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