The British Embassy to the Department of State


Reference is made to the final paragraph of the State Department’s Aide-Mémoire of the 9th November, 193836 regarding the steps taken by His Majesty’s Government in the United Kingdom towards restricting the export of armaments and the supply of credit facilities to Japan.

Out of eight licences issued by His Majesty’s Government, only six licences, to a value of £86,787. 10s., have been used for the export of war material to Japan since the beginning of hostilities. None of these licences were for the export of aircraft. The total value of arms, munitions, and naval stores exported from the United Kingdom to Japan from 1st July, 1937, to 31st October, 1938, including those licenced before the outbreak of hostilities and including sporting arms and ammunition, was £129,107. In certain cases firms have been [Page 737] discouraged from accepting arms orders from Japan although this was not justified by the exigencies of British re-armament.

Although no action has been taken to discourage the export of steel to Japan, the total quantity of iron and steel exports for the first ten months of 1938 was only 6,700 tons, as compared with 39,500 tons in the corresponding period of 1937.

His Majesty’s Government understand that since December, 1937, all British financial institutions concerned have been gradually and spontaneously reducing the supply of short-term credit facilities to Japan, and there therefore remains no scope for effective action by His Majesty’s Government in this field. Furthermore, even if all their present credit facilities in London were withdrawn, the Japanese could fill the gap by the use of their existing sterling resources, which cannot be prevented in time of peace.