893.48/881

Memorandum by the Chief of the Division of Far Eastern Affairs (Hornbeck) of a Conversation With the Japanese Chargé (Taketomi)

Mr. Taketomi came in by appointment and said that he wished to talk again about the R. F. C.38 $50,000,000 loan to China. He recounted various points in the history of the loan and the fact that very little cotton or wheat has been sent to China on the basis of this credit and then proceeded to say that the loan had originally made a very bad impression in Japan and that that impression continues, partly because of the fact that the Chinese press continues to capitalize the transaction as an evidence of special friendliness on the part of the United States to China. He then said that he was under instruction from his Government to make informally the suggestion that if and when the question of extending or revising the contract comes up for consideration thought be given to this feature of the general effect upon American-Japanese relations. He made the statement in such a way that it gave the impression of an intimation that termination of the contract would be pleasing to the Japanese Government—on the [Page 373] score that it would be helpful toward general improvement of these relations.

Mr. Hornbeck confined his reply to a statement that he would make record of the conversation and bring the matter to the attention of the Acting Secretary.

S[tanley] K. H[ornbeck]
  1. Reconstruction Finance Corporation.