894.6363/228: Telegram
The Chargé in Japan (Neville) to the Secretary of State
Tokyo, December 13, 1935—6
p.m.
[Received December 13—9:25 a.m.]
[Received December 13—9:25 a.m.]
240. Department’s 194, December 11, 6 p.m.; and 196, December 12, 6 p.m.
- 1.
- The oil companies will send a letter tomorrow morning to the Vice Minister for Commerce and Industry with a copy for Kurusu stating definitely that “they cannot undertake any extra capital expenditure beyond that envisaged in the five-point memorandum”30 and proceeding to offer to trade on some terms the hydrogenation process for a confirmation of the program of the five-point memorandum.
- 2.
- After having done this the companies will endeavor to interest the Mitsuis and possibly other Japanese interests in the proposition.
- 3.
- The local representatives of the companies hope that their reply to the Japanese Government can be supported by some sort of diplomatic representations. The British Ambassador states that he is prepared on the strength of instructions already received to discuss the situation informally with Hirota in the early part of next week. He proposes to state to Hirota that he had thought that the oil problem had been settled by the agreement reached last April; that he regrets that it appears that the problem at present is no nearer a solution than it was a year ago; that there is no political angle to the question but purely as a commercial proposition the oil companies cannot see their [Page 936] way clear to investing large sums in Japan to carry 6 months’ stocks; that the oil companies are offering a constructive proposal by means of which the Japanese Government can assure itself of a steady supply of oil without imposing heavy storage requirements on the companies; and that the details of this proposal have been laid before the appropriate authorities.
- 4.
- I suggest that this Embassy be authorized to take early opportunity to call on the Minister or Vice Minister for Foreign Affairs expressing disappointment that a settlement could not be reached on the basis of the five-point memorandum; stating that the American oil interests find it impossible under the conditions imposed by the law to undertake the additional expenditure entailed by storing 6 months’ stocks; and requesting the good offices of the Foreign Office in obtaining a reconsideration of the matter in the light of the companies’ position.
Neville