Memorandum by Mr. Roy Veatch of the Office of the Economic Adviser

Conversation: Mr. Sayre
Mr. Claudius T. Murchison, President, Cotton-Textile Institute
Mr. Fox, United States Tariff Commission
Mr. Dooman
Mr. Veatch

Mr. Murchison left copies96 of a press release of February 18, from the Cotton-Textile Institute, containing the full text of the “Memorandum of Understanding” between the Japanese and the American industries providing for voluntary limitation of shipments of Japanese textiles to the American market. He explained that this agreement had been approved by all of the Japanese textile associations concerned prior to February 15 so that the agreement is now definite and final.

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Mr. Sayre and the others present congratulated Mr. Murchison heartily upon the successful outcome of his mission. He in turn expressed his appreciation of the cooperation of this Government, and particularly of the splendid support and advice which his group had received from Ambassador Grew and the staff of the American Embassy in Tokyo. At the same time he gave much credit to the Japanese who had approached the entire matter sympathetically, and who, because of their frankness and goodwill had gained the confidence of the American group. He remarked particularly upon the action of the Japanese industry in refusing to accept orders from the United States after December 5, on which date it was definitely arranged that the American group should go to Japan.

Mr. Murchison requested the cooperation of the American Consulate General in Osaka in supplying statistics upon invoices of Japanese shipments of cotton piece goods to the United States in a manner similar to the way in which shipments of cotton floor-coverings are reported by the Consulate General in Kobe. Mr. Murchison was assured that such an arrangement could be made.

Mr. Murchison then explained one further request which he had to make of this Government. Two joint Japanese-American textile committees are to be set up, one in the United States, and one in Japan, to continue a study of the textile situation and to handle the negotiations for restriction agreements upon various textile specialties. There are no representatives of the American textile industry in Japan. Mr. Murchison suggested that it would be desirable therefore if either the American Consul General in Osaka (Mr. Cameron), or the Assistant Commercial Attaché in Tokyo (Mr. Steintorf) might serve as one of the two Americans on the committee. They may be able to fill the other position by a representative of the National City Bank in Osaka.

After discussion, it was agreed that it would be preferable for Mr. Steintorf to do this work since he would be more free to act in a private capacity than an American consular officer. Mr. Murchison intends to request the Department of Commerce to transfer Mr. Steintorf from Tokyo to Osaka for at least a year. If this is impossible, then it was felt that he might travel to Osaka for special meetings of the committee. Mr. Sayre and Mr. Dooman expressed their opinion that it would be desirable, and useful to the committee, for Mr. Cameron to sit in on the discussions without taking any official part in the work of the committee.

Mr. Murchison pointed out the fact that the agreement as signed provides for the explicit inclusion of transshipped goods in the quota [Page 789] limiting shipments to the United States. The American industry has promised to inform the Japanese industry of the volume and sources of transshipped goods which may arrive in this country, and to persuade the Merchants Associations in this country to refuse to handle such transshipped goods.

Mr. Murchison left with Mr. Sayre a copy of a telegram97 which he had received from Mr. Shoji, Chairman of the Japanese Textile Committee, the cable suggesting that this Government be requested to instruct the Consul General in Osaka to refuse visas for any invoices of textile exports to the United States which are not accompanied by a certificate of the Japanese committee controlling such exports. It was explained to Mr. Murchison that such action by American consular officers was prohibited by law, and it was agreed that this situation should be set forth in a letter to Mr. Murchison so that he might make an appropriate reply to Mr. Shoji’s cable.

Continuation of the Agreement Concerning Japanese Textiles in the Philippine Market

Mr. Murchison said that he had little opportunity to discuss the existing agreement affecting the Philippine market, but that he had gained the impression that the Japanese are discouraging all efforts to control the transshipment trade through Hong Kong. They admitted that their plan for control of this trade through the imposition of export fees on transshipped goods had not proven successful. In his opinion, the only way to handle this problem is for the Philippine Government to impose quotas upon the importation of cotton textiles from all foreign countries, the Japanese quota being set in conformity with the gentleman’s agreement. It was recognized that transshipments form a difficult problem, but Mr. Dooman felt that as a result of steps just taken the matter might be cleared up without the necessity of the imposition of quotas by the Philippine Government.

It was suggested that the textile industry might prefer to handle the Philippine arrangement through a private agreement rather than through the extension of the present governmental agreement, since the Japanese exporting to the Philippines are largely the same interests as those included in the private agreement affecting the American market. Mr. Murchison responded favorably to this suggestion and agreed to take the matter up with his colleagues.

  1. Not reprinted.
  2. Not found in Department files.