Memorandum of Conversation, by the Ambassador in Japan (Grew)42
The British Ambassador43 called on me today and said that after conference with representatives of the British perpetual leaseholders in Kobe, he had obtained their reluctant consent to propose to the Japanese Government that the perpetual leases be terminated at the end of a period of five years dating from April, 1937. Sir Robert said that he was to see the Minister for Foreign Affairs tomorrow and would present to Mr. Arita a note, a copy of which he would send to me, proposing this solution of the case. Sir Robert said he was aware that our policy had been to let the American perpetual leaseholders deal directly with the Japanese Government and that our Government had taken no official action. He hoped, however, that we might now see our way clear to taking official action along the lines of his own proposal. I replied that we had purposely abstained from official action in order not to embarrass or complicate his own negotiations, but now that a definite proposal was in sight, I would submit the matter to our own perpetual leaseholders and would then take it up with Washington. I said that I thought the five year period was a reasonable solution of the matter, particularly as the system of perpetual leases is an anachronism in modern international relations. Sir Robert concurred and said that no international agreement involving rights in perpetuity could be expected to stand.