Foreign Relations of the United States Diplomatic Papers, 1941, The Far East, Volume IV

711.94/11–2141

Draft Document Prepared in the Division of Far Eastern Affairs

[Washington,] November 21, 1941.

Outline of Proposed Basis for Agreement Between the United States and Japan

Section I: Draft Mutual Declaration of Policy

The Government of the United States and the Government of Japan both being solicitous for the peace of the Pacific affirm that their national policies are directed toward lasting and extensive peace throughout the Pacific area, that they have no territorial designs in that area, that they have no intention of threatening other countries [Page 628] or of using military force aggressively against any neighboring nation, and that, accordingly, in their national policies they will actively support and give practical application to the following fundamental principles upon which their relations with each other and with all other governments are based:

(1): The principle of inviolability of territorial integrity and sovereignty of each and all nations.
(2): The principle of non-interference in the internal affairs of other countries.
(3): The principle of equality, including equality of commercial opportunity and treatment.
(4): The principle of reliance upon international cooperation and conciliation for the prevention and pacific settlement of controversies and for improvement of international conditions by peaceful methods and processes.

The Government of Japan and the Government of the United States have agreed that toward eliminating chronic political instability, preventing recurrent economic collapse, and providing a basis for peace, they will actively support and practically apply the following principles in their economic relations with each other and with other nations and peoples:

(1): The principle of non-discrimination in international commercial relations.
(2): The principle of international economic cooperation and abolition of extreme nationalism as expressed in excessive trade restrictions.
(3): The principle of non-discriminatory access by all nations to raw material supplies.
(4): The principle of full protection of the interests of consuming countries and populations as regards the operation of international commodity agreements.
(5): The principle of establishment of such institutions and arrangements of international finance as may lend aid to the essential enterprises and the continuous development of all countries, and may permit payments through processes of trade consonant with the welfare of all countries.

Section II: Steps to be Taken by the Government of the United States and by the Government of Japan, Respectively

The Government of the United States proposes to take steps as follows:

1.: To effect normal dispositions of American naval vessels now based on Hawaii, it being understood that this does not involve limiting in any way the freedom of action and of decision of the Government of the United States with regard to the disposition of naval forces of the United States.
2.: To negotiate a multilateral non-aggression pact with Japan, China, the British Empire, the Netherlands, Thailand and the Soviet Union.
3.: To suggest to the Chinese Government and to the Japanese Government that those Governments enter into peaceful negotiations with regard to the future status of Manchuria.
4.: To enter into negotiations with the British, Chinese, Dutch, Thai and Japanese Governments for the conclusion of an agreement whereunder each of the Governments would pledge itself to respect the territorial integrity of French Indochina and, in the event that there should develop a threat to the territorial integrity of Indochina, to enter into immediate consultation with a view to taking such measures as may be deemed necessary and advisable to meet the threat in question. Such agreement would provide also that each of the Governments party to the agreement would not seek or accept preferential treatment in its trade or economic relations with Indochina and would use its influence to obtain for each of the signatories equality of treatment in trade and commerce with French Indochina.
5.: To give up all extraterritorial rights in China, including rights and interests in and with regard to the International Settlements at Shanghai and Amoy, and rights under the Boxer Protocol of 1901.
: To endeavor to obtain the agreement of the British Government to give up British extraterritorial rights in China, including rights in international settlements and in concessions and under the Boxer Protocol of 1901.
6.: To enter into negotiations with Japan for the conclusion of a trade agreement between the two countries, based upon reciprocal most-favored-nation treatment and reduction of trade barriers by both countries, including an undertaking by the United States to bind raw silk on the free list.
7.: To agree upon a plan for the stabilization of the dollar-yen rate, with the allocation of funds up to $500,000,000 for this purpose, half supplied by Japan and half by the United States.
8.: To remove the freezing restrictions on Japanese funds in the United States.
9.: To take steps, upon the conclusion of this agreement and upon the signing of the multilateral nonaggression pact mentioned under item two above, directed toward termination of the Nine Power Treaty relating to Principles and Policies concerning China signed at Washington, February 6, 1922.

The Government of Japan proposes to take steps as follows:

1.: To withdraw all military, naval, air and police forces from China (excluding Manchuria—see separate provision A–3) and from Indochina.
2.: To withdraw all support—military, political, economic—from any government or regime in China other than the National Government of the Republic of China with capital temporarily at Chungking.
3.: To give up all extraterritorial rights in China, including rights in international settlements and concessions and rights under the Boxer Protocol.
4.: To enter into discussions with the United States with a view to effecting mutually satisfactory arrangements for the sale or chartering to the United States of such tonnage of Japanese merchant shipping as may be agreed upon; also, for the construction under contract in Japanese shipyards for the United States of vessels, on a cost-plus-twenty-percent basis or such other basis as may be mutually agreeable, it being understood that the United States will sell Japan such raw materials as it may be necessary for Japan to import for these purposes.
5.: To negotiate a multilateral non-aggression pact with the United States, China, the British Empire, the Netherlands, Thailand and the Soviet Union.
6.: To remove the freezing restrictions on American funds in Japan.