893.60 Manchuria/15
Memorandum of Conversation, by the Adviser on Political Relations (Hornbeck)
At Mr. Lamont’s32 request, I had a conversation with Mr. Lamont last evening at the Union Station, Washington, D. C. (See separate memorandum of conversation, of same date, on the subject of China consortium.33) One of the subjects which Mr. Lamont wished to discuss was that of a project with regard to which he had been informed for purchase by Japan from the United States Steel Company through the Guaranty Trust Company of $11,000,000 worth of steel for construction in “Manchukuo”.
Mr. Lamont said that he had been asked for his opinion with regard to this project. The Japanese were asking for steel to the value of $11,000,000, were ready to pay part cash and wanted part credit. He made the observation that the directors of a company have certain obligations to their stockholders and cannot lightly turn down an opportunity to do a profitable business. He said that the people who had consulted him were of the opinion that if they did not accept the business it would go to and be accepted by British and/or German and/or some other country’s producers. There was, he said, no law prohibiting such business; and, the American Government has not found that Japan is engaged in war. He, Mr. Lamont, had not felt that he could advise against the American interests concerned taking the business. He asked for my opinion.
I replied that I could give nothing but my own personal opinion—plus my personal estimate of the situation and some of its trends. I then mentioned the general attitude of the American people; the increasing demand that something be done toward putting a stop to what is called this country’s “assistance to Japan” through the supplying of materials which contribute to Japan’s military operations; the action which the Administration has taken in regard to export of airplanes;34 the outcry against export of scrap iron; etc. I made reference to the inquiries made by the Nye Committee sometime ago and the agitation which had led to the passage of the Neutrality Act;35 and to the decision which the du Pont Company had made that it would sell munitions neither to the Japanese nor to the Chinese. I said that to my knowledge there had been some discussion of possible persuasive action calling upon the people of the United States to [Page 483] refrain from making loans or giving credits to countries engaged in hostilities, or at least to one side. I mentioned the opinion held by some people that, unless American interests voluntarily curtail certain types of business with countries engaged in certain types of activities, there may come legislation prohibiting such business. Mr. Lamont said that he of course had most of those points in mind but that he felt that unless and until there was legislation on such subjects American interests engaged in legitimate business, when offered opportunities for trade—which, in turn, would make employment, etc., etc.,—should go ahead with business on a business basis.
I made the observation that all such matters need to be considered on the one hand in the light both of moral and of material considerations and on the other hand in the light both of short swing and long swing considerations. Mr. Lamont said that he quite agreed, but he indicated that he was not moved from the view that he could not advise the interests concerned in this project against accepting the business offered.36
- Thomas W. Lamont, of J. P. Morgan and Company, New York.↩
- Post, p. 721.↩
- See circular letter of July 1, 1938, Foreign Relations, Japan, 1931–1941, vol. ii, p. 201; cf. Foreign Relations, 1938, vol. iii, pp. 613 ff.↩
- Approved August 31, 1935, and amended February 29, 1936, and May 1, 1937; 49 Stat 1081, 1152, and 50 Stat. 121.↩
- On January 20 Mr. Lamont said the project had been sidetracked for the time being but might come up at a later date.↩