(e) Document 4041, (Exhibit No* )l "Berlin, 28 July 1938 "MEMORANDUM "On 27 July 1938 I went to see the Japanese Ambassador and told him on instructions of the German Reichs Minister, that the Reichs Minister, even after another thorough deliberation, did not find satisfactory the last Japanese proposal for the wording of the 'Pre Memoria1 regarding North China, according to which Germany was to be promised only an *especially favorable' treatment and that he stands on the demand for a promise for 'preferential treatment over against third states• * This demand was merely the natural consequence of the special relation between our two countries and the great sacrifices with which we were Supporting the Japanese advance in Ncrth China* A treatment which is only •especially favorable, however, did not sufficiently do justice to this situation. "Several reports from our representatives in China had contributed to the decision of the German Reichs Minister, from which it could be seen that also In the already peaceful part of North China every foreign trade was being ruthlessly eliminated In favor of the Japanese, and that thereby any more favorable treatment of the German trade was In no way taking place* This action Induced the impression, that the long range Japanese economic policy in North China systematically leads to principally eliminating every foreign trade, even the German, and only permitting it in so far as Japan itself was not capable