811.20 Defense (M)/1996
The Commercial Attaché in Japan (Williams) to the Ambassador in Japan (Grew)60
On April 21st, at the special request of Mr. T. Horiguchi of the Ministry of Finance, I attended another meeting61 at the Ministry in connection with the tungsten matter—at the meeting the following were present:—
- Mr. Horiguchi, Chief of the Foreign Exchange Control Bureau, Ministry of Finance
- Lt. Gen. Ryukichi Tanaka; two other Army Officers
- Mr. Madokoro and an associate, of the Nishikawa Company
- Mr. F. S. Williams, Commercial Attaché, and
- Mr. John K. Emmerson, Secretary of Embassy, as interpreter
Inasmuch as Mr. Emmerson acted as interpreter and most of the conversation was in the Japanese language, I asked Mr. Emmerson to prepare a memorandum covering these conversations. His memorandum follows:—
Mr. Horiguchi first summarized the discussion at the previous conference participated in by Mr. Williams and representatives of the Army. He stated that the Japanese Government in considering the granting of a permit for the exportation of 1,000 tons of tungsten to the United States desired to obtain from the State Department some indication of the attitude of the American Government toward the granting of permits for exports of such articles as cobalt, nickel, high octane gasoline, etc. Mr. Emmerson explained in Japanese the substance of the memorandum prepared by Mr. Williams,62 stating in effect that the United States Government was not prepared to enter into a discussion regarding any barter arrangements involving Japanese exports of tungsten and American exports of nickel, cobalt and other commodities placed under the licensing system. The American Government regarded the contract entered into by Nishikawa and the American concern as purely a commercial transaction.
[Page 812]Mr. Horiguchi then stated that he had no intention of suggesting any sort of political agreement between the two nations of the nature, for example, of the recent loan agreement made between Chiang Kaishek’s63 Government and the United States. He desired to treat the case of Nishikawa’s export of 1,000 tons of tungsten as a purely commercial transaction. However, since the export of tungsten required the permission of the Japanese Government, before making a decision on this particular case the Government wished to know as a matter of reference what general attitude would be taken by the American Government toward the export of commodities to Japan which are under the licensing system. If an expression from the State Department regarding such a general policy could be obtained it would be helpful, he stated, in enabling Japanese Government to arrive at a decision regarding the granting of export permits such as in the case of the tungsten.
Mr. Williams stated that it would be very difficult for the American Government to give any indication of a general policy in such matters since permits for exports of commodities placed under the license system must, of course, be granted or refused on the merits of each individual case. In deciding each case the Government must of necessity take into consideration the matter of supply and demand, transportation facilities and other conditions which vary from time to time. Therefore, he was convinced that the United States Government would not give any expression of a general policy which might apply to the export of these commodities considered essential to national defense.
Mr. Horiguchi stated that he understood this attitude. He wondered whether a “test case” might be made in which a Japanese firm would apply for a permit for the export of certain commodities to Japan. It was explained to Mr. Horiguchi that “test case” was not an accurate term since a decision granted in one instance would have no influence or bearing upon a decision granted some other time since conditions might be completely different. The Army officials and representatives of Nishikawa agreed that they understood this point and the Army officials suggested to the Mshikawa representative that it might be advisable to make application for a permit to export some of these licensed commodities from the United States. Lt. Gen. Tanaka then launched into a discussion of China’s tungsten resources. He wished Mr. Williams to be assured first, that the 1,000 tons in question were actually in existence and available for shipment. He stated that before the China Incident64 China had furnished 80 per cent of the world’s supply of tungsten and that considerable quantities were [Page 813] now available for export. Large resources were available in Kiangsi Province and the ore was being assembled by Chinese coolie labor. There are considerable supplies both in Shanghai and Canton. He stated that the annual production of tungsten had been 60,000 tons. Japan, he said, does not need large quantities of tungsten at the present time and for this reason it is available for export. Mr. Williams was questioned as to whether America was not buying large supplies of tungsten at the present time. He replied that the United States was buying tungsten.
During the discussion Mr. Horiguchi admitted that there had been a misunderstanding regarding the necessity for obtaining a Government permit for the shipment of 1,000 tons and that the American company had not been informed of the necessity for such a permit. He concluded by reiterating the understanding that transactions in these commodities would be on a purely commercial basis and that Japan would have the right to grant or refuse permits just as the American Government possessed the right in regard to licensed commodities. He stated that the Japanese Government was still considering the matter of granting a permit for the export of the 1,000 tons in question.
- Copy transmitted to the Department by the Ambassador in covering despatch No. 5550, April 25; received May 16.↩
- Minutes of previous meeting not printed.↩
- Not printed.↩
- Generalissimo Chiang, President of the Chinese Executive Yuan (Premier).↩
- July 7, 1937, date of Marco Polo bridge clash outside Peiping.↩