894.51/652
Memorandum of Conversation, by the Assistant Chief of the Division of Far Eastern Affairs (Ballantine)
| Participants: | Mr. F. J. Hellman, Vice President, Wells Fargo Bank and Union Trust Company, San Francisco |
| Mr. Hamilton | |
| Mr. Ballantine |
Mr. Hellman stated that his company has been extending commercial credits to Japanese banks, principally the Bank of Chosen and the First Bank, in connection with exports of California products to Japan, principally rayon pulp. He said that these credits are principally for periods of ninety days, but latterly a number of them have been for six months, and that they are secured by Japanese dollar bonds in the United States. Mr. Hellman explained that, so far as he knew, other American banks had discontinued granting such credits in 1931, following the Mukden incident, and that his bank was the only one that was continuing in this practice; that as a result of the policy of the bank it enjoyed considerable good will among the Japanese, and Californian exporters were enabled to do a volume of profitable business. Mr. Hellman inquired whether, as a consequence of our notification of desire to terminate the commercial treaty,28 there was any reason why the bank should alter its policy in respect to these credits.
Mr. Hellman was reminded, in reply, of the action taken by the Department of Commerce last year in advising American exporters, in view of the exchange control policies adopted by Japan which had resulted in freezing in Japan large amounts of funds due to American firms, to restrict transactions to those on a fully secured basis. He was told that, while there was no law or regulation which prohibited or restricted American banks in the matter of loans and credits to Japan, the Department had, when approached on this question by American businessmen, expressed the hope that American business would be guided by consideration of the effect upon American interests in general in the Far East of the granting of such credits, having in mind Japanese policies and actions, and looking at the question from a long-range point of view. Mr. Hellman was informed [Page 546] that the Department had not undertaken to define the range within which short-term commercial credits might not be objectionable but that it was our understanding that the general tendency not only in this country but in certain other countries was to shorten the term of any such commercial credits. It was indicated to Mr. Hellman that this development was in line with the attitude which the Department hoped would be followed by American businessmen and bankers. It was also pointed out to Mr. Hellman that this question was entirely independent of the question of the forthcoming termination of the commercial treaty with Japan of 1911. Mr. Hellman was asked to regard this expression of views on the question of extending credits as confidential.