Office of the Historian

894.6363/234: Telegram

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

Tokyo, December 19, 1935—3 p.m.
[Received December 19—9:40 a.m.]

246. Department’s 199, December 13, 7 p.m. Oil.

1.
In the course of a conversation on other matters yesterday the Chief of the Commercial Bureau of the Foreign Office on his own initiative asked Neville whether the letter of the oil companies meant that the companies intended to defy the Japanese Government. Neville replied that so far as he knew it meant that they could not comply with the law as commercial proposition and would be unable to do business in Japan under its terms. Kurusu said that this decision had seriously disturbed the Department of Commerce and Industry and that something would have to be done about it because if the oil companies were to withdraw other arrangements would have to be made to obtain necessary oil supplies in Japan. He said that it was his intention to speak to the local Standard and Shell managers before anything further developed.
2.
The British Ambassador on December 17, brought up the oil question with the Minister for Foreign Affairs in the course of a conversation upon other matters along the lines indicated in Embassy’s 240 and added that it was known that the military were responsible for the present law but that it was unreasonable to expect the companies to bear the expense of storing oil uneconomically for military requirements. The Ambassador said that he was not speaking under instructions. The Minister for Foreign Affairs replied that the question would probably be aired in the Diet because of the postponement of the enforcement of the law until July 1st and that he hoped that some solution might be found either before or when explanations were given.
3.
In view of the fact that the British Ambassador has raised the oil question in the course of a conversation only incidentally, and also in view of the remarks of the Chief of Commercial Bureau which indicates that the Government is giving the matter serious attention, [Page 938] I do not think that anything is to be gained by my seeking an interview with the Minister for Foreign Affairs for the express purpose of discussing the question at this juncture. Unless otherwise instructed I shall therefore take occasion to bring up the matter when I next see the Minister or the Vice Minister on some other subject.
Grew