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

611.946/289

Memorandum by Mr. Eugene H. Dooman of the Division of Far Eastern Affairs

[Washington,] May 8, 1936.

Conversation:	The Japanese Ambassador;
	Mr. Seijiro Yoshizawa, Counselor, Japanese Embassy;
	Mr. Sayre;
	Mr. Ryder of the Tariff Commission; and
	Mr. Dooman.

The Japanese Ambassador stated that he had been directed by his Government to call at the Department and to make perfectly clear the final position of the Japanese Government in regard to the restriction of imports of Japanese cotton textiles into the United States. The Ambassador then read in translation the text of his Government’s instructions, which were substantially as follows: the Japanese Government is prepared to limit imports for consumption of textiles classified under item 904–b of the Tariff Act for a period of twelve months beginning April 1, 1936, to 30,041,422 square yards. The Japanese Government cannot undertake to regulate imports of textiles classified under 904–c of the Tariff Act.

The Ambassador, still setting forth his instructions, stated that the latter category of goods were exported from Japan largely to Puerto Rico by small manufacturers and merchants who are not members of the association of Japanese textile exporters to the United States.

The Ambassador went on to say that he was directed by his Government to declare that the Japanese cotton industry is greatly aroused over the reported intention of the American Government to increase duties on Japanese textiles in the event that no gentlemen’s agreement can be reached, and that if the American Government should decide to impose increased duties on Japanese textiles the Japanese Government would have to reserve its right to take any appropriate action in the premises.

Mr. Sayre stated that he regretted that the reply of the Japanese Government was not favorable. He went on to say that the Cabinet had on May 7 recommended to the President that he issue an order increasing the duty on certain types of textiles, as advised by the Tariff Commission, but that the Cabinet had further recommended that the President take no action in this regard before noon Saturday, May 9. Mr. Sayre stated that the Ambassador could understand that the decision as to whether or not the last Japanese proposal should be accepted was no longer in his hands—that that decision lay in the hands of the President; that he would get in touch with the President as soon as possible; and that he would let the Ambassador know as soon as possible in regard to the President’s decision.

Mr. Yoshizawa expressed the opinion that no great difficulty should be anticipated in regard to cloths coming under 904–c. He stated that the greater part of this cloth went to Puerto Rico, where there was a limited market; that the exporters in Japan had very little capital; that there is little likelihood of the Japanese being able to increase their market in the United States for printed cloths, for the reason that before current designs can be sent out to Japan to be copied the fashions change. Mr. Yoshizawa added that his Government would expect to have the Japanese allotment credited with reexports on which a drawback had been granted.

Mr. Sayre observed that although the facts might be as stated by Mr. Yoshizawa, an announcement indicating that this Government had overlooked this category of Japanese goods would open the Government to severe attack. References would be made to the heavy increase in shipments of rayon from Japan to the Philippine Islands as an example of the ability of the Japanese to find loopholes.

Mr. Yoshizawa replied in the latter connection that his Government had instructed the Embassy to state to the Department that no parallel could be drawn between cotton goods and rayon goods.

After further discussion along the foregoing lines, Mr. Dooman advanced the suggestion that it might be possible to work out an agreement if the Japanese Government could see its way clear to proposing that an agreement be reached to limit imports of goods coming under 904–b to 30,041,422 square yards, but that this Government would have complete freedom of action to impose duties on goods coming under 904–c if imports for consumption should exceed last year’s figures. Mr. Sayre stated that he would be disposed to consider favorably such a proposal if it were advanced by the Japanese Government, but that he could not, in the present circumstances, advance such a proposal himself. The Japanese Ambassador stated that he would report this suggestion to his Government and ask that a reply be telegraphed to him by tomorrow morning.

Mr. Ryder stated that he wished to raise the question of imports of manufactured handkerchiefs. It was realized that it would not be practicable to reach an agreement in regard to imports of this commodity, but in view of the fact that it was the increasing amount of imports of bleached goods used to manufacture handkerchiefs in the United States which had led to all the agitation, Mr. Ryder thought that some definite understanding should be reached in regard to this matter. The Japanese Ambassador replied that he understood the facts, and that he assumed that it would be our wish that, if an agreement were reached, the question of manufactured handkerchiefs would not be raised by increased imports over last year.