asiatic Monroe Doctrine. It is not known whether or not the Government favors Ishii’s views but observers believe that some attempt will be made to establish the doctrine that western powers should not interfere in Asiatic affairs.

(c) Disarmament. As explained in my despatch No. 365 the Japanese have no wish to disarm under present conditions. They are inclined to view disarmament as a political problem and probably will insist upon a review of Far Eastern political questions in connection therewith. They may intend to consider disarmament in connection with paragraph (b) above.

2. Economic Matters

(a) Money and Credit. The return to the gold standard and the stabilization of currency is favored in principle but it is claimed that it is difficult for Japan to accomplish these ends because of the small gold reserve and the weakness of Japanese currency. A return to the gold standard would therefore require redistribution of gold reserves among the nations and stabilization of exchange would require assistance from the United States in the form of credits or exchange operations. The Japanese wish to avoid bringing the yen back to its former level in terms of the gold dollar. Apparently they would prefer to stabilize it at somewhere around 20 cents but might compromise at 25 cents if nothing better could be done. They prefer to let the yen find its own level in international trade and eventually alter the gold content to conform thereto, rather than to fix an artificial high rate. They wish to arrange to pay interest on Japanese Government bonds issued in foreign countries in paper yen or in depreciated currencies of the countries where issued instead of in gold. Plans for raising the value of silver and for using silver for specie reserves are generally approved but they do not consider it feasible to fix the relative value of silver to gold.

(b) Prices. Plans to raise the level of commodity prices by means of more liberal international and domestic circulation of currency and credit are favored.

(c) Movement of Capital. The Japanese are anxious to secure free international movement of capital and the Bank of Japan will cooperate with other central banks to attain this object.

(d) Trade Restrictions. The Japanese are anxious to remove existing or threatened restrictions on Japanese trade caused by the depreciation of the yen, such as import quotas or anti-dumping tariffs. They are expected therefore to approve in principle the mitigation or abolition of such restrictions but will claim consideration of special conditions obtaining in each country. For example, the Japanese have always maintained restrictions on the importation of rice in order to regulate domestic rice prices and are unwilling to abolish these restrictions.

(e) Tariffs. A reasonable lowering of tariff barriers is approved in principle but a general flat reduction of tariffs is opposed on the ground that the Japanese tariff level is already comparatively low. Bilateral or multilateral reciprocal tariff conventions are favored.

(f) Organization of Production and Trade. The desirability of readjusting international production and consumption of commodities is realized but it is not considered feasible to accomplish this by international convention because of peculiar conditions in each country.

Grew

35. Neither printed.
36. Treaty for the Renunciation of War, signed at Paris, August 27, 1928, Foreign Relations, 1928, vol. i, p. 153.
37. For text, see ibid., 1917, p. 264; for confidential protocol, see ibid., 1922, vol. ii, p. 595.