893.6363 Manchuria/288
The Consul at Dairen (Grummon) to the Ambassador in Japan (Grew)73
Sir: Referring to the Consulate’s despatch dated April 13, 1936,74 concerning the reported defection of the Texas Company from the [Page 793] position hitherto assumed by it, jointly with the two other foreign oil companies concerned, of refusing to supply the Petroleum Monopoly with their products, I have the honor to report that it now appears certain that the Company has definitely abandoned that position. On April 16th last the press announced that following protracted negotiations, an agreement had been effected whereby the Texas Company on the previous day sold 100,000 cases of gasoline out of “stock” to the Monopoly. I am reliably informed however that actually the sale amounted to 114,000 cases, of which only about 15,000 cases were from stock, while the balance—some 99,000 cases—consisted of newly imported products. It is estimated that this new stock will permit the Monopoly to carry on fairly well for approximately one month. It was acquired just in time to avert a serious shortage which would” have ensued but for these opportune arrangements. The urgent need for this material is indicated by the fact that before the end of the present month a total of 67 carloads of refined products are required to be delivered in 2 and 3 carload lots to the various agencies of the Monopoly at Harbin, Hsinking (Changchun), Tsitsihar, Ssupingkai, Newchwang, Shahochen and Antung.
In this connection it is of interest to note that the Standard-Vacuum Oil Company, together with the other foreign companies prejudiced by the Monopoly, have consistently refused to bid on gasoline for the Japanese Military in North China owing to lack of assurance that the Army would not divert purchases made by it to the Monopoly. Repeated requests for their products have been received from Army sources, the latest, a few days ago, for 200,000 cases to be delivered to Tientsin. The future attitude on this subject of the Texas Company is now a matter of anxiety to the other two companies, although there would seem no reason why it should maintain its united front as regards the Army, having relaxed it with respect to the Monopoly.
The total shipments of crude oil received by the Monopoly thus far for this year amount to approximately 27,000 tons, divided as follows:
| January | 2 | From San Francisco Per S. S. Nore | |
| 11,243 | metric tons Casinghead Gas. | ||
| February | 26 | From San Francisco Per S. S. Nore | |
| 1,490 | kilo liters untreated Kerosene. | ||
| February | 27 | From Yokohama Per S. S. Kuisaku Maru | |
| 1,259.76 | metric tons Crude Oil. | ||
| March | 12 | From Yokohama Per S. S. Kuisaku Maru | |
| 1,239.854 | metric tons Crude Oil. | ||
| April | 2 | From Estero Bay Per S. S. Yeiyo Maru | |
| 11,582 | metric tons Crude Oil. | ||
| April | 26 | From Elwood Per S. S. Toyo Maru | |
| 12,398 | metric tons Crude Oil. | ||
| May | 22 | From Wilmington Per S. S. Evita | |
| 8,900 | metric tons Gasoline. | ||
In addition, 12,000 tons of Persian oil are now en route from Bahrein. They were purchased there from the wells of the Standard Oil Company of California. The previous report that they were Roumanian products is unfounded.
Two officers of this Company, Messrs. J. U. Landes and B. Randanne Vazeille, who have recently visited the Company’s refineries in Europe and the Near East, arrived in Dairen last night en route to California via Tokyo. Although one might assume their visit to Dairen to be for the purpose of discussing future supplies with the Monopoly authorities, Mr. Landes, in the presence of an officer of the Consulate, denied that he had come for that purpose and stated that he did not expect to see any one connected with the Monopoly. In support of this statement, Mr. Landes indicated that as his Company has just erected a new refinery at Bahrein, it is not desirous of selling further crude petroleum at present.
Respectfully yours,