I know it's a month late and you've probably already sorted this but nobody who has replied has sussed that the fork is a Cannondale Headshok.
Looking at the bikes in your sig you know about Cannondales but that stem would appear to be a 1.5" diameter stem if it doesn't fit the Headshok steerer and you think it needs opened out by 1mm to fit.
Headshok steerers are nominaly 1.562", actually 1 9/16ths inch, Americans don't do metric, not 1.5". That 0.062" or 1/16th of an inch, makes all the difference. So 39.68mm minus 38.1mm is 1.58mm, a bit more than the 1mm you thought. Looking at the Thomson stem I'd be a bit worried about removing 0.75mm from inside of stem where the M & S of Thomson is, That's it's thinnest part and also where it's under greatest stress, the rest of stem is thick enough though. Think my calculations are correct but I'm old so may have made a mistake so happy to be corrected.