In the worst case scenario, a gentlemen`s agreement can be entered into to practice anti-competitive practices such as pricing or trade quotas. Since a gentlemen`s agreement is tacit – which is not subject to the document as a binding legal treaty – it can be used to create and enforce illegal rules. In some cases, these are gentlemen`s agreements in which Wall Street financiers, such as J.P. Morgan and his « House of Morgan, » would meet with the bureau to obtain prior authorization for mergers and acquisitions. One such example was the gentlemen`s agreement in which regulators and the president ignored the Sherman Antitrust Act, which allowed united States Steel Corp. to become the world`s first multi-billion-dollar company. Let me begin first for the laborious thoroness and admirable temperament with which you have gone in the case of the treatment of the Japanese on the coast . I had a conversation with the Japanese ambassador before leaving for Panama; read to him what I had to say in my annual message, which he obviously liked very much; and told him that, in my view, the only way to avoid permanent friction between the United States and Japan was to limit as much as possible the movement of citizens from each country to each other to students, travellers, businessmen and others; As no American worker tried to enter Japan, the need was to prevent all immigration of Japanese workers – that is, from the Coolie class – to the United States; that I really hoped that his government would prevent his coolies, all their workers, from coming to either the United States or Hawaii. He was strongly committed to this view and said that he had always opposed Japanese coolies going to America or Hawaii… I hope my message will calm their feelings for the government to tacitly stop all immigration of coolies into our country. Anyway, I will do my best to achieve it. Tensions in San Francisco had increased, and since Japan`s decisive victory, Japan sanitized against Russia in 1905, demanding equal treatment from Japan.
The result was a series of six notes communicated between Japan and the United States from late 1907 to early 1908. The immediate cause of the agreement was anti-Japanese nativism in California.