893.51/67364/8
Memorandum by the Secretary of State49
The Treasury Department’s barter and credit proposal with regard to China is almost purely political. It would not be considered—certainly by Japan—as a mere commercial transaction, but as a transaction one of the major purposes of which would be to aid China in her military activities against Japan.
Naturally, all American Government officials are equally desirous of getting rid of surplus production and they are also equally anxious to see Japan defeated in her purpose by the exercise of force to dominate the Far East and repudiate and render inoperative the Nine Power Treaty. In these circumstances all of our Government officials, therefore, would be equally disposed to see this Government indulge in any word or act consistent with its situation and short of the serious risk of becoming involved as a party in the military [Page 575] conflict between China and Japan that would be calculated to discourage the Japanese military objective and to encourage Chinese military resistance.
Japan, viewing as she undoubtedly would the proposed transaction as one of definite aid to China in the fighting against Japan, would complain bitterly and charge the United States with having made itself a party to the conflict on the side of China. The military clique in control would map Japan’s actions in return and they would in all probability include increasing injuries to American citizens and American interests in China, and perhaps one or more methods of retaliation. This transaction and the incident relating to it when combined with other acts, which might follow, of injury and possible retaliation by Japan would result in a serious possibility of this country being drawn ultimately into the war, as stated.
If it is desired to go forward with these possible developments in view, then it would be all-important that the American people and the Congress be disposed and ready to support this new policy, and this would include the sending of the Navy farther beyond Hawaii than at any time in similar circumstances within recent years.
Great Britain and France are and for a time will be preoccupied with Western European exigencies. China is understood to have adequate military supplies for the next six to ten or twelve months. There would be time for further developments and their full consideration in the meantime.
I cannot in the light of all the foregoing, as well as numerous other pertinent facts and circumstances which I have not the time now to enumerate, either advise or concur in the course proposed.
- Submitted to President Roosevelt and the Secretary of the Treasury.↩