894.6363/286
The President of the Standard-Vacuum Oil Company of New York (Parker) to the Chief of the Division of Far Eastern Affairs (Hornbeck)
Dear Dr. Hornbeck: The reason we have not written you recently on the Japan situation is that we have deliberately marked time in our negotiations during the last few weeks, awaiting the critical date of July 1st, on which the Japanese Government were to allocate the third quarter quotas. On June 29th we were forced to give the Government some assurance that we had in mind a proposal whereby technically at least, we would be meeting the storage provision of the law. This we did, and on July 3rd, we received a telegram from Yokohama announcing the third quarter quotas. While our allotment of trade for the next three months does not permit us to participate in the natural increase, we are pleased to say that at least we received quotas on all products equal in volume to those allocated for each of the previous quarters.
The assurance we gave the Government in regard to meeting the storage provision, is predicated on a joint proposal of our British friends and ourselves, that a Japanese storage company comprising Japanese capital, be formed in Japan for the purpose of holding for our account, the non-commercial stock requirements, and on terms which are now being negotiated. It will be seen from this that we are continuing the policy of presenting a united front with the British.
We have also, in conjunction with London, offered to make available to the Japanese, certain hydrogenation processes controlled by our associates. While the Japanese have undoubtedly made considerable progress themselves in hydrogenation, nevertheless it seems that the Government is interested in acquiring our processes. We are hoping that our offer will be of material value in the negotiations regarding the storage company.
Sincerely yours,