611.003 Lead Pencils/10

Memorandum by Mr. Eugene H. Dooman of the Division of Far Eastern Affairs

Conversation: Mr. Eiji Wajima, Attaché of the Japanese Embassy
Mr. Sayre, Assistant Secretary of State
Mr. Ryder, Department of Commerce
Mr. Dooman.

Mr. Sayre stated to Mr. Wajima that the pencil manufacturers of this country had submitted a complaint to the President that the sudden increase in the importation of Japanese pencils had threatened the maintenance of their Code, and that the President had directed [Page 802] the Tariff Commission to investigate the complaint and to render a report on their findings. The report, Mr. Sayre continued, had been submitted to the President with the recommendation that the tariff on certain grades of pencils be increased to a point which would effectually prevent the importation of lead pencils from Japan. The Committee on Economic Policy, Mr. Sayre said, was of the opinion that it would be desirable to explore the possibility of finding some expedient by which the increase in duties recommended by the Tariff Commission might be avoided, as the Committee preferred to avoid the adoption of measures tending to curtail international trade.

Mr. Sayre then explained to Mr. Wajima that the recent increase in the domestic price of pencils due to the operation of the National Industrial Recovery Act87 had made possible a sudden and marked increase in the importation of lead pencils from Japan. He referred to a statement recently made to him by the late Chargé d’Affaires of the Japanese Embassy, Mr. Taketomi, to the effect that the Japanese Government would be glad to cooperate with a view to preventing the establishment of further impediments to international trade. The Committee on Economic Policy, of which Mr. Sayre is a member, having taken note of the statement of Mr. Taketomi, was desirous of ascertaining whether the Japanese Government would be agreeable to entering into some form of “gentlemen’s agreement” by which the increase in the tariff necessary for the protection of the Code for pencil manufacturers might be obviated.

Mr. Wajima expressed appreciation for the courtesy shown to his Government by informing that Government of the measures impending before such measures were definitely taken. He expressed himself as being thoroughly in accord with the suggestion of setting up a “gentlemen’s agreement”. He said that the imports of Japanese pencils into the United States did not run into very large figures; but, he continued, the Japanese Government was somewhat concerned lest the increase in the duty on lead pencils, as recommended by the Tariff Commission, lead to similar increases in the duties on other commodities exported from Japan to the United States. He expressed confidence that his Government would favorably regard the suggestion that a “gentlemen’s agreement” be arranged. He then asked Mr. Sayre whether Mr. Sayre had in mind a definite proposal which the Japanese Embassy could put before its Government.

Mr. Sayre replied that he had not prepared any proposal for presentation on the occasion of the present conversation, which he hoped Mr. Wajima would regard as purely informal and confidential. Mr. Sayre added parenthetically that he had considered it advisable to [Page 803] have this conversation in regard to the lead pencil case, but that it was not to be taken as a precedent.

Reverting to Mr. Wajima’s inquiry, Mr. Sayre said that he did not know whether his committee and other interested agencies of the Government had definitely decided on any figures. Mr. Ryder remarked that imports of Japanese pencils had risen from a few thousand gross in 1932 to 160,000 gross in 1933, due to the operation of the Code, and that the figure would have to be substantially lower than the latter amount, which was found to be injurious to the domestic manufacturers. Mr. Sayre said that he personally would be prepared to recommend the figure of 125,000 gross per annum, with a monthly maximum of 15,000 gross.

Mr. Wajima replied that the Embassy would immediately report to Tokyo, and that he hoped to be able to present a reply within the next two or three days.

It was arranged that Mr. Wajima communicate his reply in the first instance to Mr. Dooman, who would in turn report to Mr. Ryder and Mr. Sayre.

  1. Approved June 16, 1933; 48 Stat. 195.