611B.9417/160
The Japanese Embassy to the Department of State4
1. The Japanese Government in entering upon the Gentlemen’s Agreement had in mind only arrivals after August 1, 1935, according to Philippine statistics.
The Japanese Government considers that its stand in this respect is supported by the Philippine laws and practices. The Philippine customs regulations (September 18, 1909, No. 574, Section 2) provide: “The dutiability of and the rates of duty applicable to merchandise imported into the Philippine Islands shall be determined by the arrival of the carrying vessel within the jurisdictional waters of the first port of entry in the Philippine Islands entered by the said vessel with the intention to unload any portion of her cargo thereat.” It is understood to have been the practice of the Philippine Government to apply new tariffs, when tariffs are changed, upon the arrival basis above referred to.
2. Arrivals from August 1 to December 1, 1935 amounted to 26,000,000 square meters, making the arrivable amount for the second semester, beginning February 1, 1936, 19,000,000 square meters on the basis [Page 813] of the annual quota of 45,000,000 square meters, and 23,500,000 square meters on the basis of the annual quota plus the transfer standing at 49,500,000 square meters.
3. The United States Government interprets “Philippine statistics” as liquidation statistics. The result is that 28,700,000 square meters which stood unliquidated on August 1, 1935 is to be included in the liquidable amount allotted to Japanese importation. On that basis by the end of November, 1935, 34,500,000 square meters had been liquidated leaving the liquidable amount for the rest of the twelve months to be (45,000,000 minus 34,500,000 equals) 10,500,000 square meters on the basis of the annual quota or (49,500,000, minus 34,500,000, equals) 15,000,000 square meters on the basis of the annual quota plus the transfer.
4. The United States Government has suggested that 14,000,000 square meters should be added to the liquidable amount for the first twelve months. Add to this amount 15,000,000 square meters (liquid-able amount on the basis of the annual quota plus the transfer) the total will be 29,000,000 square meters.
5. The Japanese Government now proposes that the shipments will be controlled during the semester beginning on February 1, 1936, to the amount of 19,000,000 square meters, namely the annual quota amount remaining on the basis of the arrival statistics. And there still remains, it is said, 20,000,000 square meters to be liquidated. The total will therefore be 39,000,000 square meters.
6. Therefore it appears that the 39,000,000 square meters in the second semester can, to the figures of 29,000,000, be taken care of by the remaining liquidable amount, the excess being 10,000,000. This amount has to be carried over for the second twelve months unliquidated.
7. If the customs practices of the Philippine Government should be so altered while the Gentlemen’s Agreement is in effect, as to bring about a great change in the relation of the amount of arrivals and the amount liquidated, that fact, it seems, shall be taken into due consideration so as not to affect the arrivable quota of Japanese shipments.
An understanding like the following may be advisable;—The arrivable amount may be in excess of the liquidable amount to the figures of 10,000,000 square meters at the end of each semester.
- Handed by the Japanese Ambassador to Assistant Secretary of State Sayre, January 9.↩