611.943 Gloves/9

Memorandum by Mr. Roy Veatch of the Office of the Economic Adviser

Mr. Yoshizawa called on Mr. Veatch late in the morning to deliver his Government’s response to the Department’s position respecting wool-knit gloves set forth in a statement handed to Mr. Yoshizawa by Mr. Sayre on February 4, 1936.

Mr. Yoshizawa reported that members of the Exporters Association met on the 7th for a lengthy discussion “in deadly earnest”. The meeting had been unable to reach a definite decision, however, and the Japanese Government requested four or five days more of grace so that members of the industry in outlying cities and towns might be consulted before a final decision was reached with respect to the proposal of the Department.

Nothing was said in the cable which the Embassy had received from Tokyo to indicate whether the exporters were likely to set up the voluntary restriction mentioned in the Department’s statement of February 4. Mr. Yoshizawa was requested to place certain additional facts before this Government, however. A check-up in Japan had disclosed the fact that contracts had already been concluded with American firms for the delivery of 800,000 dozen pairs of wool-knit gloves and mittens this year and some 230,000 or 240,000 dozen pairs, were already in the process of manufacture for delivery on these contracts. [Page 834] Many, if not most, of these contracts had been made with Americans in Japan representing American importers. Mr. Yoshizawa indicated that the Japanese manufacturers considered that there would be great difficulties in limiting their shipments to the volume suggested by this Government, entailing the breaking of many contracts and possible court action resulting therefrom and also real financial loss due to the number of gloves already made or in process of manufacture and to the amount of machinery which has been installed to supply this market. In any event, it would take some time to make the necessary arrangements in Japan, including the allotment of a quota if it be accepted.

The manufacturers of wool-knit gloves are rather widely scattered in Japan, although they are chiefly in four important cities. It would take four or five days to get their views and thus to give the American suggestion due consideration.

Mr. Veatch spoke of the considerable delay that this Government had already agreed to and of the difficulty of securing further delay by the Tariff Commission, especially in view of the situation in the trade and the pressure for early action. He would place the Japanese request before American officials just as Mr. Yoshizawa had presented it, however, and would be able to give Mr. Yoshizawa a reply before evening so that a cable might be gotten off to Tokyo the same day.

As soon as possible Mr. Veatch conferred with Mr. Ryder of the Tariff Commission and he in turn discussed the matter with others in the Commission, including Mr. Fox and Mr. Durand. It was decided in the Tariff Commission that so far as the Commission was concerned, the Japanese Government might be given the following statement: The Tariff Commission will proceed as it had planned to make its report to the President, probably the first of the week. Since it will take some time for the President to study the matter and to refer it for comment to certain agencies of the Government, however, it will be possible for the President to take no action upon the Tariff Commission’s report until after Thursday, February 13. Should the Japanese Government inform this Government on or before February 13 that the Japanese exporters would institute the measure of control as suggested by this Government, then the President would be advised to refrain from proclaiming increases in the tariff upon imports of wool-knit gloves and mittens.

This suggestion of members of the Tariff Commission was placed before Mr. Phillips26 and he authorized Mr. Veatch to make the suggested statement to Mr. Yoshizawa.

At 5:00 o’clock Mr. Veatch telephoned Mr. Yoshizawa and communicated the statement set forth above.

  1. William Phillips, Under Secretary of State.