694.1115/10
Memorandum of Conversation, by the Assistant Chief of the Division of Far Eastern Affairs (Ballantine)
Mr. Powell of the Mesta Machine Company, Pittsburgh, Pennsylvania, stated that his firm did considerable business with Japan and “Manchukuo” in steel works equipment and that the firm was encountering stiff competition from German manufacturers as a consequence of the barter agreement for the exchange of soya beans in return for German products and as a result of the German Government’s assistance in other ways to German exporters. He felt that his firm could still compete because of the higher quality of the American products over the German if only our Government would support American business in the way that the German Government did. He expressed dissent with what he considered to be our policy of “antagonizing Japan”, as he believed that we should accept the fact that Japan was going to dominate the Far East. Mr. Powell said that he had not come to debate the wisdom of our policy, but that he should like information in regard to it which would be of assistance to him in shaping the company’s plans. He asked specifically about our attitude toward the recognition of “Manchukuo”, toward embargoes, and toward loans by the Reconstruction Finance Corporation to Japanese interests. He referred to the recent $25,000,000 credit extended to China by the Export-Import Bank48 and he asked what our attitude would be if a similar loan were to be requested by Japanese interests.
Mr. Ballantine denied that it was this Government’s policy to antagonize Japan. He said he knew of no action which this Government had taken in restricting shipments to Japan other than in connection with the voluntary restrictions by American manufacturers of airplane equipment, to which Mr. Powell had referred, and he said that the question of embargoes was, of course, a matter for Congress [Page 489] to determine. Mr. Ballantine said that our Government had not recognized “Manchukuo” and he briefly indicated our position on this matter. With regard to the question of loans by the Reconstruction Finance Corporation to Japanese interests, Mr. Ballantine said that he did not know that any proposal for such a loan had been made to the RFC49 and that, in any case, he could not undertake to speak for the RFC. Mr. Powell said that if credits by the Reconstruction Finance Corporation were extended to the Manchuria Heavy Industries Company, it would, of course, enable that company to place large orders with American firms and he would like to have Mr. Ballantine’s personal reaction as to what the attitude of this Government would be toward such a loan. Mr. Ballantine said again that he could not speak for the Reconstruction Finance Corporation, but he thought that if Mr. Powell would study our note to Japan of October 6, 1938, the Japanese Government’s reply of November 18, and our rejoinder of December 31[30],50 all of which have been published in the press, he would obtain an idea of the issues between the United States and Japan which would enable him to form his own estimate as to whether a proposal for such a loan, if made, would be affirmatively acted upon.
- See Foreign Relations, 1938, vol. iii, pp. 519 ff.↩
- Reconstruction Finance Corporation.↩
- Foreign Relations, Japan, 1931–1941, vol. i, pp. 785, 797, and 820.↩