611.946 Rag Rugs/185

Memorandum by Mr. Eugene H. Dooman 91 of the Division of Far Eastern Affairs

Conversation: Mr. Toyoji Inouye, Japanese Commercial Secretary;
Mr. Tsuneo Hayama, Second Secretary, Japanese Embassy;
Mr. Charles R. Cameron, American Consul General, Osaka;
Mr. Dooman.

Mr. Inouye said that, following the conversation which he had a few days ago at Washington with Messrs. Fox,92 Veatch93 and Dooman, he had sounded out certain of the principal importers in New York of Japanese rugs with regard to the question whether there had been a marked increase in the demand in the United States for cotton rugs. The information he had received indicated that general business conditions in this line have improved and the demand is greater than it was a year ago. He had also been told that the supply from Japan is so much below the demand that there have been substantial imports from China, Italy and Belgium. He presented a table94 setting forth the present quotas in the different categories of cotton rugs, and increases recommended in the various quotas. The information Mr. Inouye had was that if the increases recommended were acceptable, the increased quotas would amount to only about fifty percent of the present estimated demand for Japanese cotton floor coverings. Mr. Dooman asked whether Mr. Inouye had given full consideration to the question raised by Mr. Fox, which was, would a request for increased quotas warrant the risk of alienating the cooperation of the domestic industry and cause the latter to seek the taking [Page 786] of some restrictive action by Congress? Mr. Inouye said that he had given that question thought and had decided that it was a risk worth taking. He explained that if the quotas for the present year are not increased the export guild in Japan, he felt sure, would see to it that the quotas were not exceeded, but that upon expiration of the agreement the guild would permit unrestricted shipments to the United States, which would result in very unfortunate consequences. He thought, therefore, that, in the light of the probability that the demand in the United States had substantially increased, he could ask us to consider favorably the increases proposed.

Mr. Dooman said that a careful survey would be made of market conditions in the United States, and that he would communicate again with Mr. Inouye as soon as the investigations had been completed.

  1. Appointed Counselor of Embassy in Japan.
  2. A.M. Fox, Director of Research, U. S. Tariff Commission.
  3. Roy Veatch, of the Office of the Economic Adviser.
  4. Not printed.