611B.9417/120: Telegram

The Ambassador in Japan (Grew) to the Secretary of State

20. Department’s 12, January 29, 6 p.m., and 13, January 30, 6 p.m.

I called on the Minister for Foreign Affairs at 2:30 today and made the desired representations in detail. The Minister stated that he was unfamiliar with situation and that the Chief of the Bureau of Commercial Affairs13 would handle the matter. He said that he would instruct Kurusu to “endeavor to conciliate”.
The Commercial Attaché14 and the First Secretary15 called on Kurusu this afternoon and discussed the matter thoroughly. According to Kurusu, the Japanese position is that the Philippines customs import statistics are extremely inaccurate for the purpose of recording actual monthly importations because liquidation of duty often takes place long after the goods have been cleared through customs and have entered into consumption. He also denied that there were unusually large stocks in the Philippines when the agreement became effective. In order to quiet possible opposition, however, he made the following tentative counterproposal subject to the approval of the Osaka cotton exporters: that the Japanese renounce for this semester the 10 percent flexibility privilege and that instead of shipping the remaining 19,000,000 square meters of their quota during the rest of the quota year they will ship only 15,000,000 square meters or at the rate of 2,500,000 per month. However, because of contracts already concluded and accumulated since November when shipments were stopped he cannot promise that the February shipments can be held within 2,500,000. Thereafter, however, every effort will be made to equalize the monthly shipments over the 6 months’ period. He said that they could not possibly agree to the proposal to stop shipments during February because of contracts already concluded.
Kurusu hopes to obtain the approval of the cotton exporters to the above proposal tomorrow as well as their consent to publication of the arrangement in the United States if approved. The Embassy, of course, has in no way indicated that the Department would accept this counterproposal.
The risks of adverse moves by the American textile interests were fully set forth both to Hirota and Kurusu.
  1. Saburo Kurusu.
  2. Frank S. Williams.
  3. Erie R. Dickover.