Office of the Historian

893.24/790: Telegram

The Ambassador in Japan (Grew) to the Secretary of State

Tokyo, July 16, 1940—4 p.m.
[Received July 16—10:38 a.m.]

583. 1. In conversation with the Counselor85 on July 13 the British Ambassador stated “it was hoped” the 3 months during which traffic over the Burma route would be suspended would provide an opportunity [Page 50] for bringing out a general settlement of Far Eastern problems. He said that he was then preparing a plan of settlement which he would shortly lay before his Government and would make available to me a copy of his as soon as it was telegraphed to London. He has today sent me a copy of a telegram which he sent to London on July 14. The salient features of this plan are as follows:

(a)
The underlying idea of any adjustment of the conflict between Japan and China should be that the powers having possessions in the East should be prepared to make certain concessions to Japan as a means of purchasing a generous peace for China;
(b)
In considering the nature of the inducements which should be offered Japan, consideration should be given to the grievances harbored by Japan, the most important of which are (1): Rejection of racial equality at Versailles,86 American attitude toward Japanese immigration;87 (2) British Empire preferential duties, quotas, and other measures restricting Japanese exports; (3) refusal by the United States and Great Britain to grant credits for purchases by Japan of primary commodities, and covert threats by those countries of embargoes against Japan.88
(c)
Rather than territorial gains Japan wants privileges which would give her approximately as much economic advantage as would territorial sovereignty. She is likely to require: (1) some arrangement approximating free trade, an arrangement which would guarantee to Japan at all times an adequate share of the materials produced in the Netherlands East Indies, Indo-China, and possibly other regions in the south seas and a corresponding market for Japanese exports; (2) immigration quota into the United States and British territories and a liberal policy in respect of the entry and residence of Japanese subjects in Netherlands East Indies and French Indo-China; (3) concessions for the exploitation of raw materials in the Indies and Indo-China; (4) tariff and quota concessions to Japanese goods in American and British territories; (5) credits for the financing of essential imports into Japan (particularly during the transition stages as Japan moves away from a closed economy within the yen bloc to a policy of normal interchange of goods with foreign countries).
(d)
The implementation of any such plan as that above outlined would obviously require the participation of the United States and of certain other countries.

2. The British Ambassador discusses in the same telegram the question of political stabilization of the Pacific area. He expressed doubt whether any non-fortification agreement would be desirable or feasible without simultaneous agreement on limitation of naval armament. He does not believe that Japan would enter into an agreement with regard [Page 51] to the status quo of the Netherlands East Indies as an isolated arrangement, but he suggests the desirability of incorporating into bilateral agreements with Japan, as part of the general plan of settlement above outlined of Far Eastern questions, the various unilateral declarations which have been made with regard to the status quo of the Netherlands East Indies, these bilateral agreements with Japan to apply to other territorial [holdings?] in Asia of the United States and of European powers.

3. There is internal evidence in the British Ambassador’s telegram under reference that the telegram is responsive to certain queries put to him by his Government. We assume that Sir Robert’s plan flows out of the statement which the Secretary is reported to have made on June 28 to Lord Lothian that the American Government would be prepared to study proposals for peace formulated by the British Government which would not represent a compromise at the expense of China.89

Grew
  1. Eugene H. Dooman.↩
  2. See statement by Baron Makino, Japanese plenipotentiary delegate to the Paris Peace Conference, on April 28, 1919, Foreign Relations, The Paris Peace Conference, 1919, vol. iii, p. 289; cf. discussion of the Council of Four (Japan not being present), April 28, 1919, ibid., vol. v, p. 317 (Mr. Balfour’s report of conversations with Japanese delegates).↩
  3. See Foreign Relations, 1924, vol. ii, pp. 333 ff.↩
  4. Cf. pp. 565 ff.; also Foreign Relations, 1939, vol. iii, pp. 475 ff.↩
  5. See memorandum by the Secretary of State, June 28, p. 369.↩