893.515/1353: Telegram

The Ambassador in Japan (Grew) to the Secretary of State 59

53–61. Our 45, January 26, noon.60

The following is summary of a telegram from my British colleague to the British Foreign Office commenting on the latter’s telegram of January 23 to the British Embassy at Washington the substance of which has presumably been communicated to the Department61 [Page 498] with regard to the question of applying economic sanctions:
Although the telegram to Washington stresses the trade interests in China as the principal object of counter measures, Craigie feels that the main issue is far more important, there being at stake the whole political and economic future of countries with interests in the Pacific, along with the urgency of insuring the principle [of?] observance of treaty obligations. If those are the objectives, greater risks would be warranted than if the preservation of economic interests alone were sought. The establishment in the Far East of a totalitarian power is being helped by the British Empire and the United States by supply of necessary materials, and if they continue such supply tne process of establishment will soon have been completed.
The present is opportune moment for resolute action toward reducing purchases of Japanese merchandise and gold. It is possible that in a few months time the situation will have become less favorable. Craigie believes that the damping veto of fishery dispute with Soviet Russia is due to firmer attitude of the United States and Great Britain.
Craigie does not share the view that naturally purchases of materials through or directly from third countries would prejudice effectiveness of sanctions.
Craigie believes that widespread embargo would set in motion a process that would rapidly prove disastrous to Japan and that therefore there is strong probability that Japanese anticipation of increasing pressure would cause Japan to moderate her policy long before pressure reached its maximum effect. He does not believe that Japan could retaliate by making further reductions in imports from British areas without endangering her own economy and her continental policy. The object of limiting Japanese exports would be to prevent Japan from financing essential imports.
Craigie reaffirmed that a policy of counter measures should not be embarked on unless there is determination to pursue it if necessary to the end, but he believes that there is slight risk of eruptions if the matter is properly handled. Any risk involved would arise from possible irresponsible action by younger officers and reactionary elements rather than from any deliberate act by the Japanese Government, and then only if there were ill-timed publicity or other form of mishandling. Present Japanese policy is based on assumption, which is still held, that the United States and Great Britain will not take joint action. The problem would be to convince the Japanese Government that such action would be taken but without any overt or public threat. In this situation the saving of “face” is an all important factor (end of summary of Craigie’s analysis).
For over a year Craigie has urged me to recommend to my Government that the United States and Great Britain jointly apply sanctions in order to safeguard their economic and political interests in the Far East, and I have consistently taken the position that I would not recommend such measures unless our Government were prepared in the last resort to adopt measures of force. Craigie has until [Page 499] very recently stressed the importance of safeguarding our respective economic interests in China and political interests in the Far East, and I have taken and still take the view that the United States is both politically and economically not involved in the Far East to the same degree and extent as is Great Britain and that notwithstanding their common viewpoint with regard to the sanctity of treaties and other principles of policy, it does not necessarily follow that the United States should also apply corrective measures with all the attendant risks: that was a question which could be resolved by my Government in the light of the desires and restraints of the American people.
As will be noted from sub-paragraph (a), paragraph 1 above, Craigie now accords first importance to safeguarding the economic and political future of countries with interests in the Pacific and to maintaining the principle of the sanctity of treaties, the conserving of economic interests in China being relegated to a secondary position. He feels that there has now been indicated a solid and sound basis for Anglo-American joint action. I have told Craigie that, in my view, the American people are now in process of making up their minds on the question whether or not they wish to join with the other democratic nations in a concerted and positive effort to maintain the sanctity of treaties and avert a future danger; that whatever decision my Government may take will be formulated in the light of dominant American public opinion; and that, having in mind the bearing on this question also of [considerations] arising in Europe, with which I am not intimately familiar and which are not within the compass of my duties, any recommendation from me one way or the other would be out of place. Nevertheless I have also told Craigie that I am keenly aware of the importance of my appraisal of the question whether economic sanctions would be effective, and that I hope to be in a position shortly to advise my Government in that regard.
As stated in our 48, January 27, 6 p.m.,62 we are now studying the question of the possible effects of sanctions, and I wish to reserve my considered observations on Craigie’s comments. I should however make brief references to the following points:
Adverse predictions concerning Japan’s economic future which have been freely made during the past few years, to which we have not subscribed, have not been substantially borne out. Craigie has modified his view in this respect but holds that loss to Japan of American and British markets with consequent restriction of power to purchase essential materials would have a paralyzing effect on Japan’s economy. Naturally I prefer to be guided by the results of our studies before expressing myself on this point.
I do not subscribe to the premise and therefore to the conclusion that, because Japan’s continental policy is based on assumption that there will be no joint Anglo-American action, an anticipation of increasing pressure would bring about moderation of her policy, if by moderation is meant a change in attitude which would substantially constitute respect for her treaty obligations.
I do not follow Graigie’s arguments on the matter of saving face. Face saving procedures or formulas are not, in my opinion, likely materially to alter the course of events in this case.
It will be noted that Craigie now shares my view, subject to his comment as above outlined, that economic sanctions should not be resorted to unless there is intention to resort if necessary in the last analysis to force.
In summary, my present thoughts with regard to Craigie’s analysis run somewhat as follows:
Confidential communication to the Japanese Government that the United States and Great Britain, acting in concert, had definitely determined to apply economic sanctions might conceivably bring about some moderation of Japanese restrictions on foreign interests in China, but no Japanese Government could agree to an appreciable return towards the status quo ante and British policy;
In any event, ill-timed publicity would be almost certain to occur, and such publicity, in the present temper of the Japanese public, especially the military; would inflame this country and would cause the gravest risk of serious incidents which, in themselves, might render recourse to force unavoidable;
To threaten sanctions and to fail to carry them through would be an act of the utmost shortsightedness, ruinous to our prestige and influence in the Far East.
It is true that the actual application of effective economic sanctions by the United States and Great Britain would eventually exert powerful restraint on the Japanese military and political program in China, but we are not convinced that such restraint could be made effective for a considerable period of time. In the meantime the risks mentioned in paragraph (b) would progressively increase.
My despatch 359163 discussing this general subject should reach the Department in a few days. Another despatch64 endeavoring further to analyze the practical effect of economic sanctions on Japan is now in course of preparation and will go forward in the next pouch on February 16. I know only through my British colleague that this subject is now being discussed in Washington but in view of this knowledge and the fact that the subject is also at present being given intensive consideration here (see our 51, January 30, 9 p.m.) it appears desirable to send the foregoing comments by cable rather than by mail.

No repetition.

  1. The nine sections of this message, transmitted as telegrams Nos. 53–61, are printed as one document.
  2. Not printed.
  3. See British aide-mémoire of January 25, p. 490.
  4. Not printed.
  5. Dated January 7, p. 478.
  6. No. 3679, February 14, not printed.