661.9431/29: Telegram
The Ambassador in the Soviet Union (Steinhardt) to the Secretary of State
[Received 3:05 p.m.]
791. With respect to the Soviet-Japanese trade negotiations which he does not expect to be completed for another 2 or 3 weeks, the Japanese Ambassador told me last night that the Soviets were to deliver to Japan relatively small quantities of oil and also manganese and platinum and had agreed to take one million yen worth of silk. He said that the Soviet officials had irritated him by continuing at each meeting to press him for rubber and tin which he had repeatedly told them were not available to Japan for export. The Japanese have, however, he said, agreed in principle to purchase copper in Chile for delivery to the Soviets “who are to keep part and deliver part to Germany”.
As the Japanese desire many articles that the Soviets can deliver and have little to offer in exchange which the Soviets wish, discussions are now proceeding on the basis that the Japanese will endeavor to make purchases for Soviet account in the southern Pacific area and the Western Hemisphere which purchases the Soviets will finance if necessary. The Ambassador “believes” that some of these purchases when made will be for delivery to Germany by the Soviets as he said “we (Japan) have for some time been making substantial purchases for Germany and shipping these through the Soviet Union”.
He said that virtually the entire Far Eastern soy bean crop was being sought by Germany either in the bean or preferably, wherever possible, processed into oil.
In connection with the fisheries negotiations, the Ambassador said that having agreed to a 20 percent increase in rentals on fishing lots [Page 957] for 1940 as against 1939 (see my 125, January 21, 8 p.m.71), the Soviets were now demanding a 100 percent increase over the present lot rentals as a condition to the conclusion of a long term fisheries convention. He remarked that as the principal market in the past for Japanese canned fish had been the British Empire which market was now almost nonexistent and as the Japanese ate principally fresh fish, he did not see how the Japanese could pay such rentals as they would in such case forfeit their competitive position in the world market.
Repeated to Tokyo.
- Not printed.↩