894.6363/262: Telegram

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

78. Department’s 33, March 20, 6 p.m.

1.
The local representative[s] of the oil interests this afternoon communicated to Kurusu and Yoshino (Vice Minister for Commerce and Industry) the outline of the proposal of their head offices to cooperate with Japanese capital in some form. The proposal was apparently well received by the Japanese officials. Yoshino stated that for the next 3 months the foreign oil companies would receive the same quotas as hitherto and that he would continue to hold up the pending applications for additional refining capacity. Asked if penalties would be enforced after July 1, should it be found impossible for the new merger or arrangement (if it materializes) to complete the required oil storage by that time, Yoshino said, “Speaking unofficially I shall do my best”.
2.
Under these favorable circumstances my British colleague and I agree that it will not be necessary at the present moment officially to urge suspension of the regulations and that it will be better to reserve our ammunition for use later should it be found desirable to request suspension of the regulations after July 1st. Unless otherwise instructed, therefore, I shall not make the authorized representations.
3.
Third sentence of paragraph 1 of the Embassy’s 77, March 20, should have read as follows: “In view of the fact that the deadline for announcement by the oil interests of acquiescence with the law was supposed to be today, et cetera.”
Grew