893.154/301½
Memorandum by the Adviser on Political Relations (Hornbeck)13
Reference, my memorandum of conversation with the Chinese Ambassador on July 1214 and my memorandum of July 13 in continuation thereof.15
The British Government’s action in giving a promise to the Japanese Government to restrict traffic over the Burma road “temporarily” and in indicating to the Japanese Government that the British Government will use its influence toward bringing about negotiations for a settlement between Japan and China makes desirable, in fact highly advisable, an immediate review and analysis by this Government of the Far Eastern situation and of possible action, either positive or negative, which should be taken at this stage by this Government.
The situation in the Far East becomes more serious. Further evidence having been given of Great Britain’s incapacity to maintain her position, defend her rights, fulfill her obligations to third parties, et cetera, Japanese morale becomes strengthened and Chinese morale becomes more susceptible of being undermined. The British decision [Page 584] may be regarded as a new step in a diplomatic “rear guard” action. It involves, however, a yielding of ground. It diminishes China’s capacity to resist and it weakens the common front of the powers that are on the defensive, including the United States.
Question arises what action the United States should take in the presence of this new development.
There are open to the United States several possible courses:
- 1.
- Do nothing and say nothing.
- 2.
- Say something but take no other action.
- 3.
- Say something and take some positive action.
- 4.
- Say nothing but take some positive action.
- 5.
- In the field of positive action there are several
possibilities:
- (a)
- Place new prohibitions, under the aegis of the Defense Act, upon exports of sundry items to Japan.
- (b)
- Move toward “embargo” legislation.
- (c)
- Increase customs duties, under existing legislation, upon sundry imports from Japan.
- (d)
- Resort to various possible practices in the administrative field of sundry types of retaliation.
It will be recalled that some months ago when the French gave signs of intention to close the Indochina railway to imports destined for China, the American Government gave to both the French and the Japanese Governments informally certain indications of the displeasure of this Government at that prospect. Question arises whether we should let the present British-Japanese action pass without the giving of some similar indications on our part.
We have already indicated to the British Government that we are not in position to use armed force toward influencing the situation and developments in the Far East and that we are not prepared to participate in an effort to induce (persuade or compel) the Chinese to negotiate, with a prospect of concessions on China’s part only, with the Japanese. At the same time, we have said to the British that if they wish to explore the possibilities of there being brought about between the Chinese and the Japanese a settlement we have no objection. (There need be no doubt but that the British will represent to both the Japanese and the Chinese that the American Government has given a blessing to the British idea of trying to bring about a Chinese-Japanese negotiation for a settlement.)
I suggest for consideration as a possible line for immediate action the following:
(1) Simultaneous communications to the Japanese and the British Governments, on the model of the action which we took when the French gave signs of intention to close the Indochina railway, calling attention to our interest and our rights; and (2) As soon as there appears evidence that American trade is in fact being interfered with [Page 585] by the closing of the Burma road, some form of retaliation in application to trade between the United States and Japan and perhaps the same for trade between the United States and Great Britain. (In the case of Japan, I would suggest that the form to be considered should be that of placing obstacles in the way of Japanese imports into the United States.)