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

No. 1148

Sir: I have the honor to refer to the Embassy’s despatch No. 1082 of March 3, 1937,69 and previous correspondence in regard to the vegetable oil monopoly, and to enclose for the information and records of the Department copies of the Embassy’s note of March 10, 1937, to the Foreign Office69 on the subject.

The Embassy stated in the note above-mentioned that it was becoming increasingly clear that the real objective of the China Vegetable Oil Corporation was to achieve monopolistic control of an industry which heretofore had flourished and had served as a happy trade medium between the United States and China. The Embassy remarked that it was difficult to believe that the Chinese Government would promote or even formally sanction any Government or semi-Government organ the functioning of which would impair the freedom of action in an industry from which for so many years such great mutual benefit to the two countries had been derived. The Embassy referred to its previous note of September 4, 1936,71 and [Page 659] expressed the hope that it might have, as requested in that note, a clear and concise assurance, based not only upon such treaty rights as might be applicable but upon amity and traditional good will, that the China Vegetable Oil Corporation had not been and would not be vested with any prerogatives which would constitute a monopoly or which would lead to the application of restrictions upon the legitimate trade of American citizens in China now or hereafter engaged in the purchase, sale, storage, refining, financing, testing, or transportation of oil products. The Embassy stated that an assurance to this end would do much to remove the deplorable uncertainty that now existed.

In its consideration of this matter, the Department is respectfully referred to the Ambassador’s despatch to the Department No. 372, dated at Nanking March 9, 1937,72 entitled “Plans of Chinese Government for Economic Reconstruction and the Promotion of Commerce and Industry”, which deals in part with the general question of Chinese government monopolies.

Respectfully yours,

For the Ambassador:
Frank P. Lockhart

Counselor of Embassy
  1. Not printed.
  2. Not printed.
  3. See despatch No. 692, September 4, 1936, Foreign Relations, 1936, vol. iv, p. 613.
  4. Ante, p. 573.