Memorandum by Mr. Joseph W. Ballantine of the Division of Far Eastern Affairs of a Conversation With the Second Secretary of the Japanese Embassy (Hayama)

Mr. Hayama said that the Japanese Embassy had received this morning an instruction to the effect that the Japanese cotton textile group have fully approved the plan of entering into negotiations with the American textile group looking to the renewal in the form of a [Page 797] private agreement of the present Philippine textile agreement. He said that the Japanese group had appointed for this purpose a special committee distinct from the present joint committee concerned with the execution of the Murchison agreement. Mr. Hayama said (1) that the Japanese group desired that Osaka be the place of negotiations, (2) that if the American group was willing to go to Osaka to negotiate the Japanese group would endeavor voluntarily to control exports to the Philippine Islands after the lapse of the present agreement pending the conclusion of a new agreement to prevent unrestricted competition to the detriment of American cotton interests; and (3) that this proposal was subject to the understanding that in case any agreement is reached the American Government would take steps so that the Philippine Government would not increase duties or impose other restrictions upon Japanese textiles.

Mr. Ballantine said that he would refer Mr. Hayama’s proposals to the Department for its consideration.