611.946/341
Memorandum by Mr. Eugene E. Dooman of the Division of Far Eastern Affairs
Mr. Yoshizawa said that the discussions between the American velveteen industry and the Japanese velveteen industry had made some progress; that one feature of the proposed agreement with regard to which Mr. Dooman had expressed distaste, namely, the monopoly feature, had been eliminated; and that the two sides are now discussing “quantities”. As might be expected there was a large disparity between the figure proposed by the American side and the figure proposed by the Japanese side, the Japanese desiring that the annual allotment be fixed at 4,000,000 square yards, whereas the American side wished to have the allotment fixed at 1,000,000 square yards. In view of that disparity, Mr. Yoshizawa said that the Japanese Government wondered whether interposition by the American and Japanese Governments would not promote a speedy and satisfactory conclusion to the negotiations.
[Page 936]Mr. Yoshizawa then read certain figures, as follows:
| Exports from Japan, January to July, inclusive | 3,000,000 sq. yds. |
| Imports for consumption into the United States, January to July, inclusive | 1,973,000 sq. yds. |
| Exports from Japan, August 1935 to July 1936 | 4,300,000 sq. yds. |
| Imports for consumption into the United States | 3,237,000 sq. yds. |
(Mr. Yoshizawa commented that, after making allowances for normal lag, there seemed to be undue discrepancy between above two sets of figures.)
| Exports from Japan | Quantity (sq. yds.) | Value (yen) |
| 1935 | 2,425,000 | 1,062,000 |
| First 9 months, 1936 | 4,927,000 | 2,291,000 |
Mr. Yoshizawa stated that the Japanese were of the opinion that, in the light of the foregoing figures, an annual allotment of 3,000,000 square yards seems to be a fair one.
Mr. Dooman said that there appeared to be two points raised: (1) should the Governments concerned intervene in the present private negotiations?, and, (2) if the reply to the first question be in the affirmative, would 3,000,000 square yards be a fair allotment?
With regard to the first point, Mr. Dooman said that he would bring the matter to the attention of Mr. Sayre for decision. With regard to the second point, Mr. Dooman felt that he should point out to Mr. Yoshizawa that the figures suggested represented approximately 50% of the total annual consumption, and that speaking for himself he did not think it fair to ask the American industry to surrender approximately one-half of the home market to its Japanese competitor.
Mr. Yoshizawa asked whether Mr. Dooman would have any objection to Mr. Yoshizawa calling on Mr. Fox of the Tariff Commission. Arrangement was made over the telephone for Mr. Yoshizawa to call on Mr. Fox, but before Mr. Yoshizawa left it was agreed that there would be no further or formal discussion of this matter until it had been referred to and acted upon by Mr. Sayre.