Despite their informal nature, the violation of a gentlemen`s agreement could have negative consequences on trade relations if a party decides not to keep its promise. A gentlemen`s agreement can also be described as a « gentleman`s agreement » and can be completed by a handshake or not. The gentlemen`s agreement of 1907 () was an informal agreement between the United States of America and the Empire of Japan紳協 which did not allow Japanese immigration and Japan to no longer emigrate to the United States. The aim was to ease tensions between the two Pacific states. The agreement was never ratified by the U.S. Congress and was replaced by the Immigration Act of 1924. In 1907, a stock market panic that hit several major investment banks caused a financial crisis. The panic led President Theodore Roosevelt to work closely with J.P. Morgan to consolidate the banks, arguing that this would avert a major crisis.
Chinese immigration to California exploded during the 1852 gold rush, but the Japanese government practiced a policy of isolation that thwarted Japanese emigration. It was not until 1868 that the Japanese government reduced restrictions and Japanese immigration to the United States began. Anti-Chinese sentiments motivated American entrepreneurs to recruit Japanese workers.  In 1885, the first Japanese workers arrived in the then independent kingdom of Hawaii. 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. In 1906, the San Francisco Board of Education passed a decree requiring children of Japanese descent to attend separate and separate schools. At that time, Japanese immigrants made up about 1% of California`s population, many of whom had immigrated in 1894 under a treaty guaranteeing free immigration from Japan.
 A gentlemen`s agreement is an informal, often unwritten agreement or transaction, which is supported only by the integrity of the other party to effectively comply with its terms. Such an agreement is generally informal, oral and not legally binding. Gentlemen`s agreements between industry and the U.S. government were common in the 1800s and early 1900s. The Bureau of Corporations, a predecessor of the Federal Trade Commission, was established in 1903 to investigate monopolistic practices. In 1890, the U.S. government imposed a ban on gentlemen`s agreements in trade and trade relations between nations. Similarly, in 1907 Morgan again collaborated with Roosevelt to create a gentlemen`s agreement that would allow Us Steel to acquire its greatest competitor, Tennessee Coal and Iron, in a tacit and unspoken rule that violated the Sherman Act.
Many Americans argued with the school board that the separation of schools was contrary to the 1894 treaty, which did not explicitly address education, but indicated that the Japanese would obtain equal rights in America. According to the U.S. Supreme Court review decisions (Plessy v. Ferguson, 1896), a state did not violate the equality clause of the U.S. Constitution by imposing racial segregation as long as the various institutions are essentially equal. Tokyo newspapers have denounced segregation as an insult to Japanese pride and honour. The Japanese government wanted to protect its reputation as a world power. Government officials became aware of the crisis and intervention was needed to maintain diplomatic peace.  Gentlemen`s agreements can also be found in trade agreements and international relations. One example is the 1907 Gentlemen`s Agreement, in which the United States and the Japanese Empire addressed immigration from Japan and the mistreatment of Japanese immigrants to the United States.