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

711.94/25405/35

Documents Prepared in the Division of Far Eastern Affairs⁸⁸

November 11, 1941

If, as seems almost certain, there is no possibility at the present time of reaching with Japan a comprehensive settlement covering the entire Pacific area, it is highly probable that after a certain point further efforts to reconcile differences on the essentials of such a comprehensive settlement will lead only to a rupture of the conversations followed by a further and perhaps sudden deterioration of relations. Such a prospect prompts the question whether it might not be possible to propose some tentative or transitional arrangement the very discussion of which might serve not only to continue the conversations pending the advent of a more favorable situation, even if the proposal is not eventually agreed to, but also to provide the entering wedge toward a comprehensive settlement of the nature sought providing the proposal is accepted by Japan and provided further that China is able to obtain satisfactory terms from Japan.

With these thoughts in mind, there is suggested for consideration a proposal along the lines of the attached draft.

It is probable that the Japanese will not agree to the attached proposal as it stands without considerable modification, and it is even more probable that negotiations between Japan and China under these circumstances will come to nothing. Nevertheless, it is hoped that a proposal along the suggested lines might offer a basis which might keep conversations going for some time longer than otherwise, and if accepted by the Japanese might lead to an eventual comprehensive settlement of a nature compatible with our principles.

It is suggested that the foregoing proposal would have more chance of receiving consideration by the Japanese (and of thus gaining time) if it were presented to them before feelings had become further aroused over fruitless discussion of matters we assume will not be agreed upon.

In presenting the proposal to the Japanese we might say that we offer it with reluctance as we realize that it is of a patchwork nature and imperfect, but that we feel that under the circumstances it is better to have something on which we can hope to build in the future than to end with no agreement at all, as would seem to be otherwise inevitable in view of our present divergencies of views on certain fundamentals.

If the Japanese should decline to consider such a proposal we should be no worse off than we otherwise would have been. At the same time, it is believed that by presenting a proposal of this sort, we should make clear on the record our effort to do everything possible to reach a settlement with Japan. If they do consider it, one point on which they would be most likely to seek modifications would be a provision which would enable them to obtain oil sooner than contemplated in the proposal that we offer them.

In regard to that point, it might be possible to work out an arrangement whereby we could allow them to have petroleum in amounts equivalent to amounts of petroleum products released in Japan for normal peacetime consumption. This would make possible the normal functioning in Japan of buses, commercial trucks, taxis and private automobiles as well as Japanese fishing launches and commercial boats and would emphasize to the Japanese public the advantages of conditions of peace.

(Draft)

I.

A. The Governments of the United States and of Japan accept joint responsibility for the initiation and conclusion of a mutual understanding and declaration of intention and policy for the resumption of traditional friendly relations.

B. Without reference to specific causes of recent estrangement, it is the sincere desire of both Governments that the incidents which led to the deterioration of amicable sentiment between their countries should be prevented from recurrence and corrected in their unforeseen and unfortunate consequences.

C. It is the earnest hope of both Governments that by cooperative effort, the United States and Japan may contribute effectively toward the establishment and preservation of peace in the Pacific area.

D. Both Governments affirm that their national policies are directed toward the foundation of a lasting peace and the inauguration of a new era of reciprocal confidence and cooperation between the peoples of both countries.

E. Both Governments further affirm that 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.

(4) The principle of non-disturbance of the status quo except as the status quo may be altered by peaceful means.

F. Both Governments have agreed that in order to provide stable peace and to eliminate chronic political instability and recurrent economic collapse, 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 nondiscriminatory access by all nations to raw material supplies.

(4) The principle of full protection of the interests of consuming countries and populations through international agreement regulating supply of commodities.

(5) The principle of establishment of such institutions and arrangements of international finance that 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.

(In drafting the abstract principles on which commitments are to be exchanged, an effort has been made to embody those principles to which it is believed the Japanese are readily willing to agree.)

II.

A. As initial steps toward the implementation and practical application of the fundamental principles agreed upon, both Governments have agreed to take the following measures:

(1) The Government of the United States will suggest to the Governments of China and of Japan that they immediately enter into direct amicable negotiation for a peaceful settlement of their differences.

(In offering to extend advice to the Chinese and Japanese Governments that they enter into direct negotiations for a settlement of their differences, we would not ask the Japanese to tell us their peace terms. We should, therefore, be in a position to tell the Chinese that our suggestion contains no implication of approval of terms which the Japanese might offer; that we intend to continue our policy of aid to countries which are victims of aggression; and that if the hostilities should be resumed after the armistice, we shall again extend to China all possible aid. In our approach to the Chinese we should make it clear that following a peaceful settlement with Japan, we should expect to extend in the fullest possible measure material and technical assistance to China during the period of reconstruction.)

