893.6363 Manchuria/217
The Consul General at Mukden (Ballantine) to the Minister in China (Johnson)9
Sir: I have the honor to refer to my despatch No. 92 of May 4, 1935, transmitting the applications10 of the foreign oil firms for the withdrawal of their stocks, and to enclose a translation of a reply11 dated May 11 from the Ministry of Finance. The Ministry states that “refund of import duty on reexports is not permissible under the existing customs tariff law”; that the Ministry however desires to “afford facilities” to the foreign companies; and that the Ministry would be glad to discuss “the circumstances which render it necessary for the companies to re-export” their stocks.
In response to this invitation, the companies plan to send representatives to Hsinking on May 21; the representatives are instructed to limit their discussion to a statement that the institution of the monopoly forces them to withdraw stocks.
The Mukden branches of the companies have recently been instructed to estimate market requirements as compared with the monopoly’s supplies, as a basis for determining the companies’ policy concerning the sale of stocks in Manchuria, and future sales ex Dairen to the army. They have reported to their head offices that the monopoly’s gasoline stocks are not ample, and that for the time being importations will be required, but that the companies’ gasoline distributing equipment is not essential to the monopoly; that no kerosene shortage is to be expected in view of the large stocks already in the hands of dealers and the restricted summer market. They also reported that the monopoly will not need to acquire their interior installations immediately for distribution purposes, but may eventually desire additional storage facilities.
Respectfully yours,