Government would not allow the destruction of a major American industry such as cotton textiles but reference was made to Dr. Murchison's opinion that much damage would be done to the American industry before Congress could be convinced that severe restrictions should be placed upon Japanese imports. The desirability of securing an amicable settlement of this problem before the American industry was greatly injured was stressed. Some members of the group expressed the opinion that an agreement between the American and the Japanese industries would serve only as a stop-gap or palliative, since the Japanese industry was likely to expand much further and the situation, therefore, probably would not remain static. Dr. Murchison was of the opinion, however, that an arrangement could be made with the Japanese industry to provide for a constant study and adjustment of the problems arising out of the competition between the two industries and that such an arrangement might be the best possible permanent answer to the problem.

The opinion was expressed that representatives of the two industries probably would find themselves some distance apart even after each group had made what it had considered in advance to be the greatest possible concessions. Probably the American group then would be faced with the necessity of offering to go halfway toward bridging the gap or of giving up the idea entirely. Mr. Fox suggested that the American group might be able to make attractive offers to the Japanese on a number of textiles other than cotton piece goods (for instance, cotton hosiery, underwear, bedspreads and chair coverings) since in a number of these lines Japanese competition is not yet severe. If the Japanese could be given an opportunity for expansion in other lines, they might be willing to restrict their shipments in such lines as cotton piece goods and cotton velveteens, which have already reached important proportions. Dr. Murchison stressed the desire of the industry to prevent the concentration of Japanese competition in any particular lines of American production. On this point it was felt that some arrangement might be reached with the Japanese providing that imports from Japan of any particular line or specialty should not exceed a certain percentage of the American production, say 10 percent. It was also felt that the American industry might avoid the appearance of proposing a static situation for Japanese goods in the American market by agreeing to an expansion of Japanese imports as American consumption might expand.

Some attention was given to the legal problems which might arise out of the efforts of the American industry to lead the Japanese industry to limit and regulate the export of cotton textiles to the United States, and perhaps the marketing of such textiles in the United States. Mr. Murchison mentioned the intention of the American group to

secure, if possible, an informal opinion from the Department of Justice before the departure for Japan. In the event that there is uncertainty regarding the legality of such an arrangement between the American and Japanese industries, Mr. Murchison wondered if the two Governments might not be able to set up the agreement themselves after the representatives of the two industries had prepared the groundwork. The officials of the American Government made no attempt to answer this inquiry categorically. They emphasized the hope that had been entertained in the Government that many problems of Japanese competition might be handled by agreements between the Japanese and American industries and that such an agreement on cotton textiles might serve as an encouraging precedent. It was recognized also that the Government itself might be open to attack, under the anti-trust legislation, if it sought restrictive action by the Japanese. The attitude of the Government, as well as the plans of the textile group visiting Japan, clearly were dependent upon advice as to the legal questions involved.

Dr. Murchison said that he was informed quite confidentially that the Japanese industry plans to secure American counsel during the conversations with the American group in Japan. Specifically, he understood that Mr. W. S. Culbertson, counsel for Mitsui and Company, was to be in Japan during the course of the conversations. There was some feeling that the presence of an American lawyer in the picture as an adviser to the Japanese would perhaps add to the difficulties. Dr. Murchison expressed the opinion, however, and many others agreed, that the advice of Mr. Culbertson to the Japanese side might prove helpful rather than obstructive, since his experience as a member of the Tariff Commission and as a diplomatic representative of this Government abroad should have given him a broad point of view on the problems to be considered.

611.9417/178b

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

No. 1160

WASHINGTON, December 12, 1936.

SIR: Reference is made to the Department's telegram No. 154 of December 5, 3 p. m., informing you that a committee representing the American cotton textile industry is to proceed to Japan to confer with representatives of the Japanese cotton textile industry.

Beginning in the summer of 1935, informal discussions were held between the Department and the Japanese Embassy with a view to the Japanese Government undertaking to exercise control over ex

ports of cotton piece goods from Japan to the United States. Although agreement was reached with regard to the total volume to which such exports should be restricted, the request that the American Government exercise control over imports of cotton piece goods from Japan, for which, of course, this Government has no legal warrant, precluded the making of any arrangement. On May 21, 1936, the President acting on a recommendation from the Tariff Commission ordered a moderate increase in the tariff on certain types of cotton piece goods the principal country of exportation of which is Japan.

Following that action by the American Government, Dr. Claudius T. Murchison, President of The Cotton-Textile Institute, laid before the members of the Institute a proposal that a committee representing the American cotton textile industry visit Japan and place before the Japanese cotton textile industry the possibility of an understanding being reached with regard to the Japanese industry exercising control of shipments of cotton textiles to the American market, and perhaps of the setting up of a joint Japanese-American trade committee to deal with continuing problems affecting the two industries. This Government looks with decided favor upon the general purpose of the project, which is in all respects a private one. It is understood that the Japanese Government likewise looks with favor upon this effort to obtain, through private initiative, a mutually satisfactory adjustment of a trade problem.

