693.116/80: Telegram

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

722. Legation’s 701, August 23, 10 a.m. Following from American Consul, Canton, to the Legation and Nanking:

“August 29, 10 p.m. Legation’s August 23, 10 a.m. British Consul General and I called on Foreign Office representative on August 24 and protested that notwithstanding the assurances given by the authorities on August 17 no action has been taken towards releasing stocks of kerosene of foreign companies in the hands of native dealers which had been sealed nor had action been taken on the applications of foreign companies for registration.

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Yesterday, again we called on Foreign Office representative and told him that the foreign companies had been informed by the Reconstruction Bureau that it would require at least 10 days to act on their applications, that they would be required to fill in a comprehensive questionnaire regarding details of their business which we considered irrelevant, that the local Trademark Bureau could not enforce Nanking trademarks and that special privileges would be granted to factories which had been registered prior to July 23rd in respect to output restrictions. We emphasized that we had understood that ‘registration’ referred only to recording the names of the factories and their brands and that we considered any regulations which restrict the freedom of trade of oil companies to be in contravention of treaty rights. We asked him to present our views to the meeting of the Southwest Political Council of this morning.

Today Socony obtained form of application for registration which if filled out would engage them to submit to Chinese control and involve loss of extraterritorial rights. We have advised the companies not to register under the circumstances.

Foreign Office representative said that he discussed our representations of yesterday with the Chairman who is concurrently Commissioner of Reconstruction and who promised to give the matter consideration. He said that the matter was not brought up at the meeting of the Political Council.

Under the circumstances the British Consul General and I have requested another interview with the Chairman and Marshal.”

The above would appear to indicate that the Southwest Political Council is reluctant to permit the foreign oil companies to compete on equal terms with the Chinese firms in which members of the Council are reported to be financially interested. However, the Legation still believes that a satisfactory solution of this question may eventually be obtained by continued representations at Canton.