I saw Sumner Welles [1] today.

They have information that 11 Japanese troopships left Chinese

ports today and that a convoy of Japanese troopships (strength

unspecified) has also left Formosa for unknown destination.

Sumner Welles said that their information was that the Japanese

would attack Indo-China bases on July 24th. [2] French may or may

not put up token of resistance.

As soon as the fact of Japanese occupation of additional areas in

Indo-China can be definitely established (which Sumner Welles

thought would not take longer than two days after such occupation)

United States would take the following economic action:-

(a) Freezing of all Japanese funds in United States.

(b) Stoppage of practically all imports from Japan including silk.

(c) Limitation of export of all petroleum products from United

States to Japan to the level of some past year such as 1934.

(d) Further reduction in octane rating petrol exportable to Japan.

[3]

Sumner Welles said he had no clear idea what economic action

Britain and Australia propose to take but he hoped that the lack

of economic action by us would not offset the abovementioned

United States action.

I asked Sumner Welles if he did not think some further warning to

Japan was worth while. He said that except for precise knowledge

of details Japanese already knew some such strong industrial

action as the above would follow on any further aggression.

On my inquiring what response he anticipated that Japan would make

to the above American action he said that he expected renewed

public outburst regarding British-American policy of

'encirclement' and strong protests but nothing more.