Minister Griscom to the Secretary of State.

No. 32.]

Sir: * * * The legation has investigated the complaint made by American firms exporting Japanese teas that the government tea subsidy was, in effect, a bounty to native dealers and therefore a discrimination against foreigners.

While no positive proof has been obtainable, yet the facts appear to bear out, in general, the complaint of the Americans interested. The department of agriculture and commerce turns over for expenditures the subsidy to the Tea Traders’ Guild, an exclusively Japanese organization including all the native competitors of the foreign firms, and this fact in itself warrants a strong presumption that the advantages of the subsidy are not shared by the foreign firms.

By way of taking up the matter with the Japanese Government I handed in a memorandum on October 27, touching upon the objections made to the manner of expenditure of the subsidy and requesting the government’s assistance in furnishing some detailed information on the subject. I am now in receipt of a memorandum from the department of foreign affairs, which, however, fails to throw any light on the subject. I have the honor to inclose copies of these memoranda. It will be noted that the statement is made that the appropriation for this subsidy ceases at the end of this fiscal year. It should, however, be remarked that no assurance is given that the proposition will not be renewed in the next Diet as a government measure and a new appropriation made. * * *

I have, etc.,

Lloyd Griscom.
[Inclosure 1.]

Minister Griscom to the Minister of Foreign Affairs .


The Government of the United States has directed its legation in Tokyo to investigate certain statements made by American citizens engaged in tea trade with Japan in relation to the manner in which is expended the appropriation made by the Imperial Government for the promotion of the export of manufactured teas.

In the statements in question is contained the allegation that the money so appropriated, instead of being expended by responsible officials of the Imperial Government and publicly accounted for, is turned over to an exclusively Japanese organization of interested parties, [Page 574] namely, the Tea Traders’ Guild, and by it expended in such a way that the exact details thereof are not made public.

It is hoped that the imperial ministry of foreign affairs will courteously assist the legation in its inquiry by furnishing some detailed information as to the manner in which the appropriation referred to is expended.

[Inclosure 2.—Translation.]

The Minister of Foreign Affairs to Minister Griscom.


His Imperial Majesty’s department of foreign affairs is in receipt from the legation of the United States of America in Tokyo of a memorandum dated the 27th October last relative to the manner of expenditure of the appropriation for the encouragement of the export of tea.

It is assumed that the appropriation referred to means the subsidy to the amount of seventy thousand (70,000) yen per annum granted for a period of seven years from the thirtieth fiscal year of Meiji (1897-98) by the Imperial Government in accordance with their decision made prior to 1897 and given to the central association formed by the different Tea Traders’ Guilds in the whole country.

Concerning the said subsidy, its working, estimate, and accounts are placed by the Imperial Government under the supervision of the minister of agriculture and commerce, but no detailed account thereof has hitherto been made public, as such a course was deemed unnecessary.

The Central Association has caused the various guilds to contribute tens of thousands of yen as funds for introducing improvements in the manufacture of teas, so that the field of their sale may be extended, while the inhabitants of the United States and Canada, the greatest customers of Japanese tea, are supplied with good and pure tea.

The association has, moreover, expended its own funds for examining teas destined for exportation, and has established agencies at the principal markets in the United States and Canada for the purpose of gathering information at all times with a view to encourage the manufacture of such qualities as would be satisfactory to customers in various countries.

The association has also from time to time dispatched persons to Europe with instructions to make inquiries and report on the actual condition of the tea markets there.

The association has thus endeavored, on the one hand, to see the products improved at home, and to promote, on the other hand, the interests of all exporters of tea, irrespective of their nationality.

And the subsidy in question has been used to defray in part the expenses required in such undertakings.

It may be observed in this connection that the appropriation is to cease at the close of the present fiscal year.