611.939/404

The American Ambassador in Japan (Grew) to the Japanese Minister for Foreign Affairs (Matsuoka)

No. 1653

Excellency: I have the honor to refer to representations made by my Government to the Japanese Government on frequent occasions during the last three years regarding interference with American enterprise and trade in China by the local Japanese authorities, as well as by local regimes under Japanese control. For the [Page 884]most part, those representations, in which my Government has called attention with patience and persistence to the curtailment of American interests and rights, have received unsatisfactory replies from the Japanese Government. By virtue of a widespread system of exchange and trade controls in North China which culminated on June 28, 1940, in the institution of a complete and discriminatory control of exchange, American trade with that area has come to a virtual halt. Abundant indications have appeared in the course of recent weeks that the Japanese military authorities intend to institute similar controls over the very important trade of Shanghai. American firms have been practically shut out of the trade in egg and petroleum products [omission?] has been subjected, with constantly increasing vigor, to restrictions of an arbitrary nature, by the Japanese military—Japanese firms having at the same time been given commensurate advantages. My Government has now learned that at Shanghai the Japanese military authorities intend within the near future to impose restrictive measures, with widespread exchange and trade control, which will affect nearly one-third of the export commerce of Shanghai with countries outside of the yen bloc, among which measures will be the requirement that exchange produced by the export of specified commodities shall be disposed of to Japanese banks, thus at one stroke injuring American banking enterprise as well as the American export and import trade. American enterprise having been practically eliminated from Manchuria, and American enterprise and trade in the North China area having been reduced to insignificant proportions, it now appears to be the intent of the military authorities of Japan to force American enterprise and trade out of Shanghai, the most important commercial center in China.

My Government has duly noted the additions, recently imposed as well as those planned, to the long list of hindrances which have unjustifiably been placed in the way of American enterprise and trade by the authorities and agencies of Japan in China.

I avail myself [etc.]

Joseph C. Grew