761.94/1325: Telegram
The Ambassador in the Soviet Union (Steinhardt) to the Secretary of State
[Received 7:20 p.m.]
1051. The Japanese Ambassador told me this morning that his negotiations with the Soviet authorities looking towards a trade agreement and a permanent fisheries convention continue to be “deadlocked.” He said that in addition to their repeated demands for rubber, the Soviet authorities now insist that Japan make substantial purchases in North and South America for Soviet account, pointing out that the United States and other countries of the Western Hemisphere would more likely hesitate to refuse sales to Japan than to the Soviet Union. He added that the Soviet demands particularly [Page 973] in respect of rubber, tin, and copper were so excessive that up to the present his Government could not see its way clear to meet them. He also said that the conferences to fix the permanent boundary between Manchukuo and Outer Mongolia were nearly finished and that conversations will shortly begin to fix the permanent border between Manchukuo and the Soviet Union particularly with respect to the question of the ownership of certain islands in the Amur River which has long been a source of conflict between the two Governments.
With respect to Soviet-Japanese relations in general, he said there had been no marked improvement in these relations since the pact of neutrality with the possible exception of a more reasonable attitude by the Soviets in connection with the demarcation of frontiers.
The Ambassador said that based on his general observations and talks with Axis diplomats and members of the Soviet Government, he does not anticipate a German attack on the Soviet Union this summer although he is aware of the fact that his colleague in Berlin does not share this view and that preparations have been made by the Germans to carry out such an attack and by the Soviets to resist it. Speaking as an army officer, he gave it as his opinion that the Soviet Army is not capable of any real resistance to Germany and that the conquest of such areas in the western part of the Soviet Union as Germany might undertake would be a comparatively simple matter although he expressed some doubt as to the ability of the Germans to translate any such conquest into economic or other advantages greater than those now flowing from Soviet cooperation.
Tatekawa likewise stated that he understood that the British are about to take steps to interfere with Japanese whaling operations in order to prevent the continued shipment of whale oil to Germany over the Trans-Siberian.
Repeated to Tokyo.