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The Secretary of State for Dominion Affairs to the Prime Minister of New Zealand

My telegram of 22 November. Japan.

His Majesty's Ambassador at Washington has reported an interview on the morning of 23 November between the United States Secretary page 75 of State, the Australian and Dutch Ministers,¹ and himself, in which they were joined by the Chinese Ambassador.

2. Hull recalled the past history of Japanese talks as reported in my telegram of 20 November [No. 65], and added that in the latest conversation with Kurusu and the Japanese Ambassador he had emphasised the United States view that Hitler's attempt to dominate the world was being supported by a small Hitler group in Tokyo, and that the United States were no more likely to stop giving aid to China than they were likely to stop giving aid to the British Commonwealth.

3. The two governing motives in his mind in regard to these conversations had been: (a) to strengthen the peace party in Japan, (b) to gain vital time. As to the first, Kurusu had emphasised the urgent importance of giving the peace party some evidence of progress, however small, and as to the second, the United States Navy and Army were most anxious to gain time for further strengthening of the Philippines. Hull had, therefore, while standing, as he said, 100 per cent firm in all vital principles, done his best to keep the conversations going. He thought the position had now been reached where little further delay was possible.

4. On the night of 20 November the Japanese communicated to Hull a document, of which the text is contained in my immediately following telegram.

5. Hull said that when he saw the Japanese again his inclination was to make an alternative proposal to them on the following lines:

‘The United States Government, while maintaining their position on fundamental points, would be willing to consider the conclusion of some limited agreement which might give time for wider discussions, but which would probably not last more than two or three months unless progress could be made on the larger questions. The basis of such an agreement might be that Japan should agree to withdraw the bulk of her troops out of Indo-China, leaving in Indo-China only a few thousand, roughly approximating to what was envisaged under their agreement with Vichy in August.’

In return it might be possible by general agreement with the United States, the British Commonwealth and the Dutch, to give Japan some relief from the present economic pressure. At one point Hull spoke of getting Japan to agree to make no aggressive move in any other direction, but His Majesty's Ambassador did not gain a clear impression whether this was to be a specific part of the limited agreement.

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6. Hull inquired what view other Governments would be likely to take of this kind of suggestion which, he thought at best, if the Japanese were really seeking for a way out [group mutilated – for the?] new policy, might lead to a wider settlement, and at worst would have the effect of gaining valuable time. He thought that, from the point of view of China, it would be of considerable value to Chiang Kai-shek to have the menace to Indo-China removed. Hull emphasised that the United States Government had as yet taken no decisions and were anxious for comments or suggestions from other Governments before doing so, for they might at any moment find themselves confronted with the necessity for prompt action. Although he thought there was an outside chance of something coming out of it, he was not hopeful.

7. His Majesty's Ambassador informed Hull in reply of the contents of my telegram of 22 November [No. 67]. The Dutch Minister emphasised the importance of any concession in the matter of oil, on which Hull observed that any oil supplied would need to be strictly limited and, in his opinion, should not include the highest grade. In any case, if the Japanese were allowed any oil from the United States, it would take a month for them to fetch it.

8. Subsequent to the foregoing conversation Hull suggested to His Majesty's Ambassador that representatives of the Governments concerned might be given authority to take decisions on the amount of economic relief which their Governments would be willing to concur in giving to the Japanese on the basis suggested. He felt the general situation to be critical, and one that might not permit the delay involved in reference to Governments on all points.

9. His Majesty's Ambassador considers that Hull has in mind a limited and probably temporary arrangement only designed to enable the position for conversations on a wider issue to proceed. These would include a general Pacific settlement, a settlement between China and Japan, and the attitude of Japan under the Tripartite Pact. He thinks the question as Hull sees it is whether the United States should proceed to try and effect some temporary arrangement or should continue to stand out for some larger settlement, and that Hull, impressed by the desirability of gaining time, favours an attempt at the former. The State Department are considering what might be the lines of an all-round Pacific settlement, but Hull realises that this is not yet practical politics and, if and when the time comes, would naturally have to be discussed with the other Governments concerned.

10. The Chinese Ambassador expressed the fullest confidence in Hull, and admitted that it would be a great relief to have the Japanese menace from Indo-China withdrawn, but he made the points that—

(a)	under this plan, Japan would remain free to prosecute the war in China; page 77
(b)	the Chinese Government regard economic pressure on Japan as of vital importance to China, and would be very reluctant to see it seriously reduced at this stage.

His Majesty's Ambassador had the impression that Hull would be very careful of Chinese feelings.

11. Hull emphasised again his desire that this matter should be treated within as restricted a circle as possible in view of the paramount importance of secrecy.

12. We will telegraph further as soon as possible.