Office of the Historian

893.6363 Manchuria/58: Telegram

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

Tokyo, October 29, 1934—6 p.m.
[Received October 29—9:15 a.m.]

238. Department’s 183, October 26, 6 p.m.

1.
I do not believe that informal conversations in Hsinking or more formal representations in Tokyo, based on allegations of violations of treaty rights and perhaps the principle of the open door, will prove effective unless backed up by some indications of proposed practical steps on our part. The Japanese are sure of the impregnability of their political and economic position in the Far East and are in no mood to recede from their stand, regardless of protestations from other countries. The Japanese Army and Navy clearly desire Japanese control of the oil industry and are well known to be intransigeant.
2.
It appears to me that the time has come to link together, in any future conversations or representations in Tokyo, the oil control system in Japan and the proposed oil monopoly in Manchuria, because the two systems appear to be designed to operate together to give the Japanese practical mastery over the oil trade of Japan and Manchuria and would enable them eventually to drive out our long-established oil interests.
3.
The Embassy is not aware whether the Government of the United States possesses the requisite legal authority or considers feasible the use of such authority to embargo or restrict the export of certain types of crude oil to Japan as envisaged in paragraph 8 of the Embassy’s telegram No. 182, August 20, 3 p.m., and in the strictly confidential section of despatch No. 1001, October 5, 1934. If the answer to the foregoing points is affirmative it would appear that the time has come to give to the Japanese Government some intimation that the United States does not consider it the part of wisdom to supply the Japanese refineries in Japan and in Manchuria with the raw material with which to drive the products of our oil refineries out of the markets in this part of the world and invalidate the heavy investments already made by American capital in installations and general outlay in this country and in Manchuria.

Repeated to Peiping.

Grew