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  4. Document 833

611B.9417/127: Telegram

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

Tokyo, February 14, 1936—7 p.m.
[Received February 14—10 a.m.]

28. Embassy’s 25, February 8, 8 p.m. Philippine imports of Japanese cotton textiles.

1.
Kurusu stated today to a member of the staff that after consultation between himself and the Vice Minister for Commerce and Industry the replies to the suggestions contained in the Department’s 18, February 7, 6 p.m. were decided upon as follows:
  • Department’s numbered paragraph 1. The Japanese Government wishes it understood that the adjustment does not imply any change in the original agreement nor does it establish any precedent. The arrangement consists of a voluntary amicable adjustment by the Japanese exporters undertaken to meet the wishes of the American side.
  • Department’s numbered paragraph 2. The Japanese Government will transmit the desire of the American Government to the Exporters Association but it should be understood that the Japanese Government undertakes no new obligation in this connection.
  • Department’s numbered paragraph 3. The Japanese Government and the Exporters Association will endeavor to fulfill this suggestion provided that the Japanese Government statistics of exports be used as the basis of computation of volume of shipments or if Philippine arrival statistics are used, that some attempt be made to restrict transshipments from Hong Kong which defeat all efforts of the association to equalize shipments over the 12 months.
  • Department’s numbered paragraph 4. The Japanese Government again most strongly urges that the American and Philippine Governments make every effort to control transshipments from Hong Kong. Such transshipments double the difficulties of the Japanese exporters as in addition to their voluntary curtailment of shipments they are obliged to meet the price competition of the transshipments from Hong Kong, thereby reducing their profits.
  • Department’s numbered paragraph 5. The Japanese Government wishes it understood that the rayon question has no connection with the cotton agreement. It will, however, transmit the implied warning of the Department to the rayon exporters who probably will be inclined to listen as their export business of recent months has not been done at profitable prices.
2.
The adjustment of the agreement interpreted in the sense conveyed in the above may be published in the United States but probably will not be published in Japan.
Grew