The Ambassador in Japan (Grew) to the Secretary of State
[Received January 9—9:25 a.m.]
6. Department’s 202, December 24, 1 p.m.38 At my direction the Counsellor of the Embassy39 called yesterday on the Vice Minister for Foreign Affairs40 and in the course of discussion of the proposed legislation to place the automobile manufacturing industry of Japan under a system of control by means of licenses advised him orally and informally of the American Government’s attitude as set forth in the final paragraph of instruction 882 of November 18, 1935,41
The Vice Minister said that he had as yet received no draft of the proposed law and was therefore unable to reply but he observed that the treaty of 191142 did not provide for rights of manufacture. The Counsellor replied that irrespective of the specific right of manufacture, assembly and manufacture under present day practice are incidental to and necessary for the trade in automobiles and that a limitation of the right to assemble motor cars under the same conditions as Japanese firms would seriously handicap the American automobile trade and would clearly be discriminatory in contravention of the terms of the treaty.
The Vice Minister said that he would examine the matter and would communicate with the Embassy later. I shall be guided by developments in determining whether representations to the Minister for Foreign Affairs by myself are desirable.