893.61331/43: Telegram

The Acting Secretary of State to the Ambassador in China (Johnson)

124. Your 250, May 19, 5 p.m. Department has received from the Universal Leaf Tobacco Company and from members of Congress inquiries in regard to the situation outlined in your telegram under reference.

Please initiate a thorough investigation not only in regard to the proposed monopoly but also the reported intention of the Chinese Government to increase duties applicable to imported leaf tobacco.

Bearing in mind the position of the American Government in regard to the creation of Chinese private and Government monopolies (see in particular Department’s instruction No. 1745 of September 4, 1935)25 and the ever increasing difficulties and handicaps to which during recent years foreign tobacco interests operating in China have been subjected, the Embassy should take all appropriate and practicable steps with a view to safeguarding American interests. To that end the Department desires that the Embassy, unless after investigation it perceives objection, bring the subject to the attention of the appropriate Chinese authorities. Also, as the proposals under reference, if implemented, would in all probability affect adversely not only American but also British tobacco interests, the Department suggests that you may wish to discuss the matter with your British colleague.

Please keep Department promptly and fully informed.