893.6363 Manchuria/3
The Consul General at Mukden (Myers) to the Acting Secretary of State
[Received July 1.]
Sir: In compliance with the Department’s instruction dated April 13, 1933, file No. 893.6464 Manchuria/1,47 directing this office to investigate and report upon the alleged intention of the new regime in Manchuria to establish an oil company, I have the honor to submit a report embodying available information on this subject.
This office has been unsuccessful in its attempts to obtain any concrete information regarding the alleged intention to establish an oil company in Manchuria. The Japanese Consulate General in reply to verbal inquiries stated that it has no information on this subject. Inquiries made at Hsinking of a prominent official in the Ministry of Finance by an American newspaper correspondent at my suggestion elicited a reply to the effect that the establishment of an oil refinery at Hulutao is only a press rumor. He said, however, that if petroleum in ample quantity is found in Manchuria its development will be undertaken by the state as in the case of other resources pertaining to “national defense.” When reference to the press report regarding the establishment of an oil company or monopoly was first mentioned, the official stated that the inquirer must have reference to Japan and not Manchuria.
It may be mentioned in this connection that the only reference to this general subject which has been noted in the local press, Chinese and Japanese, was in a news item relating to the drafting of the new [Page 735] Mining Law of “Manchukuo” which, it stated, is expected to be promulgated during July, 1933. Under the qualifying clause to the effect that the law now under consideration is said to contain the following items, the following reference was made to the petroleum industry:
“3. The mining of petroleum shall be managed by the Government and an official petroleum company shall be organized for this purpose.”
In the comment of the editor which immediately followed it was stated that the said petroleum company is expected to be formed during June and that as the result of the investigations of the Resources Investigation Party petroleum pitch has been found both in the northern and southern parts of Jehol Province (Hoten Mainichi Shimbun, May 17, 1933).
It has been learned from a reliable source that the Special Investigation Commission of Kwantung Army Headquarters at Hsinking, of which General T. Yoshida is the head, has organized various non-military projects pertaining to the new state, among which may be mentioned road building, the amalgamation of electrical communications and a number of others. Its activities thus far have in no small measure been related to development projects which pertain to “national defense.” That it has been working on the new mining laws seems extremely probable. It will be recalled that the report of The Japan Advertiser of April 1, 1933, on this subject quoted the Yukai Shimpo, “a newspaper devoted to the Japanese oil industry,” to the effect that a conference was held in Hsinking on March 18, 1933, “with the object of studying exploitation of the oil fields of Manchoukuo.” This conference, it was stated, which was promoted by the Kwantung Army was presided over by General T. Yoshida, retired, technical adviser to the Army and was attended by army experts, “Manchukuo” officials and representatives of the Japanese oil companies and of the South Manchuria Railway. According to information supplied by Consul Vincent, at Dairen, the representatives of the Mitsubishi Trading Company and Mitsui Bussan Kaisha who attended the conference at Hsinking came directly from the Tokyo head offices.
It seems probable that the steps taken at Hsinking and Tokyo were concerned mainly with the formation of a company for the exploration of the oil fields of “Manchukuo” and their exploitation if adequate supplies are found. Although a state enterprise, it will be dominated by and operated for the benefit of Japanese interests. It seems that the Japanese are interested primarily in securing supplies of oil for Japan’s own needs or, as has been expressed in the press, of increasing the production of the country “to a self-supplying [Page 736] basis.” If true, the development of a monopoly marketing system in Manchuria is more likely to follow than precede the establishment of such a system in Japan. Also it is believed that the establishment of a refining industry in “Manchukuo” which will be dependent upon foreign crude oil supplies would be purposeless and would neither promote the interests of the state (Japanese) nor of the petroleum refineries in Japan. It may be mentioned in this connection that according to Japanese press reports a survey of the mineral and other resources of Jehol Province is now being made.
There is enclosed a copy of Consul Vincent’s letter of May 18, 1933,50 in reply to my inquiry concerning information on this subject. Local foreign distributors have no information other than that contained in The Japan Advertiser of April 1, 1933. The authorities who may know something of the plans of the military maintain strict silence. In fact information regarding ordinary government projects and activities is frequently kept secret until it is released to the press. Also it has been noted at times that the press in Japan is permitted to publish reports relating to Manchuria while the news here is banned. It may be added that newspapers published in Japan which are distributed by local news dealers are subjected to a second censorship in Manchuria and that instances of articles being cut out are not infrequent.
Further information regarding this industry which may be secured will be promptly reported.
The preparation of this despatch was delayed because it was impossible to arrange for the making of inquiries at Hsinking until a few days ago.
Respectfully yours,