893.61331/146
The Acting Secretary of State to the Ambassador in Japan (Grew)
Sir: There are enclosed copies of two letters under date February 25, 1939, from the Universal Leaf Tobacco Company and a copy of the Department’s reply thereto in regard to the difficulties which the Universal Leaf Tobacco Company is experiencing at Tsingtao. There is enclosed also a copy of a memorandum of conversation between officers of the Department and officers of the Universal Leaf Tobacco Company.22
The Embassy will note that the interference reported by the Universal Leaf Tobacco Company appears to be especially flagrant in that the Japanese military authorities insist that the company buy with foreign exchange a large amount of “Federal Reserve currency” before permission will be given for the company to engage in transactions [Page 386] involving the purchase of tobacco in Shantung and its sale in other parts of China. The company states that it is the only non-Japanese or non-Chinese firm engaged in this particular business and that the requirement of the purchase of “Federal Reserve currency” with American dollars does not apply to its competitors.
The Department desires that at the first appropriate opportunity you bring this case to the attention of the Japanese Foreign Office and ask that effective action be taken to remove the discrimination and interference complained of by the company.23
Very truly yours,