Memorandum by the Secretary of State Regarding a Conversation With the Japanese Ambassador (Horinouchi)
[WASHINGTON,] October 8, 1940.
The Japanese Ambassador called at his request. He first expressed regret at the unsatisfactory relations existing between our two countries at this time. I replied that, in my opinion, this was not the fault of the Ambassador and myself, who have been untiring in our efforts to promote and preserve satisfactory relations between the United States and Japan.
The Ambassador then said that he was instructed by his Government to hand me a note dated October 7, 1940 (copy attached)  relative to our scrap iron and steel embargo which was recently proclaimed.
He read a statement (copy attached)  in support of the note mentioned above.
I replied to the effect that I would see what sort of written reply, if any, might be called for.
I then said that I might at this time, and without delay, state that this Government at all times must determine for itself such internal questions as those material to our program of national defense, as we are doing in the instant case, and that it would be impossible for any country engaged in the serious and urgent undertaking of carrying out of a program of national defense to allow every other outside nation to come in and pass upon the question of our needs of given commodities; that the embargo, as the Ambassador knows, applies to all nations except Great Britain and the Western Hemisphere. I remarked that some years this Government had been criticized for not imposing numerous embargoes, primarily from the standpoint of safety and national defense and peace, and that it was only at the height of our national defense preparations that we were imposing a few embargoes on important commodities.
I said that it was really amazing for the Government of Japan, which has been violating in the most aggravating manner valuable American rights and interests throughout most of China, and is doing so in many instances every day, to question the fullest privilege of this Government from every standpoint to impose the proposed scrap iron and
 Annex 1.
 Annex 2.
steel embargo, and that to go still further and call it an unfriendly act was still more amazing in the light of the conduct of the Japanese Government in disregarding all law, treaty obligations and other rights and privileges and the safety of Americans while it proceeded at the same time to seize territory by force to an ever‑increasing extent. I stated that of all the countries with which I have had to deal during the past eight years, the Government of Japan has the least occasion or excuse to accuse this Government of an unfriendly act. I concluded with the statement that apparently the theory of the Japanese Government is for all other nations to acquiesce cheerfully in all injuries inflicted upon their citizens by the Japanese policy of force and conquest, accompanied by every sort of violence, unless they are to run the risk of being guilty of an unfriendly act.
The Ambassador again said that he very much regretted the serious differences between our two countries, but that he naturally hoped that‑trouble may yet be avoided. He added that any Japanese, or any American must know that strife between the two countries would be extremely tragic for both alike. To this I replied that, of course, it would be exceedingly unfortunate for such occurrence to take places. but I added that my Government has been patient, extremely patient, and that, the Ambassador will bear witness to the long and earnest efforts that he and I have made, and that I have made prior to his coming here, to promote and preserve friendly and satisfactory relations with Japan. I went on to say that we have stood for law and order and treaty observance and justice along with genuine friendliness between our two countries; that it was clear now, however, that those who are dominating the external policies of Japan are, as we here have believed for some years, bent on the conquest by force of all worthwhile territory in the Pacific Ocean area without limit as to extent in the South and in southern continental areas of that part of the world, and that we and all other nations are expected, as stated, to sit perfectly quiet and be cheerful and agreeable, but static, while most of Asia is Manchuria‑ized, which would render practically impossible all reasonable or satisfactory relations so far as other nations are concerned; and that corresponding lower levels of existence would be the ultimate lot of the people of most of Asia. The least objection to or taking of issue with Japan with respect to the foregoing matters would be called an unfriendly act, and, as Prime Minister Konoye said recently to the press, it would be the occasion for war so far as Japan was concerned. I added that, of course, if any one country is sufficiently desirous of trouble, it can always
find any one of innumerable occasions to start such trouble. In brief, it is not left to the other country to participate in such decision.
The Ambassador undertook to repeat the old line of talk about how fair Japan proposed to be with respect to all rights and privileges of foreign nations within its conquered territory. He agreed that no purpose would be served now to go over the many conversations we have had with respect to these matters. I held up the succession of injuries to American rights and interests in China whenever he referred to the scrap iron embargo.