There are enclosed a copy of a confidential circular dated September 18, 1936, addressed by Dr. Murchison to members of the Board of Directors of The Cotton-Textile Institute, and an address on the subject "The Promotion of Japanese-American Trade Relations", delivered on November 19, 1936, by Dr. Murchison at the AmericanJapanese Trade Council Luncheon of the National Foreign Trade Convention. There is also enclosed a copy of a memorandum sea of a conference which took place on December 7, 1936, between Dr. Murchison and members of his committee, and officers of the American Government.

86

Although the American Government is in no way involved in the project on which Dr. Murchison and the members of his committee are engaged, it is suggested that the Embassy and the consular officers in Japan extend such courtesies and assistance to these gentlemen as may be appropriate.

Very truly yours,

86 Neither printed.

R. WALTON MOORE

80a

Supra.

DISINCLINATION OF JAPAN TO NEGOTIATE A CONVENTION WITH THE UNITED STATES REGULATING FISHERIES OFF THE COAST OF ALASKA 87

894.628/145

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

No. 1698

TOKYO, February 21, 1936. [Received March 9.]

SIR: I have the honor to refer to Instruction No. 921 of January 11, 1936,88 in which the Department enclosed a memorandum of conversation between Assistant Secretary of State Sayre and the Counselor of the Japanese Embassy in regard to a proposal to regulate fishing by Japanese in certain waters of Bering Sea and Bristol Bay. The instruction stated that although it appears that the conclusion of an agreement of the kind envisaged is precluded at present by the attitude of the Japanese authorities, the Department would appreciate further suggestion or comment from the Embassy.

The Embassy is inclined to the view that the Japanese will not be willing to undertake negotiations in regard to fishing in northern waters until the present Russo-Japanese fishing difficulties are straightened out, which may require some time. Meanwhile, it seems unlikely that the Japanese Government will encourage salmon fishing by Japanese interests in waters adjacent to Alaska.

For some years, as the Department is aware, the Japanese have been dissatisfied with the fur seal treaty,89 and it is possible that when the Russian fishery difficulties are out of the way, or in a fair way to settlement, the Japanese may propose some modification of the present arrangement and offer restriction of salmon fishing as an inducement. This is pure speculation, but the Japanese desire to reserve liberty of action as regards salmon fishing together with their known attitude towards the present provisions of the fur seal treaty lend some force to the supposition.

Respectfully yours,

894.628/147: Telegram

JOSEPH C. GREW

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

WASHINGTON, March 28, 1936-3 p. m. 37. Embassy's despatch No. 1558, November 20, 1935.90 The Department of Commerce has received reports from unofficial sources

87

Continued from Foreign Relations, 1935, vol. II, pp. 1072–1080.

88 See ibid., p. 1080, footnote 69.

SD Convention between the United States, Great Britain, Japan, and Russia, signed at Washington, July 7, 1911, ibid., 1911, p. 260.

30 Not printed; see telegram No. 208, November 12, 1935, 5 p. m., from the Chargé in Japan, ibid., 1935, vol. III, p. 1078.

that Japanese vessels have obtained licenses for salmon fishing in waters adjacent to Alaska and are now engaged in such fishing. It is believed that circulation of such reports might most effectively be discouraged by the Department of Commerce making known to Alaskan salmon fishery interests the assurances given to you last year by the Foreign Office as reported in your despatch above cited.

Please communicate the foregoing to the Foreign Office and inquire whether there would be objection to the procedure above outlined, reporting reply of the Foreign Office promptly by telegraph.

HULL

894.628/148: Telegram

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

TOKYO, March 31, 1936-5 p. m. [Received March 31-6: 49 a. m.]

82. Department's 37, March 28, 3 p. m. The Foreign Office informs the Embassy orally that no licenses to take salmon in waters adjacent to Alaska have been issued to Japanese vessels; that such action is not contemplated at present and that the Japanese authorities have no knowledge of any Japanese fishing craft in Bering Sea at this time. The Embassy is further informed that there would be no objection to giving this assurance to interested persons.

GREW

894.628/151: Telegram

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

WASHINGTON, June 3, 1936-2 p. m.

67. Embassy's No. 82, March 31, 5 p. m., and previous. A wireless despatch dated Tokyo, May 29, to the New York Times states "A Japanese trawler with experts aboard will be sent to Alaska to investigate the prospects of open sea fishing enterprises there. Hitherto the government has refused permission to operate in Alaskan waters because of American fishing interests. . . It is now considered feasible to extend the Japanese fisheries to Alaska. .

The Department would appreciate receipt at your early convenience of your comment and of available information with regard to the project referred to in above-mentioned press despatch.

HULL

91 Omissions indicated in the original.