Office of the Historian

893.6363 Manchuria/27: Telegram

The Ambassador in Japan (Grew) to the Secretary of State

Tokyo, August 3, 1934—6 p.m.
[Received August 3—8:30 a.m.]

168. Department’s 112, July 5, 6 p.m. I have today received an informal memorandum from the Foreign Office, dated August 2, 1934,14 in reply to my informal representations in regard to the oil monopoly in Manchuria. The substance of this memorandum is as follows:

1.
The Japanese Government is not concerned with the Manchuria Oil Company and the oil plans of the “Manchukuo” government but cites for the Embassy’s information certain reports which it is stated, were received recently.
2.
The Manchuria Oil Company has no restrictions in regard to the nationality of shareholders, and under existing law is granted no monopolistic rights.
3.
The “Manchukuo” government seems to be contemplating a law for the control of the oil industry, under which the sales of oil in “Manchukuo” will become a government monopoly. The manufacture, exportation and importation of oil will be included in the monopoly.
4.
The “Manchukuo” government does not appear to contemplate that the entire supply of oil to the monopoly will be obtained from the Manchuria Oil Company.
5.
The Japanese Government does not consider that investment by the South Manchuria Railway Company in the Manchuria Oil Company [Page 720] will give rise to any question of infringement of the existing treaties.
6.
The question of whether or not the “Manchukuo” government is bound by the provisions of the Sino-American treaty of 1844 and the Sino-French treaty of 1858 is a matter to be discussed between the United States and “Manchukuo” governments.
7.
While the Japanese Government cannot prevent the investment of Japanese capital in the Manchuria Oil Company and cannot persuade the “Manchukuo” government to abandon its plans for control of the oil industry, it understands that the “Manchukuo” government intends to respect the interests of foreign merchants in “Manchukuo” to the greatest possible extent in connection with the purchase and sale of petroleum, and recommends direct negotiations between the interested merchants and the “Manchukuo” government.

Repeated to Peiping.

Grew
  1. For text, see Foreign Relations, Japan, 1931–1941, vol. i, p. 132. The Ambassador, in his telegram No. 170, August 6, 7 p.m., added: “British Embassy has received an essentially similar but not identic memorandum under same date.” (893.6363 Manchuria/28)↩