Office of the Historian

893.6363 Manchuria/177: Telegram

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

Tokyo, April 23, 1935—5 p.m.
[Received April 23—7:47 a.m.]

91. Embassy’s 81, April 11, 6 p.m. paragraph 5—oil monopoly in Manchuria.

1. The Embassy is informed that legal counsel of Standard-Vacuum will consult with the Department in the near future concerning the Company’s claim for damages for the loss of its business in Manchuria. The principal questions at issue appear to be:

(a)
Will the American Government present this claim on behalf of the company although local legal resources have not been utilized?
(b)
If so, to what government or authorities will the claim be presented?
(c)
If the company offers to sell its properties and equipment (except stocks of oil) to the monopoly, could this action be construed as voluntary retirement from the field and thereby prejudicial to its claim?

2. The Embassy’s opinion in regard to (a) is that local legal recourse is impracticable as the Japanese courts would almost certainly dismiss the claim on the ground that Japanese courts have no jurisdiction over causes arising from acts of the Manchukuo regime, and as far as the Embassy is aware no adequate legal machinery for a claim of this importance exists as yet in Manchukuo.

In regard to (b) it would seem advisable to present the claim to the Japanese Government, as it is not believed that any satisfaction [Page 906] could be obtained from the Manchukuo regime if the claim should be presented directly to that regime, while a better chance of success might exist if Japan, even though refusing responsibility, should consent to act as mediator. The question of leverage, if any, would here arise.

In regard to (c) it would seem that the sale would not seriously injure the claim if the sale were made “without prejudice to any future claims.”

3. The British oil interests have requested their Embassy’s advice in regard to their claim and the British Embassy will probably consult its Foreign Office in the near future.

4. Parker is leaving Japan for the United States on April 26 (April 25 in America) and would greatly appreciate the Department’s opinion in regard to question (c) before his departure.

Grew