114 Mr R. G. Casey, Minister to the United States, to Department of External Affairs

Cablegram 981 WASHINGTON, 16 November 1941, 1.07 p.m. Received 17

SECRET

Your telegram 983. [1]

As you know, State Department has been at great pains to conduct conversations with Japan entirely themselves and in the greatest secrecy, assuring the British Ambassador [2] and myself and others interested that if preliminary conversations indicate possibility of any arrangements we will be informed and consulted at once.

Above has been very strictly adhered to. However, I gather that the principal matters the United States has insisted on have been:

(1) Complete Japanese evacuation of China and Indo-China;

(2) Cessation of pressure on Thailand and Siberia;

(3) Complete equal economic opportunity for all countries, in all relevant Far Eastern countries.

In return for the above, it is believed that the United States has indicated that the economic embargo on Japan would be lifted and later on also economic assistance provided.

Other matters discussed have been Japan's interpretation of the terms of her adherence to the Axis pact with a view to getting Japan virtually, if not in theory, to withdraw from her close Axis association.

I have been given every indication that the prospect so far of a 'deal' on the above lines is very small.

Short of such a sweeping and fundamental arrangement as the above, I believe that some lesser 'deal' has been discussed, such as possible evacuation by Japan of Indo-China and cessation of pressure on Thailand, in exchange for which some limited betterment of economic conditions would be provided. However, there has been, I believe, little sign of a deal even on these limited lines.

British Ambassador (with whom I have discussed your telegram 983) believes British Ambassador Tokyo [3] will already have made points you suggest, in conversation with Japanese Minister for Foreign Affairs. [4]

I have suggested to British Ambassador here advisability of his seeing Kurusu [5] while he is here. It would of course be inadvisable for British Ambassador to seek such a meeting, but idea could easily be suggested to Kurusu by State Department and I have little doubt he would make approach to Halifax. It might even be possible for it to be suggested to Kurusu that he should seek to see me too. If you have views on latter I would be glad to be advised.

CASEY

1 See Document 109, note 4.

2 Lord Halifax.

3 Sir Robert Craigie.

4 Shigenori Togo.

5 Japanese special envoy to the United States.

[AA : A981, JAPAN 178]