Memorandum by the Secretary of State

During the call of the Japanese Ambassador he referred very definitely and earnestly to the American sale of wheat and cotton to China, stating that China planned to sell much of it at a discount and then use the proceeds for any and all kinds of purposes, which might seriously affect Japan. He expressed the earnest hope that our Government would keep these phases in mind and would consult with Japan before taking any steps that would or might reasonably affect her interests. He also indicated very definite opposition to the League of Nations and similar proceedings recently instituted at Paris to aid China in her economic restoration. He repeatedly expressed gratification that Mr. Thomas Lamont and other members of the Chinese consortium had declined the Chinese invitation to participate in the present movement. This was one way the Ambassador had of criticizing our Government for not having pursued a similar course. He further suggested that Japan is strenuously interested in Far Eastern affairs and that there was ample room for all of us in a trade capacity and that he did hope there would be consultation.

I stated to the Ambassador that, as to the wheat and cotton transaction, our Government would have acted as it did if China had not been insistent; that the purpose was to aid the price situation at home, which had become intolerable, and that any purposes to affect adversely Japan’s affairs was not remotely in mind. He indicated that he was disposed to accredit that statement. I did not refer to the economic restoration movement in behalf of China and his remarks relative thereto. The fact was that our Government had instructed an observer to attend the meeting.

C[ordell] H[ull]