693.002/536: Telegram
The Consul General at Shanghai (Gauss) to the Secretary of State
[Received March 2—7 a.m.]
340. On January 28th the National City Bank reported the customs authorities here had refused to issue a permit to reship a cargo of [Page 665] automobile tires from Shanghai to Hong Kong and that it was their understanding such refusal was based upon instructions issued by the Japanese military authorities to the customs to prevent shipment from Shanghai of any so-called war materials which might reach the Chinese market. Another American firm a few days later reported a similar case involving a shipment of tires to Hoihow.
These cases were immediately taken up with the Commissioner of Customs who on February 1st replied in part as follows: “The Japanese authorities who are now in military control of this area have informed me that they cannot allow reshipment of tires to Hong Kong or to South China ports”.
On February 2 I addressed a letter to the Japanese Consul General regarding the matter and requested an explanation of this reported interference by the Japanese authorities with legitimate American trade. On February 18th a further request was made for an immediate reply. I am now in receipt of the Japanese Consul General’s reply dated February 28th the pertinent portions of which read as follows:
“I have the honor to inform you in reply that upon the complete encirclement of Shanghai by the Japanese forces the Japanese military authorities instructed the Shanghai Maritime Customs to prohibit the reshipment from Shanghai of military supplies which are liable to fall into the hands of the Chinese troops or being utilized by the Chinese for military purposes. Since the reshipment of the goods belonging to the said American firms has been prohibited by the Shanghai Maritime Customs in accordance with the instructions of the Japanese military authorities, I regret to inform you that I am not in a position to enable the said goods to be reshipped from Shanghai to South China or Hong Kong. I have to add however that the Japanese authorities have no intention whatever to impede legitimate and bona fide business transactions by nationals of third powers and therefore are now trying to devise such means as to preclude as far as possible any unnecessary pressure on legitimate business transactions resulting from the application of the said prohibition.”
A few cases involving goods other than tires have been reported but upon representations being made to the Commissioner of Customs permits to reship have generally been granted which would seem to indicate that while the prohibition in respect of tires is absolute there is considerable elasticity in regard to other goods. In this connection I learn from the acting British Commercial Counselor that British firms have experienced somewhat similar difficulties but that no shipments of tires have been involved, that all cases of other types of goods have been successfully arranged with the customs and that in consequence it has not been necessary thus far to make any representations to the Japanese authorities.
Repeated by mail to Tokyo.