294 Mr R.A. Butler, U.K. Parliamentary Under-Secretary of State for Foreign Affairs, to Mr S.M. Bruce, High Commissioner in London
Letter LONDON, 14 October 1939
PERSONAL AND CONFIDENTIAL
In your letter of 21st September you were good enough to enclose some notes on the possibility of improving Anglo-Japanese relations.  I have now had an opportunity of discussing these with our Far Eastern Department, and you may care to have their comments.
You will understand that this letter does not represent a final statement of policy, since we steer with due allowance for wind and tide.
Generally speaking, we concur in your view that no definite improvement can be brought about by small scale concessions, and that only a broader settlement on general principles can lead to any real improvement of atmosphere.
As regards your suggestion that we should approach the United States Government, you will probably have observed from our telegrams NO. 556 to Tokyo of 29th August  and No. 442 to Washington of 30th August  that we have already done so. The response of the State Department to this approach has, however, been far from encouraging. In a reply made to the French Ambassador at Washington , the State Department's view was that 'the proper course was to go slowly with Japan just at present;
while letting them see that the United States of America were quite friendly disposed it would not be wise to let them think that the United States were running after them'. The same sentiment was expressed to Lord Lothian  by President Roosevelt at about the same time. You will see therefore that United States co-operation, which appears to be the pre-requisite for your plan, is not yet available.
The requirements of Japan in overseas markets have always been recognised as a legitimate part of their aspirations, and there is no doubt that in any general settlement we should have to be prepared to meet them as far as possible. In the view of the Department, however, the mistake Japan made was to hope that she would bring about an immediate increase in her trade by conquering China, and it is to be hoped that the realisation will come to her that it is not by conquest that she can hope to expand her markets. We have already indicated to the Japanese that we do not oppose their legitimate aspirations in the field of trade in China, and we have always intimated our readiness to discuss, in as far as they concern the United Kingdom and the Crown Colonies, any reasonable proposals which they may be prepared to put forward with a view to improving their trade within the British Empire.
The abandonment of extraterritorial rights in China has been contemplated for a number of years and would doubtless form part of any general settlement of the Far Eastern situation, but it must be remembered that this concession would be to the established Government of China, and not to Japan, though the latter aims at such abolition as part of her plan to eliminate our interests from China.
In general, it is felt that we should closely watch the situation and not let slip any opportunity which may occur to bring about an all-round improvement in Anglo-Japanese relations. At present the new position created by our war economy is under examination, and it is possible that something may be done in the direction of trade with Japan which would prepare the way for a better understanding. It is interesting to reflect that the Japanese want more from us in this field of trade than we from them. So we are given a bargaining position which may be valuable.