893.6363 Manchuria/299: Telegram

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

135. Department’s 64, April 22, 2 p.m.

Representatives of the oil interests conferred with Manchukuo Monopoly Bureau officials and with the Chief of the General Affairs Bureau of Manchukuo on May 21 and were informed that the monopoly would offer to purchase their properties, an offer which could be accepted by the oil interests under protest as being only a partial settlement but that settlement of intangible items of their claims would have to await a favorable opportunity for negotiation through diplomatic channels. The Chief of the General Affairs Bureau then referred to the possibility of improved relations between Manchukuo and the United States and Great Britain.
This definite indication that Manchukuo will not consider settlement of the intangible items of the claims of the oil interests without political considerations has complicated the problem and therefore the local representatives of the oil interests have referred the matter to their head offices which will probably consult with the Department and the British Foreign Office. In the meantime the Embassy and the Consul at Mukden will take no action. The Embassy is of the opinion that the injection of political issues by Manchukuo must be ignored and that all parties concerned should proceed as contemplated in the Department’s 64, April 22, 2 p.m.