Office of the Historian

894.6363/105: Telegram

The Ambassador in Japan (Grew) to the Secretary of State

Tokyo, November 1, 1934—6 p.m.
[Received November 1—8:15 a.m.]

241. Department’s 162, September 21, 8 p.m.

1.
Under date of October 31, 1934, the Foreign Office transmitted to this Embassy an informal memorandum in reply to our oral representations. The substance of the memorandum is as follows:
2.
The preamble disclaims any intention of disturbing the security of those engaged in the oil industry in Japan,
3.
Numbered paragraph 1 states that the reason for the yearly license is the regulation of the importation, production and sale of oil in order to achieve harmony in the industry. As long as the demand for petroleum products in Japan continues to increase, the quotas of the oil companies will not be restricted below the limits of their business before the enforcement of the petroleum industry law.
4.
Numbered paragraph 2 states that in allotting increased quotas the intention is to have as much refining done in the country as possible and to give the importers only such part of increase as cannot be handled by the domestic refiners.
5.
Numbered paragraph 3 states that the petroleum committee will grant permits for refining after taking into consideration the condition of supply and demand, the circumstances of the existing refiners, [Page 754] et cetera. Importers of gasoline who wish to engage in refining in Japan may import crude oil in place of refined products. Permission will generally speaking be easily granted, especially if the company concerned has not less than half Japanese capital.
6.
Numbered paragraph 4 states that the Government has no intention of taking over at other than market prices oil owned by the companies. It also has no intention of interfering arbitrarily with the market prices of petroleum products but reserves the right to control prices if the public interest demands.
7.
There is no mention in the memorandum of the 6 months’ stockholding requirements.
8.
Similar memoranda have been received by the British Embassy and the Dutch Legation.

Text by mail.51

Grew
  1. Not printed.↩