894.6363/66: Telegram
The Acting Secretary of State to the Ambassador in Japan (Grew)
151. Your 182, August 20, 3 p.m., and 189 [190], August 24, 5 p.m.26 Representatives of Standard-Vacuum and Shell conferred on August 22 with the Under Secretary of State and on August 23 with the Secretary of the Interior. The subject which they brought up was that of the Japanese petroleum regulations and possible action in relation thereto. They suggested joint representations by the three governments most concerned and action by the American Government along the line reported in paragraph 4 of your 182, August 20, 3 p.m.
The Department, noting that the British and Dutch interests which presumably would be affected are considerably greater than the American interests, and for other reasons, took the position that if the British and Dutch Governments directly approached this Government with practical suggestions for cooperation this Government would be prepared to give sympathetic consideration thereto.
The representative of Shell expected to reach London on August 31 and talk with the British Foreign Office. Meanwhile, Department has received on August 29 a telegram from London27 quoting the text of a memorandum handed by the Chief of the Department of Far East of the Foreign Office to Bingham.28 Memorandum states certain facts in the situation; says the British oil interests affected have expressed apprehension at the prospect of having to invest large capital sums in increased storage plants without the certainty of a proper return; that British Government is disposed to support them in resistance to these [Page 729] measures and that, as an American company is also affected, British Government would be glad to learn what is the attitude of the American Government in the matter. Telegram continues, that Foreign Office official said he understood that Shell representatives had discussed the matter with Socony but did not know their views; that Foreign Office understood that Japanese plan if carried out would entail expenditure of 2,000,000 pounds by Shell alone for construction of tanks; that the British Government did not like extensive increase in oil tank storage in Japan; that the Dutch oil interests could be controlled by Shell; and that Foreign Office considers the matter urgent.
Department has telegraphed, August 31, instructing London29 urgently to state to Foreign Office that the objections raised by the interested oil companies against certain provisions of the petroleum industry law seem to us well founded and American Government is prepared to give sympathetic consideration to proposals which the British and Dutch Governments may care to offer toward attaining by joint or concurrent action an amelioration of the situation under reference.