611.9417/145
Memorandum by Mr. Roy Veatch of the Office of the Economic Adviser
| Conversation: | Seijiro Yoshizawa, Counselor, Japanese Embassy; |
| Toyoji Inouye, Commercial Secretary, Japanese Embassy; | |
| Tsuneo Hayama, Third Secretary, Japanese Embassy; | |
| Mr. Veatch. |
Mr. Inouye spent July 6 in Washington at the suggestion of Mr. Yoshizawa in order to have a final discussion on a number of questions before his departure for Japan on July 9. He had spent most of the morning with Mr. Fox67 discussing the possibility of an agreement between the American cotton textile industry and the Japanese cotton textile industry with respect to the American Market. Mr. Yoshizawa suggested an informal discussion with Mr. Veatch at luncheon and during the afternoon on a number of points so that the views of Mr. Inouye and of the Japanese Embassy might be made known to the Department of State.
Proposed Joint Committees on Japanese-American Trade
Mr. Inouye and Mr. Yoshizawa were both particularly interested in a further discussion of the possibility of creating joint Japanese-American committees to attack the trade problems in which the two governments and the two peoples are interested. Mr. Yoshizawa said that he and the Ambassador had gained the impression when they talked with Mr. Sayre on the subject that Ambassador Kurusu had not left with Mr. Sayre a clear understanding of the Japanese suggestion that the two governments join in creating special committees to discuss and to advise upon the best means of handling actual or potential trade conflicts between the two nations. It was Mr. Yoshizawa’s suggestion, therefore, that this question be discussed in greater detail.68
Mr. Veatch explained that he had written a rather complete memorandum upon his conversation with Mr. Inouye, Mr. Hayama and Mr. Kuroda on June 11, 1936, setting forth in some detail the specific proposals which Mr. Inouye had made regarding the creation of joint official committees in Washington and in Tokyo for the purpose of exchanging information regarding trends in Japanese-American trade and particularly with regard to potential conflicts. He stated that Mr. Sayre had requested that a study be made of this suggestion in [Page 913] the interested divisions of the Department of State and he understood that some action would soon be taken upon the matter in the Department. Undoubtedly Mr. Sayre would be in a position to discuss the subject with Mr. Yoshizawa and the Japanese Ambassador in the near future.
Mr. Inouye pointed out that his proposals would in effect merely continue in a somewhat more definite form the actual practice that has already been followed, since representatives of the Embassy and of the American Government have met frequently in Washington to exchange information and to discuss trade problems, and that similar conferences had been held between representatives of the American Embassy in Tokyo and the Japanese Government. He felt that it was most important, however, to regularize this procedure and particularly to make an effort through such committees to place information in the hands of the Japanese regarding potential conflicts arising out of United States imports from Japan. He himself always made an effort to secure whatever information he could from the Tariff Commission and the Department of Commerce regarding trends in the trade but he felt it would be much easier if this information could be prepared by the American Government and brought to the attention of the Japanese Government at regular intervals. Mr. Inouye dislikes the necessity of having to ferret out information himself and he also feels that when he alone on his own responsibility presents this information to his Government there is not a ready disposition to treat the information as important and as calling for action. If this sort of material could be gone over by the joint committee in Washington and that committee could counsel some action by the two governments in order to meet the situations disclosed, then he felt that the Government in Tokyo would be much more inclined to give serious consideration to the problems presented.
Mr. Inouye discussed at some length his conviction that all of the trade problems in which the two governments were interested should be brought before the proposed official committees and that all information which could be secured from the trades regarding these problems should be collected by the respective governments and brought to the attention of these committees. Mr. Yoshizawa felt, however, that there were many problems affecting Japanese-American trade relations which required attention and action by private agencies before any appropriate action on these problems could be taken by the two governments. He said that it was well known that the American Government did not exercise great control over industry and business. He said it was also true that the Japanese Government frequently was unable to exercise any considerable control over industry and business in spite of the popular idea that the Japanese Government did have the power to control trade as it pleased. It was his feeling, therefore, [Page 914] that most problems of trade conflict between the two countries could appropriately be handled only by private interests in their early stages and it was his opinion that it would be wise to establish, if possible, two parallel sets of joint committees, the official committees suggested by Mr. Inouye to handle or to advise upon acute trade problems and general trade policy, whereas joint committees representing private business and industry should seek ways of handling problems in their early stages so that critical situations should not arise.
After considerable discussion Mr. Inouye, Mr. Yoshizawa and Mr. Veatch agreed that logic seemed to support the desirability of this dual method of handling trade problems between the two countries, if possible. It was further agreed that it would be desirable to proceed first and as soon as possible with the creation of a joint Japanese-American official committee in Washington to consider Japanese-American trade relations and, further, that it probably would be desirable for this committee to consider at its first meeting or at an early meeting the possibility of the two governments giving some impetus to the creation of a joint committee of representative leaders of business, industry and other economic activities in the two countries.
