811.20 (D) Regulations/989
Memorandum by the Chief of the Division of Far Eastern Affairs (Hamilton)58
Reference CO’s59 memorandum of September 28 in regard to the suggestion made in the Canadian Legation’s memorandum of September 2460 that certain revisions be made in the list of materials subject to export license in the United States and in Canada.
With special reference to exports to Japan the Canadian Legation draws attention to the fact that copper, lead, nickel, zinc and nickel scrap are in Canada subject to export license whereas these commodities are not subject to license in the United States. The Canadian Legation asks the reason for such exclusion.
Figures compiled by the Chinese Council for Economic Research in August of 1940 indicate that in 1939 the United States exported to Japan copper valued at $28,550,067 as against exports of Canada to Japan valued at $2,314,263. (The American share of total copper shipments to Japan is given as 92.19 percent as against 7.47 percent from Canada.)
The same source gives exports of lead from the United States to Japan in 1939 as valued at $2, 153,974 (33.83 percent of total shipments to Japan) as against shipments from Canada valued at $2,565,910 (40.29 percent of the total shipments). Same source states that in 1939, shipments of nickel from the United States were valued at $83,717 (less than 1 percent of the total) as against shipments from [Page 606] Canada to Japan valued at $8,442,613 (90.53 percent of the total). Shipments of zinc from the United States to Japan were valued at $237, 111 (5.37 percent of the total shipments to Japan) as against shipments from Canada to Japan valued at $1,222,945 (27.69 percent of the total). There does not seem to be available any recent figures in regard to the exports of nickel scrap from the United States and Canada. The Minerals Yearbook, 1938, shows, however, that the total production of secondary nickel (nickel recovered as metal and in non-ferrous alloys and salts) in 1937 was only 2,400 short tons valued at $1,680,000.
In effect the Canadian Legation’s memorandum under reference would seem to suggest that although the five items mentioned above are of special importance it might be advisable to revise the United States and Canadian lists of commodities subject to export license in such manner as to bring them into substantial accord and thus facilitate and make safe the prompt exchange between the two countries of such commodities as are subject to export control.
According to the Canadian Legation’s memorandum, “The Canadian export control system was designed, primarily, to prevent products of strategic importance, of which Canada was a significant supplier of world requirements, from reaching enemy destinations, directly or indirectly.”
It is the understanding of the Division of Far Eastern Affairs that thus far the system of export licenses of the United States Government is designed to conserve in the United States materials which the United States needs for use in the development of its defense program and has not up to this point specifically included stopping or restricting the export of materials of which we have a surplus in order that such materials may not reach and strengthen the potential enemies against whom our defense program is expected to afford protection.
If the Government of the United States should accede to the wishes of the Canadian Government in regard to bringing the restricted lists of the two countries into substantial accord it would seem that such action would have to be based not solely upon the need of the United States for the commodities in question but upon other and additional considerations.
The Division of Far Eastern Affairs feels that acquiescence in the suggestion made in the Canadian Legation’s memorandum would not (under existing circumstances) be feasible. The Division of Far Eastern Affairs believes, however, that it would not be politic to return a categorical “no” to the Canadian Legation and suggests that Mr. Dunn or other appropriate officer of the Department invite Mr. [Page 607] Mahoney, Commercial Counselor and Chargé d’Affaires ad interim of the Canadian Legation (as it is understood that Mr. Mahoney left the memorandum under reference at the Department) to call at the Department and make to him an oral statement along lines as follows:
Appropriate officers of the Department of State have read with much interest the memorandum of the Canadian Legation left at the Department by Mr. Mahoney on October 1 and the Department of State very much appreciates the action of the Canadian Government in making available to it the information contained in the memorandum in regard to Canadian export control practice.
So far as its general attitude in relation to Japan is concerned, this Government, as indicated by the Secretary of State to the British Ambassador recently,61 has pursued a definite and somewhat progressive course of acts and utterances in resisting Japanese aggression and treaty violations during recent years; these acts and utterances have comprised repeated aid to China, successive moral embargoes, abandonment of the American-Japanese commercial treaty, actual embargoes under law, the sending of our navy to Hawaii, together with appropriate statements and notes of strong remonstrance against Japanese steps of aggression and constant repetition of the basic principles of world order under law. Of course, the special desire or this Government is to see the British Empire succeed in the war and its acts and utterances with respect to the Pacific area would be more or less affected as to time and extent by the question of what course would, on the part of this Government, most effectively and legitimately aid Great Britain in winning the war.
With specific reference to the question of export control practice, it is noted that the Canadian export control system is designed, primarily, to prevent products of strategic importance, of which Canada is a significant supplier of world requirements, from reaching enemy destinations, directly or indirectly. The system of export licenses in effect in the United States has been thus far designed to conserve in the United States materials needed for the development of our defense program and this will explain the reasons for the omission from our restricted list of commodities which are considered to be available to this country in sufficient quantities without the imposition of export control.
This Government’s licensing system is of course not fixed in any hard and fast pattern and is under constant scrutiny with a view to effecting such changes therein as developments may require or render desirable It may be expected that as our defense program develops additions to and changes in our list of restricted commodities will be made from time to time.
This Government appreciates fully the desirability of friendly and frank cooperation with the Canadian Government in matters of common concern and is of course aware of the advantages that would accrue from substantially similar action in the matter of export control.
- In an attached memorandum of October 8, the Chief of the Division of Far Eastern Affairs (Hamilton) stated he had written this upon the basis of his impressions from the last large conference in the office of the Secretary of State. The Adviser on Political Relations (Hornbeck) added a notation as follows: “I favor (1) keeping more of essential commodities at home, and (2) cooperating with the Canadian Government when (if) they offer the opportunity and a common objective may be served.”↩
- Division of Controls.↩
- Neither printed.↩
- See memorandum of September 30, p. 159.↩