894.6363/76: Telegram
The Secretary of State to the Ambassador in Japan (Grew)
Washington, September 21, 1934—8
p.m.
162. Your 205, September 19, 11 a.m. Please make the following communication orally and informally to the Minister of Foreign Affairs. If and when he asks for a copy, you may give him one without entitling it memorandum or aide-mémoire.
- “1. The American Government has noted that enactment by the Japanese Government of a law (Law No. 26 of March 27, 1934) for the control of the petroleum industry in Japan and, in view of the substantial participation of American interests in that industry, it is moved in all friendliness to invite the attention of the Japanese Government to the disabilities which the law under reference threatens to impose upon American petroleum interests in Japan.
- “2. The American firms concerned are convinced that, if, as a condition to continuation of their business in Japan, they are to be required to install equipment and maintain stocks of oil and of oil products in excess of their ordinary commercial requirements; if the required stocks are to be subject to purchase by the Japanese Government at a price to be fixed by that Government; if there is likelihood or possibility that quotas will be prescribed regardless of the amount of business done in the past by firms that may be affected; and if there is likelihood or possibility that quotas may subsequently be raised or be lowered at will;—these firms would not be able to formulate long-term plans for the reasonable safeguarding of their enterprises in Japan and would find it impossible to invest with any sense of security funds necessary for the operation of those enterprises. Accordingly, it is felt that subjection of their enterprises to such conditions and the meeting by the companies of such requirements would be tantamount to a laying upon the companies of special burdens the effect of which would be a contribution to a national objective of Japan at heavy cost to the American enterprises concerned but with no advantage or compensation to the enterprises themselves.
- “3. In view of the destructive effect which application of certain provisions of the law would presumably have upon legitimate and established interests developed over a period of many years by American enterprise in response to economic needs of the Japanese people, the American Government expresses the hope that the Japanese Government will see its way clear to avoid subjecting American petroleum interests in Japan to the unusual hazards and the burdensome restrictions upon the normal conduct of business which are apparently implicit in the law under reference.”
Report by telegraph when action is taken.
Department is instructing London to inform the British Foreign Office.
Hull