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W.W. Yen
Hermonie Club - 3

by American churches, missionaries and educators. The evil which we have assisted in China has been more widespread and brutal than anything which has yet happened in Europe........"

Such being the case, there appears, therefore, to have been universal popular approval of the effective "moral embargo," which, by means of persuasion the United States Government has imposed upon the export of war planes and war plane parts from the United States to Japan. I further find that there are many Americans who think that this check upon Japan's ability to obtain war materials should go much further than this- that in fact, it should take the form of congressional action, which will prohibit the export to Japan from the United States of all goods susceptible to military use. Indeed, I find not a few who think that the situation demands that the United States should go even further than an embargo upon exports, and refuse to accept imports, such as silk, from Japan. The export of silk supplies to Japan the credits in foreign currency, which she imperatively needs for financing the continuance of her aggressive military policies. So important to Japan is American trade, there can little question that action as this would soon compel her to seek for peace, to withdraw her troops form China, and to cease her violation of the Open Door Doctrine. 

There is at the same time a section of American public opinion, a very small one, perhaps which is against the adoption of any strong measures against Japan. The argument is advanced that if the United States market of war material supply should be closed to the Japanese, they could simply go to other foreign markets and buy them there, to the disadvantage of American trade. This argument seems no longer to hold good with the outbreak of the present European war, because it is now impossible for Japan to obtain war materials, in amounts anywhere adequate, except from the United States.

Then there is to be considered the interest of the comparatively small number of individual Americans, who are directly or indirectly engaged in this "sordid traffic," as Mr. Stimson calls it, of selling ammunition and other implements of war to Japan. A prohibition of the export of these materials to Japan no doubt will impose some losses to American producers. Nevertheless, the bulk of public opinion in the United States appears to take the view that great principals are at stake, which transcend the interests of a few.

The hardships, which an embargo on war shipments to Japan from the United States would entail, appear now to have been offset by the vast programme of national defence [[defense]] in which the United States herself is at present engaged. This will call for the purchase and conservation of a huge amount of war materials, which otherwise would have found their way to Japan. The European war will tax, if it has not already taxed, the capacity of production of war materials to their limit. There is very little danger, therefore, of the war material producers' not selling their goods and having to depend on the Japanese market.

Coming to the question of American-Japanese trade in general, the United States is, in the words of your Secretary of Commerce, "far and away" Japan's most important customer among individual nations, - with the exception of Manchuria-, and the largest supplier of the equipment and raw materials needed for Japanese industries. A few figures will show how dependent is Japan on the United States. The latest returns of the United States Department of Commerce show that in 1938 and during the first ten months of 1939, the United States supplied almost 44 per cent of Japan's imports from foreign currency countries and bought from 27. 9 to 33.7 trade with any other individual foreign currency country, and constitutes an important source of the foreign exchange Japan requires to purchase the raw materials utilizing in her industries, principally her heavy industries. In contrast, during the same period, Japan accounted for approximately only 7 per cent of this country's annual imports and had taken only 8 per cent of its exports. It may, therefore, be said that Japan is much more dependent upon the United States than is the United States on Japan. It is only in the case of cotton that exports to Japan form any large proportion of the total production of an important American product. The economic costs to the United States, in deliberately restricting her trade with Japan, would not, therefore, be heavy especially in view of the increased demand for metals, etc., as a result of the European war.

At the same time, it is difficult to estimate in terms of dollars and cents the extent of the damage that Japanese military invasion of China has done to American trade in China. In this connection, I think I can do no better than to quote a few excerpts from a summary submitted by Mr. Julean Arnold, your Commercial Attache in China, to the Committee of Foreign Relations of the United States Senate, in April, 1939. In this summary Mr. Arnold said among other things: