893.6363 Manchuria/10
The Consul at Dairen (Vincent) to the Ambassador in Japan (Grew) 56
Sir: I have the honor to acquaint the Embassy with certain instances of Japanese efforts to obtain information regarding the trade and organization of the Socony-Vacuum Corporation in Manchuria. The Corporation feels, and I believe rightly, that these requests for information are connected on the one hand with plans for the organization of a Manchurian oil company, and on the other, with a desire on the part of the Kwantung Army to know sources, quantities, and location of petroleum stocks in Dairen and Manchuria.
The manager of the Mukden office of the Corporation first brought this matter to my attention. In a letter addressed to his head office in Shanghai, copy of which was sent to the Consulate, he states that two young Japanese from the “Manchukuo” Bureau of Finance called at his office on November 27th and requested the following information: (1) agency organization; (2) retail prices; (3) source of supplies; (4) ownership of tankers bringing supplies; (5) cost price of supplies; (6) and annual deliveries in Manchuria. The manager gave, in a general way, the information requested in (1), (2), (3), and (4). Regarding (5) and (6), he stated that he did not know the cost price of supplies, and that the amount of deliveries in Manchuria was a trade secret which he was not authorized to divulge.
Last week the manager of the Dairen branch office of the Corporation showed me three letters which he had received during November requesting information. One was from the Dairen Civil Administrator’s office and requested information concerning the amount of stocks. I advised him to comply with this request as the Civil Administrator had a right to the data in connection with taxation. Another was from the Dairen Chamber of Commerce stating that, on behalf of the Kwantung Government, it wished to have information concerning cost and retail prices of petroleum products, sources, stocks, and deliveries. The local manager had decided to ignore this request. Another was from the Dairen Chief of Police [Page 743] requesting (1) origin and amount of imports for one year (November 1, 1932, to October 31, 1933), (2) export deliveries (to Manchuria) with quantities and destination for the same period, and (3) stocks maintained at the Dairen installation. Although the manager had orally informed the office of the Chief of Police that he was not in a position to give him this information, he has received several requests by telephone urging early submission of the data.
In compliance with the written request of the local manager, acting under instructions from the Corporation’s Manchurian head office at Mukden, I have written to the Acting Chief of the Foreign Section of the Kwantung Government, explaining his position, and transmitting his suggestion that the Chief of Police apply to the Mukden head office for the information and his inquiry as to the authority and purpose of the Chief of Police’s request. A copy of my letter is enclosed.57
It is not surprising that the Kwantung Army should wish to be informed concerning the amount, source, and location of petroleum stocks in Manchuria. It is surprising that it should use such agencies as the Dairen Chief of Police and the Dairen Chamber of Commerce to obtain this information.
The Dairen manager of the Socony-Vacuum Corporation also informed me that during recent months, officers of the Kwantung Army, usually accompanied by an official of the Manchuria Air Transport Company (an organization of the Army) had called frequently at his office and requested that they be shown over the installation. He has complied with their requests but specific questions regarding tankage and technicalities connected with the operation of the plant have been evaded. Similar visits have been made to the installations of the Texas Company and the Asiatic Petroleum Company. These companies have also received requests similar to those addressed to the Socony-Vacuum Corporation and both companies, I understand, have evaded compliance.
The plan of the Kwantung Army with respect to oil business in Manchuria appears to be twofold. First it is desirous of providing for increased stocks of petroleum, particularly gasoline, in Dairen and Manchuria. The hurried construction of eight tanks by the Manchuria Air Transport Company is one evidence of this desire, and the plan for the construction of additional tanks at Kanchingtse (across the bay from Dairen) is another. Although work on these tanks has not commenced, I have been informed by the local manager for the Asiatic Petroleum Company that a ceremony consecrating the site of these tanks was held last week. It it quite probable, also, [Page 744] that the foreign oil companies may soon be the recipients of instructions requiring that they keep their stocks up to a certain level.
The institution of some form of control over the oil business in Manchuria is the other phase of the plan. Just what form this control will take has probably not even been decided by the Army. General Koiso suggested the possibility of price fixation and quotas in talking to an American newspaper correspondent recently. Fears of a distributing monopoly which would drive the foreign oil from Manchuria, I believe, are for the present unjustified. Not because the Army does not desire such a change but because it fears that the change would be accompanied by considerable expense and disorganization of the market. It therefore prefers to postpone this change until such time as it is not confronted with other problems of greater urgency.
Respectfully yours,