Foreign Relations of the United States Diplomatic Papers, 1935, The Far East, Volume III

893.6363 Manchuria/173

Memorandum by Mr. Raymond C. Mackay of the Division of Far Eastern Affairs of a Conversation With Mr. Kersey F. Coe of the Standard-Vacuum Oil Company, New York

[Washington,] April 18, 1935.

Mr. Coe, by means of a telephone call from New York, requested that the Department be so kind as to forward to the American Embassy at Tokyo for transmission by it to Mr. Parker of the Standard-Vacuum Company a paraphrase of a message as follows:

“As impossible to shut out California crude have advised Defriest our opinion at least 25 cents per barrel premium over well price should be quoted by interested parties Pacific Coast for Manchuria. Also developing possibility handling Anglo-Ecuadoran stock. Have you any suggestions which may help situation. Dundas.”⁹⁶

In explanation of the foregoing, Mr. Coe stated that Mr. A. H Defriest, vice president of the General Petroleum Corporation (sub sidiary of the Standard-Vacuum Oil Company), was unsuccessful in his endeavors to cause other California companies to refuse to make shipments of crude oil to Manchuria; that there exists, however, a distinct possibility that the California companies will agree among themselves to quote for the Manchurian trade only at a premium; and that in the opinion of the Standard-Vacuum Oil Company the premium, over the well price, should be not less than 25 cents per barrel.

Mr. Coe also stated that the Anglo-Ecuadoran Company had made at least one shipment of crude oil to Manchuria; that the Standard Oil Company of New Jersey would endeavor, through its connections in South America, to “bring the company into line”; and that the New York representative of the Asiatic Petroleum Company would recommend by cable to its London office that pressure be brought to bear upon the Anglo-Ecuadoran Company not only by the Asiatic Petroleum Company but also by the British Foreign Office.

Mr. Mackay stated his opinion that even if all oil supplies from the two Americas were shut off from Manchuria such action would not seriously cripple the Monopoly as in that event it could, and probably would, turn to native oil dealers in Japan. Mr. Coe agreed but added that the principally interested foreign oil companies desired to make clear to all that the Monopoly will encounter many obstacles and that it will have to “pay through the nose” for its supplies.

96. This message, in paraphrase, was sent to the Ambassador in Japan for Mr. Parker as telegram No. 65, April 18, 6 p.m.