611B.9417/56
Memorandum by Mr. Eugene H. Dooman of the Division of Far Eastern Affairs of a Conversation With the Third Secretary of the Japanese Embassy (Hayama)
Mr. Hayama called this morning at my request. I told Mr. Hayama that I had a somewhat delicate task to perform, and that I hoped that I would be able to convey to him the precise spirit of friendliness and frankness which motivated the Department in taking the position which I was about to explain to him.
I reviewed briefly the proposal which Mr. Sayre had explained to the Counselor of the Japanese Embassy on the occasion of their last interview on July 19 [26]. I said that our proposal had been drawn up with a view to giving as much satisfaction as possible to each of the three parties concerned, that is to say the United States, the Philippine Islands and Japan; that we believed that a satisfactory arrangement would bring benefits in the field of political relations; and that we felt confident that the principle of an equitable division between the United States and Japan of their combined share of the Philippine textile market could best be maintained by dividing such share into two equal portions. After four months of discussion, we had reluctantly concluded that the Japanese had not appreciated the spirit in which our proposal had been formulated; it seemed to us that the Japanese thought we were attempting to drive a hard bargain. After a careful review of the negotiations, and especially after having carefully examined the reply of the Japanese Government as communicated by Mr. Hayama to me on August 14, we had regretfully come to the conclusion that there appeared to be no possibility of reconciling the American and Japanese positions. I stated that we did not, however, wish to give the impression that we were no longer interested in continuing the negotiations. I explained to Mr. Hayama that our proposal was not withdrawn and that it was available for the Japanese to accept whenever they wished to do so.
[Page 994]Mr. Hayama reviewed my statement in order that he might assure himself that he had understood me correctly. He seemed to have understood clearly.
Mr. Hayama then asked whether we could comply with the request of the Japanese Government and obtain an assurance from the Philippine Government that the duty on cotton textiles would not be increased. I replied that we could not comply with this request without running counter to the policy of this Government to refrain from endeavoring to restrict the exercise by the Philippine Government of its constitutional powers.
Mr. Hayama expressed regret that matters had not progressed more favorably. He said that he had not reported to Tokyo in regard to the conversation which we had on August 14, but in reporting the substance of the reply which I had given him today he would point out that we had expressed the opinion that, if Japan were permitted to export 50,000,000 square meters to the Philippines there would remain for the United States a balance of only 35,000,000 to 40,000,000 square meters, which was not in accordance with our basic principle of sharing the trade in equal portions.
As Mr. Hayama was about to leave, I asked that he make clear to his Government that our proposal had not been withdrawn.