895.63 Or 4/46

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

No. 755

Sir: The receipt is acknowledged of your despatch No. 1229 of April 5, 1935, with which there was enclosed a copy of a letter, dated March 25, 1935, from the General Manager in Chosen of the Oriental Consolidated Mining Company,96 setting forth the amount of the loss sustained by the Company because of the allegedly unwarrantable action of the Japanese Government in invalidating certain provisions of the Company’s contract with the former Government of Korea, and requesting that the Embassy forward to the Japanese [Page 1098] Government the claim above-mentioned and the application of the Company for permission to export the gold produced on the mining concessions granted to the Company by the former Emperor of Korea. You state that the Embassy’s activity in regard to the case was suspended last year, and you refer the case to the Department for consideration.

It is ordinarily the practice of this Government, before espousing a claim made by an American citizen against a foreign Government, to require that the claimant exhaust all means of redress, either in the courts of the state complained of or by other means which may be open to the claimant established by such state for the examination of claims against itself and for the granting of redress, and to satisfy itself that the claimant has been denied justice.

Assuming that the refusal of the Japanese Government to permit the Company to export its gold and thereby to profit by the prevalence in other countries of a higher price for gold than that fixed by the Japanese Government constitutes a valid basis for a private claim against that Government, the records of the Department do not indicate that the Company has sought legal recourse through local channels and has been denied justice. It appears, moreover, from the Embassy’s telegram No. 38 of February 10, 1933,98 that the attorney in Japan for the Company was of the opinion that if the Company’s case could be tried before a court a favorable decision could be obtained, and that he desired to apply to the Governor General of Chosen for a permit to export gold, presumably with a view to meeting with a denial of such permit and thus to creating a basis for the institution of legal proceedings. It appears from the Embassy’s despatch No. 380 of May 10, 1933,98 that the Company decided for reasons which are not entirely clear to sell the gold produced in its mines to the Bank of Japan at a price fixed in yen by the Japanese Government.

It is desired that you transmit to the Department at your early convenience a full report in regard to such facilities, judicial or otherwise, as may be available for the entertainment by the Japanese Government of private claims against itself, and whether such facilities, if existent, have been resorted to by the Company. If the Company has had recourse to Japanese courts, there should be furnished to the Department a statement of the case presented to such courts by the Company, a statement of the arguments which may have been presented with a view to the refutation of the Company’s contentions, [Page 1099] and a copy of any judgment or decision that may have been rendered.99

As it would appear that the Embassy has on previous occasions transmitted to the Japanese Government an application from the Company for permission to export gold, the Embassy is authorized in its discretion to transmit to the Japanese Government another application of this character by the Company. The Embassy should exercise care, however, to transmit such application in the same manner that it transmitted previous applications of the Company.

Very truly yours,

For the Secretary of State:
William Phillips
  1. Neither printed.
  2. Foreign Relations, 1934, vol. iii, p. 823.
  3. Foreign Relations, 1934, vol. iii, p. 823.
  4. In his despatch No. 1801, May 1, 1936, the Ambassador in Japan reported that the Company took the position that it “for all practical purposes, has exhausted legal remedies in the premises”, while Mr. Grew felt “that the Japanese Government will refuse to admit damages at this time” should the Department make representations on the subject (893.63 Or 4/56).