394.1153 Smith Company, Werner G./17: Telegram
The Consul General at Shanghai (Lockhart) to the Secretary of State
[Received June 30—7:30 a.m.]
926. Reference Shanghai’s 820, June 11, 8 p.m., Nanking’s 115, June 15, noon, 127, June 27, 4 p.m. and Department’s 377, June 13, 6 p.m.97—wood oil of Werner G. Smith Company. I have received a letter today from the Japanese Consul General stating that although the information supplied by this Consulate General “was not completely satisfactory to the Japanese naval authorities in proving the ownership of the oil it was decided to give a special consideration for this case and release the oil on the understanding that it will be kept on board of the junks at Nanking until such time as its removal down to Shanghai becomes feasible without causing friction. It is understood that this does not constitute a precedent in the settlement of similar cases in the future”. A member of my staff this afternoon discussed the case with the Japanese consular officer handling the matter. The latter stated that the Japanese naval authorities at Nanking would release the oil to the authorized American representative of the Werner G. Smith Company there, but only on the condition that the oil be kept in the junks, that the junks be brought down to Nanking and turned over to the U.S.S. Oahu to be placed in the concentration of American vessels now at Nanking. He added that due to the pressure of Japanese military and naval traffic on the Yangtze River the Japanese naval authorities would definitely not permit the shipment to be transported to Shanghai, nor could they give any assurances as to when such transportation might be effected. In response to an inquiry as to whether, after the release was made, the authorized representative of the Werner G. Smith Company would be permitted to remove the oil from the junks and store it in the Jardine Matheson hulk at the Hogee98 installation pending its ultimate shipment to Shanghai, he replied that such a disposition of the oil would require a further consideration by the Japanese naval authorities.
[Page 386]If the release, as proposed by the Japanese naval authorities, is accepted, it is true that the cargo would be placed in a location where it might be more easily safeguarded from possible theft or ignition, but the terms of the release are such as would result merely in removing the oil from the immediate control of the Japanese naval authorities and yet leave it at the same time subject to the restrictions placed by the Japanese upon its transportation to Shanghai.
The Department’s instructions are respectfully requested.
Repeated to Hankow and Nanking.