711.94/852: Telegram
The Secretary of State to the Ambassador in Japan (Grew)
97. Embassy’s 154, October 11, 10 a.m.49c In the event Hirota should request you to specify instances and cases of discrimination, your answer should be that at the present time you are less concerned with specific cases of discrimination and more with acts and policies of Manchukuo which are in effect now or are contemplated and which derogate from conditions permitting of free and equitable competition. The project for an oil monopoly which is reported to be under consideration is an example of these policies and acts.
The Department does not understand how, without violating rights assured under existing treaties, it would be possible to confer privileges of preemption on organizations which in character are not purely native and thereby to exclude American participation in any line of production or commercial industry. Likewise, it is our opinion that, except in contravention of existing treaty rights, the proposed banking law which would require American banks operating in Manchuria to deposit currency or securities with Manchukuo could not be enforced.
As a specific example of discrimination you may cite levying at Manchurian ports of a lower duty on Japanese oil than on American oil.
- Not printed.↩