811.20 (D) Regulations/383
Memorandum of Conversation, by the Adviser on Political Relations (Hornbeck)
At the conclusion of a conversation held this morning in Mr. Morgenthau’s34 office in which Mr. Morgenthau, Mr. T. V. Soong,35 and Messrs. Cochran,36 White37 and Hornbeck participated (see separate memorandum)38, Mr. Morgenthau asked me to remain with him.
Mr. Morgenthau said that he was interested in and concerned about the question of embargoes upon exports of petroleum to Japan: he hoped to have the embargo made more extensive than it now is. He asked for my views on the subject. I replied that in my opinion the problem of petroleum embargoes is full of difficult angles; that there would seem to be very good reasons for not attempting to prevent exports of crude oil; that in any consideration of the question of embargoes account must be taken of the fact that not one only but several effects flow from the exportation or non-exportation of a given commodity or group of commodities. Mr. Morgenthau asked whether I thought that, if our petroleum embargo were made more extensive [Page 598] Japan would take drastic action against us or move toward forceful seizure of the Netherlands East Indies. I replied that Japan could purchase ample supplies of crude oil from outside the United States, even from the Netherlands East Indies; that an embargo by us on crude oil would not materially hurt her; that she is in no position deliberately to challenge us; that I have all along believed that her policy and action with regard to a possible attack upon the Netherlands East Indies will be on the side of caution pending clarification of the situation in Europe; and that, not desperately needing petroleum at this time, she would not proceed toward seizure of the Netherlands East Indies, with the exposure of her naval position that would be required, merely because of an embargo by this country nor would she act drastically against us. Mr. Morgenthau said that such was also his view. I referred again to the fact that Japan can get plenty of petroleum from sources outside of—and not under control of—the United States.
There followed some discussion of the subject of economic pressures.