693.116/64: Telegram

The Minister in China (Johnson) to the Acting Secretary of State

600. 1. Department’s 249, July 13, 7 p.m. Following from Consul General, Canton: [Page 571]

“July 17, 5 p.m. My July 12, 2 p.m. Yesterday at Mayor’s request British Consul General and I sent identic notes to him confirmatory of our representations.

I also communicated the substance of the Legation’s July 12, 4 p.m., to the Mayor orally this morning for reference in connection with a meeting which he informed me was being held today to consider this matter, and I am confirming in writing what I said. Later, at a casual meeting, the Mayor’s secretary informed me that the local government has decided to prepare a reply to the effect that they are not prohibiting local refining by foreign oil companies but are stopping sales of unregistered brands which they maintain is not in contravention of the treaties. In conversation with Chinese authorities British Consul General and I have made it clear that we were not objecting to reasonable regulations requiring registration but to the fact that existing laws make it impossible for foreign concerns to register. Although I shall not know exactly what their position is until a report is received, I am convinced that the local government intends to adopt an evasive and shifting attitude on the entire question as long as possible, meanwhile glutting the market with products of Chinese refiners.

It is possible that it might be productive of good if the Legation could request National Government to instruct Regional Inspector General of Foreign Affairs here to demand that local authorities discontinue restrictions on sale of brands of kerosene put out by American concerns. Repeated to Nanking.”

2. In view of the apparent urgency of this case the Legation has instructed Secretary Smyth in charge at Nanking to take the action suggested in penultimate paragraph but to bear in mind the attitude of the Department towards registration of American firms as set forth in the Department’s instruction to the Legation 266, September 26, 1930,85 which was circulated to Consuls.