893.48/941
The Secretary of State to the Ambassador in Japan (Grew)
Sir: There are enclosed copies of letters91 exchanged between the American Cotton Cooperative Association and the Department in regard to 102,000 bales of American raw cotton, stated to be in Shanghai, which had previously been purchased in the United States by the Chinese Government under the terms of the wheat and cotton credit extended on May 29, 1933, to the Chinese Government by the Reconstruction Finance Corporation, and which had been purchased by the Association from the Chinese Government. The Association affirms that Chinese cotton mills controlled by Japanese capital “were instructed to boycott the cotton financed by the Reconstruction Finance Corporation and purchased by the Chinese Government”, and that the refusal of such mills to purchase the cotton under reference is detrimental to the consumption in China of American cotton. The Association is inclined to believe that the Japanese-controlled mills in China “would like to see the boycott lifted”, and it suggests that if such assumption is correct a friendly approach to the Japanese Government might at this time meet with a cordial response.
In view of the character of the references by officials of the Japanese Government and by the Japanese press to the wheat and cotton credit above mentioned, the Department doubts whether an approach by officers of this Government to the Japanese Government would result in removal of any interdiction which may have been laid down in regard to purchase by Japanese interests of such cotton. However, there have been noted press despatches from Shanghai to the effect that the Commercial Attaché of the Japanese Legation in China entertains the view that Japanese spinning interests should be permitted to purchase the cotton under reference.
Any information in regard to the present attitude of the Japanese Government which you may be able to obtain without making inquiry in Japanese official quarters, and your comment in regard to this matter, would be of interest to the Department.
Very truly yours,
- None printed.↩