Office of the Historian

894.6363/217: Telegram

The Chargé in Japan (Neville) to the Secretary of State

Tokyo, November 15, 1935—5 p.m.
[Received November 15—11 a.m.]

211. Department’s 176, November 14, 6 p.m.

1.
The conference took place as scheduled for the purpose of discussing the telegram sent by the head offices of the foreign oil interests to their local representatives under date of October 29, stating that the foreign oil interests were relying on the Japanese officials to carry out the program embodied in the five-point memorandum of April 13, 1935.27 This message was conveyed to the Japanese officials on November 2.
2.
Yoshino and Kurusu informed the local representatives that:
(a)
The five-point memorandum represented what the officials hoped to be able to accomplish in order to meet the views of the foreign oil interests but did not constitute a promise.
(b)
It having been found impossible to alter the stock holding requirements of the law a compensation plan has been developed and the enforcement of the storage provisions postponed.
(c)
The 6 months’ stock holding obligation however must be considered as fixed and beyond further negotiation.
(d)
The issue is now definite and the oil companies must decide whether or not to continue trading in Japan under the present law and regulations.
3.
Yoshino and Kurusu unofficially added that unusual consideration was being given the foreign oil companies in that they were being permitted to participate in a Japanese compensation plan and advised the foreign oil companies not to refuse the opportunity being offered of maintaining their established positions in the Japanese trade.
4.
The above information was cabled to the oil companies by the local representatives on November 7.
5.
The situation now appears to be that the Japanese Government prefers to have the foreign oil companies continue in business in Japan but is prepared to do without them if they do not wish to operate under existing conditions. It is not believed that this attitude can be considered entirely as a “bluff” on the part of the authorities.
6.
Today the representatives of the foreign oil companies were called to the office of the Chief of the Mining Bureau of the Department of Commerce and Industry who requested that the decision of the foreign oil companies in regard to the storage requirements be conveyed to the Japanese authorities as soon as possible in order that the storage-compensation budget may be compiled. He stated emphatically that there would be no discrimination between foreign and Japanese companies in the allocation of storage compensation.
Neville
  1. Ante, p. 896.↩