Memorandum by the Second Secretary of the American Embassy in Japan (Benninghoff) of a Conversation With the Director of the American Bureau of the Japanese Ministry for Foreign Affairs (Terasaki)
I took up with Mr. Terasaki the question of interference with the petroleum trade in the Canton area, mentioning the monopolistic character it had assumed; I gave him the “oral statement” which had been prepared.86a He said that he was not familiar with this particular aspect of trade in the Canton area, but he suggested that the restrictions might be connected with the use of military notes, and with the fact that they may have been instituted in connection with the Japanese effort to prevent supplies from being smuggled from occupied to unoccupied territory. I pointed out that my representations had to do only with trade in occupied territory, and that it seemed strange to the American company to see its customers supplied by a Japanese company without being able to compete in the trade at all. I mentioned the fact that in some instances the Hirakawa Yoko, a Japanese oil firm, had been designated as the agent, thereby creating the anomaly of an American firm being forced to work through a Japanese competitor.
In this connection, Mr. Terasaki said that he had for some time been trying to bring about an alleviation of the various restrictions on trade in occupied territory. He felt that perhaps he had made some progress, but results would be slow as in all these matters it was necessary to preserve the “face” of the military; furthermore, he was up against a growing anti-American feeling engendered by increased American aid to China. Many Japanese, especially those who have lost relatives, are not disposed to consider American protests because of the “enemy character” increasingly assumed by the United States. Mr. Terasaki did not necessarily imply that these were his own arguments, so I refrained from pointing out that American [Page 905]aid to China was brought on in the first place by Japanese actions.
Mr. Terasaki said that he would investigate the difficulties of the Standard Vacuum Oil Company and see what could be done. He felt that progress would be slow and that better results would be obtained by not pressing the matter too urgently at the present time.