The Japanese Embassy to the Department of State40


During the year 1934, Japanese exports, the major portion of which was represented by cotton textiles to South and Central American countries, aggregated 104,000,000 yen. While thus the importance of those markets to Japan is increasing, there has occurred a trend in several countries in the area to limit the importation of Japanese goods or to abrogate commercial treaties with Japan for the purpose of attaining trade balance, as in the case of Peru, Colombia and Cuba.
Such policies of South and Central American countries are accounted for in view of the prevailing economic difficulties the world over, and the necessity of protecting the currency systems, the exchange rates, etc., of the respective countries. And the Japanese Government is endeavoring to meet the wishes of those countries in so far as the circumstance permits. It is, in the meantime, thought possible that such attitudes of South and Central American countries toward Japanese imports have been influenced by the reciprocal agreements [Page 946] with the United States or by the activities of American exporters. (The annexed newspaper report41 tends to strengthen such surmises.)
It is well understood that the reciprocal policy now adopted by the United States Government has not as its object an attack upon the trade of other countries. But, in point of fact, if Japanese exportation to South and Central American countries, notably of cotton textiles which constitute the main portion of it, were to become smaller, the natural result would be a diminution of the exportation of American raw cotton to Japan. Furthermore, a lessening in exportation of Japanese goods would, as a basic fact, bring about the impairment of the purchasing power of Japan and the consequent depreciation of the exchange value of the yen, which would inevitably entail prejudicial effects upon the export trade of the United States.
It is the firm conviction of the Japanese Government that the attempt to balance the trade between any two given countries without any regard to the practical possibilities or difficulties would eventually cause the international trade to fall down and make the world’s economic rehabilitation more than ever difficult of attainment. But, in view of the actual situation in which Japan is receiving insistent demands from countries with unfavorable balances of trade vis-à-vis Japan to arrange for an equilibrium of importation and exportation, Japan is placed in a position to request of the countries that enjoy favorable balances of trade vis-à-vis Japan to effect an increase in the importation of Japanese goods as a measure to meet the emergency of the case. With this object in view Japan is actually carrying on negotiations with Australia, Canada and Germany, severally.
In the circumstances and in view of the present trend of the Japanese-American trade, Japan is in a position to request this country for an increase of Japanese exportation to the United States. Complaints are therefore expressed in various quarters as to the movements in the United States to stop or limit the importation to this country of such goods as rubber goods, electrical appliances, pencils, matches, fabrics and rugs of cotton, silk and rayon and so forth. Taking into consideration the present condition of the commerce between our two countries, the American trade relations with South and Central American countries and the financial position and influence of the United States, the Japanese Government is therefore wondering, as a means of coping with the situation, if there cannot be contrived some means through which the Japanese-American trade and the Japanese-South-and-Central-American trade could be adjusted on the principle of the triangular trade.
It is confidently believed that the United States Government entertains the same desire as the Japanese Government to bring even closer the economic relations and to increase friendship and cordiality between our two countries, as evidenced by repeated expressions of opinions by the United States Department of State on the subject of reciprocity and three-cornered adjustment. The Japanese Government will therefore appreciate it greatly if the United States Government will kindly disclose its opinion on the point raised in the present memorandum.
  1. Handed to the Secretary of State by the Japanese Ambassador, February 19.
  2. Not reprinted; it was a news item from the New York Times of September 9, 1934.