893.5034 Manchuria/14: Telegram
The Ambassador in Japan (Grew) to the Secretary of State
[Received November 4—4:56 a.m.]
518. 1. The press reports a huge deal by which the Nippon Sangyo Kabushiki Kaisha, chief of the extensive Ayukawa or Nissan interests, will acquire from the South Manchuria Railway Company all its commercial and industrial interests other than railways. A corporation half owned by the “Manchukuo” government and half owned by Nippon Sangyo will be set up with head office in Hsinking capitalized at 450,000,000 yen.
2. Coville51 has received from a personal friend in the company the following information: the transaction with the South Manchuria Railway Company has been closed; the expectation is that the new company will acquire also other interests and will become the primary agency in the economic development of Manchuria under a monopoly system exceeding in concentration anything thus far attempted even in Manchuria. Operations will commence without delay; assisted by proceeds of the sale the South Manchuria Railway Company will hereafter be free to concentrate on rapid development of North China, which is recognized as an essential part of the program necessary for the solution of the problems both political and economic facing Japan in North China; Matsuoka52 will become Foreign Minister and as such support his well known policy of exploitation of North China.
3. Nippon Sangyo is the parent company of the interests controlled by Gisuke Ayukawa, able financier who has risen rapidly in recent years in heavy industry, notably iron and steel, coal, copper, gold, automobiles, chemicals, and munitions. He has access to bank credit independent of Mitsui, Mitsubishi, et cetera.
4. The newspapers state that Ayukawa himself will visit the United States, possibly in December, to attract American capital and technique to Manchuria.