Proposed Private Japanese Trade Delegation to the United States
Mr. Yoshizawa reported that the Japanese Consul General at New York, Mr. Sawada, is now in Japan and has been urging the sending of a private economic mission to the United States partly to return the visit of the Forbes69 mission to Japan a year ago. Mr. Yoshizawa was informed unofficially that Mr. Sawada had met with success and that things were progressing rapidly for the sending of such a mission to the United States in the near future. Should discussion of some new effort to plan an attack upon trade problems by a joint private committee be undertaken in the near future, it might be possible for the Japanese Government to influence the selection of the personnel of the proposed mission so that that mission might make progress while in this country in discussing such a plan with American business leaders.
Mr. Yoshizawa said that he would make an effort to learn more about the plans for the proposed mission and would pass on to Mr. Veatch whatever information he could secure.
Proposed Private Cotton Textile Understanding
Mr. Inouye reported at some length upon his discussions with Mr. Murchison and with Mr. Fox regarding Mr. Murchison’s proposal to have the American cotton textile industry seek an agreement or an understanding with the Japanese industry regarding the United States market and other markets in which the two industries find [Page 915] themselves in competition. Mr. Inouye had welcomed the suggestion and thought that it held distinct possibilities. He had, however, made some specific suggestions regarding changes in Mr. Murchison’s preliminary plans.
Mr. Veatch suggested that probably Mr. Murchison had had in mind the desirability of inviting representatives of the Japanese industry to come to this country as a courteous first move; he might, nevertheless, welcome a suggestion by the Japanese in turn that leaders of the American industry should come to Japan for the discussions. Mr. Inouye said that he had urged upon Mr. Murchison the desirability of the American textile men seeing the Japanese cotton textile industry so that they might know at first hand the conditions about which so much has been said in this country. He was sure that the American group would receive a royal welcome by the Japanese industry and that they would be free to examine thoroughly any part of the Japanese industry. Furthermore, in support of his proposal that the Americans come to Japan, he stated that it would be difficult for the most important figures in the Japanese industry to come to the United States and he felt that a much better discussion would eventuate if the meeting could be held in Japan. Also, in the event that the American group would wish to discuss the Philippine market, he felt that this could be done much better in the Far East. It was his own suggestion that the American group might find it desirable to stop off in Japan for a preliminary discussion, when it might raise with the Japanese group the fundamental questions which would require careful study, that the Americans might then proceed to the Philippines to look over that situation and then return to Japan for more extensive conferences.
Mr. Yoshizawa supported Mr. Inouye’s suggestions and said that it would be very pleasant if the American group could arrive in Japan by the first of November so that it might have the advantage of the beautiful fall season in the Orient.
Mr. Inouye had asked Mr. Murchison if he felt that he personally could go to Japan with an American group if the decision were made to hold the conferences in the Far East. In Mr. Inouye’s opinion Mr. Murchison gave the impression that he would like very much to be with the American group in such conferences but that he would hesitate himself to suggest that he should make the trip or that he should head the American textile group. Mr. Inouye was of the opinion that it would be wise for Mr. Murchison to head the group because of his background in the academic world and in government service and his understanding of the problems to be considered. It was his opinion, therefore, that the Department of State might wish to exercise some influence in the selection of Mr. Murchison to head the group.
[Page 916]Possible Visit of American Officials to Japan
Mr. Yoshizawa recalled the fact that Mr. Dooman had spoken to him informally some time ago of the possibility of a small delegation of American officials visiting Japan in the near future to study and to discuss possible solutions of trade problems affecting the two countries and also the fact that more recently Mr. Dooman had suggested that it probably would be impracticable to send such a group to Japan before the American elections in November because of the possibility of misinterpretation of the visit. Mr. Yoshizawa and Mr. Inouye wish to urge, however, that if it were at all possible a visit of at least a very small delegation of American officials to Japan at this time should prove to be very helpful. Mr. Veatch pointed out the dangers of misinterpretation of such action because of the political discussions which will continue until the November election70 and it was agreed that it would be undesirable to take any action which would encourage a political discussion of Japanese-American trade relations. Mr. Veatch explained that even Mr. Fox, who was in no sense a political appointee, had been dragged into the discussion of the trade agreements program through Mr. Peek’s articles in the Saturday Evening Post and that because of Mr. Fox’s activities in the trade agreements program, as publicized by Mr. Peek, it might readily be assumed or be charged that he was sent to Japan by this Government in order to negotiate a trade agreement. Mr. Yoshizawa and Mr. Inouye were strongly of the opinion that Mr. Fox would be an ideal person to go to Japan and they urged that this Government consider sending Mr. Fox alone if a larger group were impracticable and if he could be sent without the danger of creating undesirable publicity. For instance, Mr. Fox might merely go on a vacation and travel to the Orient without any public announcement or discussion. Or this Government might find it desirable to send certain officials to the Philippines to study the situation there and this delegation might in the ordinary course of events stop off in Japan, perhaps going and coming, without exciting comment.