Foreign Relations of the United States Diplomatic Papers, 1936, The Far East, Volume IV

611.9417/81

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

[Washington,] March 9, 1936.

Conversation:	Mr. Seijiro Yoshizawa, Counsellor of the Japanese Embassy,
	Mr. Feis,
	Mr. Veatch.

Mr. Feis handed Mr. Yoshizawa copies of a table of statistics³⁹ showing the United States imports of countable cotton cloth from Japan monthly during 1935 and during January, 1936. He pointed out that the January statistics, both of imports for consumption (goods actually entered through customs) and general imports (goods arriving in American ports), were much higher than at any time during the last six months of 1935. Imports for consumption in January were almost fifty percent higher than during any month of 1935 and general imports for January were exceeded only in the month of February, 1935. It was quite apparent that imports in January again showed the abnormal increase which had characterized imports of such goods from Japan during the early part of 1935.

Mr. Feis explained that the Department was bringing these statistics to the attention of the Japanese Embassy at the earliest possible moment so that the Japanese Government and the Japanese exporters might have an opportunity to take some action regarding this trade if they felt it wise to do so. This rapid increase in imports was almost certain to arouse again the strong opposition of the American industry to such imports and to create great pressure upon the Government to set up some drastic means of restricting these imports. These figures had just been received from the Commerce Department and had not yet been published and, with the desire of being foresighted in this instance, the Department was bringing them to the attention of the Japanese Embassy so that they might be cabled to Tokyo if the Embassy so desired.

Mr. Yoshizawa agreed that the increase in imports of these goods into the United States during January was very marked. He said that he understood that they were being brought to the attention of the Japanese Embassy as a warning to the Japanese Government.

Mr. Feis said that in a way this was true but it was not that the State Department wished to warn the Japanese Government. Rather, the Department merely wished to give the Japanese Government the advantage of an understanding of the circumstances. Mr. Yoshizawa was reminded of the campaign of the cotton textile industry in New England during the early part of 1935 against Japanese competition and it was pointed out that opposition to imports from Japan had been growing in the South as well as in New England so that if occasion were given for new protests it was probable that the industry would be united in such protests and would thus be able to bring much greater pressure to bear upon the Government.

Mr. Feis said that of course he was not authorized to make any promises whatsoever but that he believed that if imports from Japan had continued at the levels at which they had been held during the latter half of 1935 it would be possible for this Government to avoid placing further restrictions upon imports of cotton piece goods from Japan. If the heavy importations of January continue, however, it would be very difficult, if not impossible, for the Government to withstand the pressure for action. Undoubtedly it would wish to prevent added restrictions but pressure would be very difficult to withstand, especially during this election year. As Mr. Yoshizawa knew, the Tariff Commission has been engaged in investigation of the cost of production of cotton piece goods for some months. A report on this investigation will be ready some time in the near future. Action with respect to this report would necessarily be influenced by the course of imports of cotton piece goods from Japan.

Mr. Yoshizawa said that he would transmit to his Government the statistics which had been handed him as well as the statement which Mr. Feis had made.

39. Not printed.