The American Embassy in Japan to the Japanese Ministry for Foreign Affairs
The Japanese Government will recall the repeated representations of the Government of the United States in regard to the discriminatory treatment accorded American trade in North China as compared with treatment accorded Japanese trade as result of the control exercised by the Japanese-sponsored authorities there over the exchange accrued from exports and thus indirectly over imports. The Government of the United States is not aware that there has been any amelioration of the situation thus complained of. It is now learned that the Japanese Government-controlled authorities in North China have established full exchange control over imports as well as over shipments from Central and South China thus completing their control over the trade of the area.
Under new regulations which have been issued, a merchant desirous of importing into North China cereals from any country or region other than Japan or Manchuria must obtain from a local bank an “application for buying exchange” confirmed by the “Federal Reserve Bank”. An importer of any other commodity from any other country or region other than Japan or Manchuria must, unless he is able to obtain a permit for import “without exchange”, obtain approval from the so-called Federal Reserve Bank of an “application for indent” even as a prerequisite of “linking” his imports with corresponding exports if he is able to arrange such a transaction. Moreover, no provision whatever has been made in the new regulations for imports on consignment, the method used by large distributors of petroleum products, dyes, chemicals and other lines. American business men in North China gravely apprehend that the new regulations will result in an enforced sharp decline in trade with the United States. The additional disabilities imposed on non-Japanese trade with North China are oppressive. Meanwhile, under the trade and currency system which has been set up by the Japanese-controlled authorities in North China, Japan’s trade with North China is allowed to continue practically on the same basis as domestic trade.
The Japanese Government has heretofore declared its intention to uphold the principle of equality of treatment in China. The notice issued by the Superintendent of Customs at Tientsin in connection with the new regulations specifically exempts imports from Japan or Manchuria from the application of those regulations and thus publicly advertises that the regulations are discriminatory.[Page 862]
The Government of the United States makes full reservation of rights in regard to these discriminations and emphatically requests that they be removed. An early reply is requested in regard to the intentions of the Japanese Government in regard to this matter.