Oral Statement by the Japanese Minister for Foreign Affairs (Matsuoka) to the American Ambassador in Japan (Grew)82

I have taken note of the communication of Your Excellency of September 18 with reference to American trade in petroleum products in China. The note covers a great number of cases in various parts of China, including those regarding which we have not been fully informed and are awaiting reports from the authorities on the spot. However, in the light of what we know, I can say this much for the present.

From a general examination of the cases mentioned in your note, the alleged interferences may be traced to: (1) restriction or prohibition of shipments into unoccupied areas; and (2) enforcement of price-fixing policy.

As regards the first category, I wish to point out that as long as Japan is engaged in war operations on a huge scale it is quite proper for our military authorities on the spot to prevent various supplies from reaching the armies of Chiang Kai-shek and guerrilla bands. If in order to prohibit the shipment of certain commodities into enemy territory or to prevent the passage of these goods from the occupied area into the unoccupied, restrictions on shipment, or systems of licence [Page 900]or control are established, there should be no grounds for censure. And if it is true that in certain areas, under the control system only Japanese firms are permitted to make sales, it is simply because that the prevention of commodity leakage from such areas is so difficult that only Japanese firms fully subject to the control of our military authorities can be allowed to do business. I believe, when firms of third countries are willing to submit as fully to the same control, the alleged discrimination will be avoided.
As regards the question of price, it is scarcely necessary to dwell upon the imperative need of enforcing a suitable price policy as an unduly high cost of living is bound to affect adversely the welfare and stability of the people in occupied areas. Accordingly, prices are being regulated, not only for petroleum products alone but other commodities in general. It is a measure our army charged with the responsibility of maintenance of peace and order in the occupied areas is most properly entitled to take. All restrictions in this connection are applicable alike to Japanese subjects and the nationals of third countries, there being no intention on [of?] the authorities concerned to discriminate against the latter.

I should like to add that with regard to the individual cases mentioned in your Note, we have ordered, as I have just said, our authorities on the spot to conduct investigations. In the light of these investigations, we may discover something that we could do. At least, we shall be able, I believe, to reply in more precise and concrete terms.

  1. The Ambassador in Japan commented on this statement in his despatch No. 5226, December 20, 1940, as follows: “It will be observed that the communication in question is completely unsatisfactory and unresponsive to the Embassy’s representations on this subject.”