Historical Documents - Office of the Historian

“June 23, 5 p.m. Your June 17, 3 p.m.

1.: Reference is made to this Consulate’s despatch No. 1237, dated June 10, which dealt in a general way with the subject of Japanese interference with American trade in the Shanghai area.
2.: It has been necessary when shipping supplies to American mission stations in the interior either to employ the facilities of foreign gunboats proceeding in their normal movements to river ports or to make special arrangements with the Japanese authorities. However, this particular question is of secondary importance to that of obtaining passes for the return of missionaries to interior stations.
3.: The chief complaints in regard to the interference with American trade are on the general grounds of (1) definite refusal to return the areas north of Soochow Creek to the full control of the Shanghai Municipal Council and the restrictions on the Nantao, Pootung, Hungjao and other areas in the vicinity of Shanghai; and (2) the exclusion of Americans and American business from these areas and from the hinterland.
4.: With respect to item (1) paragraph 3, conditions in the former warehouse areas north of Soochow Creek are such that many missionaries are now storing their goods south of the creek, where storage, transport and other charges are much higher. Cargo removal is a tedious matter requiring the approval of four different offices and, if stored in the China Merchants wharves, the payment of a removal fee. Industrial operation is rendered difficult by the necessity for individual passes for Chinese employees and special agreements for their daily transportation.
5.: As regards item (2) paragraph 3, the extent of Japanese interference with American trade in the interior is almost absolute. Practically [Page 772] no American business is being done except indirectly and on a small scale. There is involved not only a complete denial of freedom of movements but also denial of access to property. Outstanding unsettled cases are the River Trading Company, access to Point Island (reported to the Department in detail in this Consulate General’s telegram No. 790, June 7, 6 p.m.14) and the desire of the Standard Vacuum Oil Company, Texas Company and the Cathay Oil Company to have access to their properties on Point Island and the first two companies to send representatives to Nanking. Restrictions are still being placed on the navigation of inland waterways, including the Yangtze. Passes were secured for the Dollar Company for navigation on the Whangpoo River above the Nantao boom only after much effort, while an application by the Everett Steamship Company for a pass has not been approved. Launches belonging to the Dollar, Standard Vacuum Oil and Texas Companies have been stopped and searched on occasion by Japanese river police. The railways in this area are not yet opened to foreign commercial use and highway transportation is under Japanese control. The movement of American-owned cargo is being interfered with; outstanding cases are the Henningsen Produce Company (reported to the Department in this Consulate’s telegram No. 781, June 5, 7 p.m.14) and the present refusal to permit wood oil belonging to Werner G. Smith Company to be brought to Shanghai from Nanking.
6.: There are many outstanding cases of occupation of property but most of these involve missionary establishments and will not be covered in this report. There are, however, several unsettled cases of the seizure of American goods. These include the seizure of a stock of tobacco belonging to the Carolina Leaf Tobacco Company (see this Consulate’s 872, June 20, 6 p.m.14) and a lighter of the Shanghai Lumber and Coal Company.
7.: American shipping interests may be expected to suffer from the deterioration of the harbor and its approaches, which is a result of Japanese interference with the work of the Whangpoo Conservancy Board.
8.: Other indirect interferences with American trade are: Uncertainty as to rates and universality and rigidity of the so-called new Chinese customs tariff which in some instances is working a hardship on American firms because of increased rates; multifarious taxation by Japanese-controlled puppet organs; difficulty of getting passes for Chinese employees; and, especially, the long delays and protracted negotiation involved in obtaining passes or the settlement of even the most clear-cut cases.

Repeated to Peiping.”

“June 22, 10 a.m. Embassy’s June 17, 3 p.m. The Standard Vacuum Oil Company and the Texas Company, China, Limited, are the American business interests chiefly affected by the Japanese occupation of Amoy and by their virtual blockade of all Chinese transportation facilities along the Fukien coast. The first-mentioned company’s normal monthly turnover of business amounted to United States dollars 450,000 but since May 10th has been reduced to less [Page 773] than 5% of that amount. The stocks of the latter-named company are stored in Amoy and since the Japanese occupation its representatives have not been allowed to return to Amoy and its normal monthly turnover of business has been reduced from United States dollars 12,005 to nothing since May 10.”