I reiterated the view that it was unheard of for one country engaged in aggression and seizure of another country, contrary to all law and treaty provisions, to turn to a third peacefully disposed nation and seriously insist that it would be guilty of an unfriendly act if it should not cheerfully provide some of the necessary implements of war to aid the aggressor nation in carrying out its policy of invasion. I made it clear that it is the view of this Government that two nations, one in Europe and one in Asia, are undertaking to subjugate both of their respective areas of the world, and to place them on an international order and on asocial basis resembling that of 750 years ago. In the face of this world movement, extending itself from day to day, peaceful and interested nations are to be held up to denunciation and threats if they dare to engage in any lawful acts or utterances in opposition to such wide movements of world conquest.
The Ambassador had little to say. He said virtually nothing in attempted extenuation, except that his Government would expect everybody to receive considerate and fair treatment throughout the conquered areas. He emphasized equal treatment, and I replied that when the best interests of other nations in peace and law and order were being destroyed, it was not a matter of any concern as to whether there was discrimination between the nations which were victims of such movements.
C [ORDELL] H [ULL]
811.20 (D) Regulations/589
The Japanese Embassy to the Department of State, October 7, 1940
The Japanese Government has taken note of the regulations governing the exportation of iron and steel scrap, dated September 30,
1940, amending the construction and definition of the term "iron and steel scrap" included in the regulations of July 26, 1940, and the announcement of September 26, 1940 to the effect that, under the new regulations, licenses will be issued to permit shipments to the countries of the Western Hemisphere and Great Britain only.
The above‑mentioned regulations refer to the Presidential authority derived from the provisions of section 6 of the Act of Congress approved July 2, 1940, entitled "An Act to expedite the strengthening of the national defense", thereby suggesting that it was determined to be necessary in the interest of national defense to curtail the exportation of iron and steel scrap.
In view iron the situation of iron and steel scrap markets, the supply and demand of these materials and the volume shipped to Japan, the Japanese Government finds it difficult to concede that this measure was motivated solely by the interest of national defense of the United States.
In the note of the Japanese Ambassador of August 3 the Japanese Government pointed out that the measure announced on July 26, 1940, in regard to the exportation of aviation gasoline, was tantamount to an export embargo as far as countries outside the Western Hemisphere were concerned. Compared to that announcement, the announcement under review may be said to have gone a step further toward discrimination by specifically excluding Great Britain from the virtual embargo.
In view of the fact that Japan has been for some years the principal buyer of American iron and steel scrap, the announcement of the administrative policy, as well as the regulations establishing license system in iron and steel scrap cannot fail to be regarded as directed against Japan, and, as such, to be an unfriendly act.
The Japanese Government hereby protests against the measures taken by the United States Government in connection with the exportation of iron and steel scrap.
[WASHINGTON,] October 7, 1940.
811.20 (D) Regulations/589
The Japanese Embassy to the Department of State 
Since iron and steel scrap classified as No. 1 heavy melting scrap was placed under export‑licensing system on July 26, 1940, permission
 This undated statement was handed to the Secretary of State by the Japanese Ambassador on October 8, 1940.
of the United States Government was obtained up to August 19 of the same year for 99 percent of applications for shipments to Japan.
In the light of this fact, the sudden enlargement of the iron and steel scrap licensing system to include all grades of these materials is hardly explicable from the standpoint of national defense, on which the regulation of September 30, 1940, is purported to be based.
The discriminatory feature of the announcement, that licenses will be issued to permit shipments to the countries of the Western Hemisphere and Great Britain only, has created a widespread impression in Japan that it was motivated by a desire to bring pressure upon her.
The fact that the majority of essential articles and materials that Japan desires to import from America is placed under licensing system is causing a feeling of tension among the people of Japan, who naturally presume that the system is intended to be a precursor of severance of economic relations between Japan and the United States.
In view of the high feeling in Japan it is apprehended that, in the event of continuation by the United States Government of the present attitude toward Japan in matters of trade restriction, especially if it leads to the imposition of further measures of curtailment, future relations between Japan and the United States will be unpredictable.
It is a matter of course that the Governments of both Japan and the United States should endeavor as best they can to preclude such an eventuality. To this endeavor the Japanese Government will devote itself and trusts that it may have the full co‑operation of the United States Government.