894.6363/57: Telegram
The Ambassador in Japan (Grew) to the Secretary of State
[Received March 5—7:15 a.m.]
39. A Government bill has been submitted to the Diet which will place virtually complete control of oil importation and refining in Japan in the hands of a Government commission. The bill, (a) requests all refiners and importers of petroleum products to obtain annual licenses to operate and to conduct operations in accordance with instructions from the Government, (b) requires refiners and importers to maintain minimum stocks which are to be kept at the disposal of the Government at current prices, and, (c) authorizes the Government to fix prices when deemed necessary in the public interest. It is expected that this bill will receive the approval of the Diet in the near future.
- 2.
- The bill is ostensibly designed to assure the Government of a permanent supply of oil at reasonable prices for use in time of war, but its effect upon the American and other foreign oil companies operating in Japan will of course depend more upon the administration of the law than upon the specific provisions contained therein. It is obvious that under the powers granted by the legislation the foreign oil companies can at any time be forced to abandon their business in Japan. The local manager of the Standard-Vacuum Company has been orally assured by the Minister of Commerce and Industry that the purpose of the legslation is to protect rather than jeopardize the business of the foreign oil companies but this assurance will not necessarily bind future administrations.
- 3.
- The British Ambassador recently has informally stated to the Vice Minister for Foreign Affairs that the oil interests of his country are anxious to cooperate with the Japanese oil industry but that they would like to know what the future policy of the Japanese Government [Page 701] is to be, in order that they may be in a position to formulate their own future policy and determine whether further investment and installation is justified, and he expressed the hope that the administration of the impending legislation if passed would not interfere with the present activities of the foreign oil companies in Japan. The local manager of the Standard-Vacuum Company would like to have me make similar informal representations. Does the Department perceive objections? (See my despatch 311 [384?], May 11, last80).
- Not printed.↩