894.6363/141
The Ambassador in Japan (Grew) to the Secretary of State
[Received December 1.]
Sir:
. . . . . . . . . . . . . .
There is little doubt that the stock-holding provision of the Petroleum Industry Law is largely a military measure, designed to build up [Page 759] reserves of oil in Japan for use in case of war. It may be difficult to adduce evidence that any official pronouncement was ever made to this effect, but considerable unofficial evidence can be found to support this contention. Thus, there is enclosed herewith an excerpt54 from a speech made by Mr. K. Hashimoto, the President of the Nippon Oil Company, on October 27, 1934, before the stockholders of the Nippon Oil Company, in which the statement is definitely made that the stock-holding provision is a measure of national defense. Viewed in this light, it is respectfully suggested that a new line of attack on the stock-holding provisions might be adopted, by claiming that forced storing of oil by American firms to provide a war-time reserve for Japan conflicts with the last paragraph of Article 1 of the Treaty of Commerce and Navigation of 1911 between the United States and Japan,55 which reads as follows:
“They shall, however, be exempt in the territories of the other from compulsory military service either on land or sea, in the regular forces, or in the national guard, or in the militia; from all contributions imposed in lieu of personal service, and from all forced loans or military exactions or contributions.”
If the Department considers that there is any possibility that this line of action could be adopted, the Embassy will gather and transmit to the Department all possible evidence indicating that the stock-holding requirement is a “military exaction”.
Respectfully yours,
- Not printed.↩
- Foreign Relations, 1911, p. 315.↩