811.20 (D) Regulations/308
Memorandum of Conversation, by the Chief of the Division of Far Eastern Affairs (Hamilton)
| Participants: | Mr. Harriman and |
| Mr. Britton of the National Defense Council | |
| Mr. Hawkins26 | |
| Mr. Feis | |
| Mr. Schnee27 | |
| Mr. Hamilton |
Mr. Hawkins arranged for Mr. Harriman and Mr. Britton of the National Defense Council to call on Mr. Feis with reference to certain problems relating to the export of machine tools to Japan. Mr. Feis asked Mr. Hamilton and Mr. Schnee to be present.
Mr. Harriman and Mr. Britton said that, while the National Defense [Page 594] Act authorized the American Government to prohibit exportation of any machine tools which were needed for defense purposes, the act as it now stood provided no means whereby the Government could force a foreign owner of machine tools to sell those tools to the Government. They explained that an amendment to take care of this situation had been drafted and was under active consideration. They said that in the meantime they were confronted with a situation relating to Japan whereunder certain categories of machine tools which Japanese agents in this country had purchased were needed for defense purposes but there seemed to be no way in which they could cause the interested Japanese purchasers in this country to transfer title to the machine tools in question. They said that the Japanese interests involved had said that they might seek to sell these machine tools at a premium here in the United States and they remarked that other foreign purchasers of certain categories of machine tools export of which had been forbidden had already endeavored to sell these commodities in job lots in the United States. They said that the Japanese purchasers in this country had approached them and had intimated that, if they (the Japanese purchasers) could sit around a table with members of the Defense Council and discuss the matter as businessman to businessman, a satisfactory arrangement could probably be worked out whereby the Japanese would agree to transfer title to certain categories of machine tools especially needed in this country for defense purposes and the Defense Council would in turn agree to release for export various other categories of machine tools which the Japanese had purchased and which they desire to have exported as soon as practicable to Japan. They said that they had made an appointment for this afternoon with a representative of one of the Japanese firms concerned to discuss the matter with him.
There followed some general discussion of the situation during which both Mr. Feis and Mr. Hamilton emphasized that in their judgment it was unwise from several points of view for members of the Defense Council to discuss matters with members of foreign firms and to endeavor to negotiate or bargain or make a deal with such representatives. It seemed to be agreed by all that the proper remedy was to be found by seeking amendatory legislation. Mr. Hamilton referred to the fact that the Japanese Embassy had already approached us a number of times with a view to there being expedited the segregation of what machine tools were needed and what machine tools were not needed for defense purposes so that exportation of those categories not needed might be carried out promptly. Mr. Hamilton thought that, in view of these approaches by the Japanese Embassy, we might, should the Defense Council care to give us a list of those categories of machine tools which it needed and those categories of machine tools which it would be prepared to have exported, present [Page 595] the list to the Japanese Embassy and see whether the Japanese Embassy would be prepared to cause Japanese exporters to transfer their titles to categories of machine tools needed for defense purposes. It was suggested further that Mr. Harriman and Mr. Britton might inform the representative of the Japanese firm who was due to call this afternoon that upon consideration of the matter the Defense Council had reached the conclusion that this subject was appropriately one for presentation by the Japanese Embassy to the Department of State.
Mr. Feis and Mr. Hamilton said that, while the foregoing represented their views, they would wish, if possible, to report to Mr. Welles with a view to obtaining his approval.
Subsequently, Mr. Feis and Mr. Hamilton called on Mr. Welles and explained to him the situation as outlined above and the views which they had expressed to Mr. Harriman and Mr. Britton. Mr. Welles expressed agreement.
Mr. Hamilton thereafter telephoned Mr. Britton and confirmed to him the views previously expressed at the conference in Mr. Feis’ office. Mr. Britton said that he would inform the representative of the Japanese firm that this was a matter to be taken up by the Japanese Embassy with the Department of State. He said also that he had already taken steps toward having prepared a list of the categories of machine tools which they needed for defense purposes and a list of the categories of machine tools which they did not need for such purposes.
I asked Mr. Britton to be so good as to inform Mr. Feis as soon as practicable of developments relating to the question of amendatory legislation. Mr. Britton said that he would do this.