Memorandum of Conversation, by the Assistant Chief of the Division of Far Eastern Affairs (Ballantine)

Participants: Mr. Sayre34
Mr. Hiss35
Mr. Suma, Counselor of the Japanese Embassy
Mr. Ballantine

Mr. Sayre, in outlining to Mr. Suma the attitude of our Government toward the question of renewal of the existing agreement relating to the importation of Japanese cotton piece goods into the Philippines, said that we were now confronted with the possibility of going before Congress during its forthcoming session in connection with recommendations for legislation to carry out the recommendations of the Joint Preparatory Committee. Accordingly, while this Government [Page 624] would like to renew the existing agreement for an additional period of one year, we had felt that it would be desirable to have renewal take a form somewhat different from that in which it was renewed last year. Mr. Sayre handed Mr. Suma a draft of a proposed note from the Department to the Japanese Embassy and a draft of an acknowledgment by the Japanese Embassy thereto. Mr. Sayre explained that this form of renewal took into account the difference in the positions of the two Governments with regard to the question of transshipments, our Government having contended from the first that the quota included transshipments through intermediate ports, whereas the Japanese Government notwithstanding its understanding of our position had indicated that it could not publicly acknowledge that the quota included transshipments. Mr. Sayre also explained that the only other essential feature in which the new proposed form differed from the old was the division of the quota into four quarterly periods which had been designed with a view to avoiding possible embarrassment should the Department have occasion to go before Congress in regard to the matter.

Mr. Suma expressed his first-hand reaction that the present proposal would be regarded by the Japanese exporters as denoting suspicion on our part of Japan’s good faith in this matter. Mr. Sayre and Mr. Ballantine then went over the ground again with Mr. Suma to make clear that the suggested form of renewal had not been prompted by any suspicion of Japan’s good faith, and Mr. Suma was apparently satisfied with our explanation.

Mr. Sayre then requested that Mr. Suma refer the two drafts to the Japanese Government and made it quite clear that if the Japanese Government wished to offer any counter-suggestions or changes we would be quite prepared to consider them. He said that we had no wish to close any doors. Mr. Suma said that he would refer the two drafts to his Government and would expect a reply at an early date.36 Copies of the drafts which were handed to Mr. Suma are attached hereto.37

  1. Francis B. Sayre, Assistant Secretary of State.
  2. Alger Hiss, Assistant to Assistant Secretary Sayre.
  3. Further discussion followed on July 14, 18, and 20.
  4. Not printed.