“June 18, 1 p.m. Your June 17, 3 p.m. There is no American trade in Nanking with the exception of small sales from local stocks of lumber to the Japanese military authorities made by a Chinese representative of the Robert Dollar Company. Up to the present time, the representatives of the Standard Vacuum Oil Company and the Texas Company (China) Limited, have not been permitted to return to Nanking and no American oil or gasoline is being sold in the city. The Japanese military have imported from Shanghai for their own use a certain amount of Standard Oil products and approximately one thousand gallons of gasoline left in the local installation of the Texas Company were sold to the International Reorganization Committee through the mediation of the Embassy. American firms with smaller interests here such as the Singer Sewing Machine Company, Andersen, Meyer and Company, and the Chinese Engineering and Development Company have been unable to do any business and have not even been permitted to send representatives here to investigate the present state of their affairs.

With regard to the shipment of supplies to American mission stations, this can only be done by sending them on American or British gunboats which maintain periodic trips between here and Shanghai. It has recently proved difficult to effect the landing of such supplies as Japanese gendarmes insist upon making a thorough search of them, ostensibly for the purpose of preventing the importation of unauthorized military supplies. This search even extends to the personal luggage of American missionaries returning to Nanking. The Japanese Consul General has recently indicated that some arrangement might be made whereby the military would not insist upon searching all supplies if the Embassy would indicate in writing the nature of such supplies.”

“June 21, 10 a.m. Replying to your cipher telegram of June 17, 3 p.m., Japanese authorities have prohibited shipments of kerosene, gasoline and lubricating oil to interior points in eastern Shantung, destroying annual business of two American oil companies amounting to 1,500,000 dollars local currency. Annual business under present restrictions confined to local oil sales Chefoo estimated at one tenth of normal business. New currency regulations requiring payment of import duties in Federal Reserve banknotes or northern banknotes hampering importers of American merchandise and exporters of lace and embroidery, shipping to the United States, who import raw materials for manufacturing purposes. Arrangements must be made to supply currency for payment of customs or very profitable export trade will end. While Japanese have prohibited shipments of foodstuffs to interior, all American missionaries in Chefoo Consular District so far have been able to receive their supplies without Japanese interference [Page 774] when accompanied by certificates from this Consulate with the exception of gasoline for which, upon request, the Japanese naval authorities have supplied shipping permits. Japanese now require all Chefoo firms to produce codes at telegraph office for decoding all incoming and outgoing messages thus delaying the delivery of code messages.”

“June 22, 3 p.m. Your June 17, 3 p.m. American trade in North China is not seriously handicapped by interference on the part of the Japanese military except as a result of manipulation of the currency, Japanese monopolies on wool and furs, the generally disturbed situation (particularly regarding communications which prevents the transportation of native products to Tientsin for export) caused by the Japanese military occupation of this area which has cut Tientsin off from its most important sources of supply of export products, driven out large numbers of the wealthier Chinese merchants, and reduced the whole area away from the railways to a state of chaos which precludes any possibility of normal trade.

The Consulate General has inquired of mission organizations represented in Tientsin and is unable to learn of any direct interference by the Japanese military with the shipment of supplies to American mission stations in the interior although such shipments encounter, the same difficulties as other goods due to the very extensive use of railways and other transportation facilities for the transportation of Japanese military supplies. An American missionary who came to Tientsin last month to obtain supplies for a hospital in the interior of Shansi is reported to be returned safely to his station with these supplies with the assistance of the Japanese military. Sent to Embassy at Peiping, repeated to Embassy at Hankow.”

Papers relating to the foreign relations of the United States, Japan, 1931–1941, Volume I

The First Secretary of Embassy in China (Salisbury) to the Secretary of State