(2) The Government of Japan will offer to the Government of China an armistice during the period of amicable negotiation.

(3) The Government of the United States during the course of amicable negotiations between China and Japan under an armistice will hold in abeyance shipment of supplies of a military character to China.

(4) The Government of Japan during the course of amicable negotiations between Japan and China under an armistice will refrain from further reenforcement of its expeditionary forces in China and French Indochina and will hold in abeyance shipment of supplies of a military character to those forces.

(5) The Government of the United States upon the conclusion of a peace settlement between Japan and China will immediately enter into negotiations with the Governments of Japan and of China for the resumption of normal trade relations with those Governments; and will undertake now negotiations with Japan for a resumption in trade and commerce in certain commodities and services other than those essential to warfare with a view to reconstruction of normal peacetime industry in Japan.

(The negotiations with Japan for the resumption of normal trade relations, following a peace settlement between Japan and China, would look to an arrangement whereby trade would be restored according to a graduated scale pari passu with the evacuation of Japanese troops from French Indochina and from China and with the re-establishment of nondiscriminatory trade in areas now under Japanese military occupation. For example, there might be provision that with the completion of Japanese evacuation of certain areas such as Indochina or China south of the Yangtze River we might let Japan have certain quantities of desired commodities such as oil and iron.

In the negotiations for an immediate resumption of limited trade in commodities other than war supplies, we should have in mind the dual purpose of setting Japanese factories and shipping facilities to production and services which would aid in meeting our present needs, would assist the transition in Japan from a war to a peace economy, and which would augment the natural popular reaction in favor of peaceful and profitable pursuits. Such a reaction might be expected once hostilities with China have ended and the threat of extended hostilities with the United States somewhat abated. A beginning in this direction might consist of arrangements for the exchange of such Japanese products such as canned crab meat, menthol, camphor, pyrethrum flowers, plaits for hat making, tea and potteries, for American products such as fertilizers, foodstuffs, pharmaceuticals, cotton and tobacco. Arrangements might also be made for the charter of Japanese vessels, if agreeable to Japan, and for the construction of vessels to American order in Japanese shipyards with steel and other material supplied from the United States.)

(6) The Governments of Japan and of the United States mutually guarantee that they will not undertake military offensive operations in any direction in the Pacific area.

I. Commitments to be given mutually by the Governments of the United States and Japan.

(a) The Government of the United States and the Government of Japan subscribe to and actively support the following principles and the practical application thereof as the foundation upon which their relations with all other nations are based:

(1) Respect for the territorial integrity and the sovereignty of each and all nations.

(2) Support of the principle of non-interference in the internal affairs of other countries.

(3) Support of the principle of equality, including equality of commercial opportunity.

(4) Non-disturbance of the status quo except as the status quo may be altered by peaceful means.

(b) The Japanese Government and the Government of the United States hereby mutually pledge themselves that Japanese activity and American activity in the Pacific area shall be carried on by peaceful means and in conformity with the principle of non-discrimination in international commercial relations. In pursuance of this policy, the Japanese Government and the Government of the United States agree to cooperate each with the other toward the creation of conditions of international trade and international investment under which Japan and the United States will have a reasonable opportunity to secure through the trade process the means of acquiring those goods and commodities which each country needs for the safeguarding and the development of its own economy. They furthermore agree to cooperate each with the other especially toward obtaining commercial access, on a non-discriminatory basis, by each of them to supplies of such basic commodities as oil, rubber, tin, nickel, and any other commodity the importation of which is essential to each country for the maintenance of its economic life.

(c) The Governments of the United States and Japan mutually pledge that they will not seek in any part of the Pacific area political expansion in any direction or the acquisition of economic rights, advantages, or preferences by force.

II. Commitments on the part of the Japanese Government.

(a) The Japanese Government, following the cessation of hostilities between China and Japan, will withdraw all of its troops immediately from French Indochina.

(b) The Japanese Government will begin at once to put into effect a program for the rapid and progressive restoration of all of the normal activities of nationals of the United States in China and Manchuria and for the progressive relaxation and removal of all restrictions on the activities of nationals of the United States in China which have been imposed directly or indirectly as a result of Japanese military activities in China, and will complete this program as rapidly as possible in order to provide full implementation and practical application of the principle of non-discrimination in international commercial affairs.

III. Commitments on the part of the Government of the United States.

The Government of the United States will, pari passu with the removal or alterations of those conditions and situations in the Pacific area which gave rise to the taking by it of certain political and economic measures, alter or discontinue those political and economic measures.

88. Drafted November 11 by Joseph W. Ballantine and Max W. Schmidt. Notation on file copy: “Draft suggestions (November 11, 1941) to the Secretary of State. No action was taken on these suggestions. Prepared in FE.”