394.115 Panay/443: Telegram

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

265. Our 264, April 22, 5 p.m.83

The following is our translation of the Foreign Office note with which the Panay indemnification was transmitted:

“Number 52, American, April 22, 1938. Excellency: Having been informed by your Government [note] number 899 of March 2184 of the amount required as indemnification for losses to American property and for death and injury of American citizens as a result of the attack on December 12 last by Japanese naval airplanes on the American warship Panay and on American merchant vessels, a request was [Page 212] made by Director Yoshizawa of Counselor Dooman of Your Excellency’s Embassy for a detailed statement, which was made available by a reply dated the 9th instant.85

The Imperial Government has now completed the required procedure with regard to this matter, and there is transmitted herewith by check the total amount for indemnification, $2,214,007.36 United States currency, which I request Your Excellency to be so good as to forward to your Government. I avail, et cetera. Koki Hirota, Minister for Foreign Affairs. His Excellency Joseph Clark Grew.”

When handing the note to us, the Foreign Office raised orally and informally several points, of which the following are urgent:
In my note number 838 of December 1486 and in several other immediately subsequent communications to the Foreign Office, I stated that only three Standard Oil vessels had been sunk, whereas in the detailed statement sent by Dooman to Yoshizawa several additional vessels are mentioned as having been sunk. No question of the facts has arisen, as the Japanese Navy has ascertained that all the vessels listed in Dooman’s letter were sunk. Nevertheless, for purposes of accounting and for other reasons which are confidential the Foreign Office would appreciate receiving from us a memorandum, dated as of today, setting forth the fact that omission from my notes of mention of the additional vessels under reference was due to impracticability of ascertaining exactly the total damage done until some time later.
In paying the entire amount claimed for indemnification for personal injuries, the Japanese Government assumes that such amount does not include indemnification for cases of “nervous shock”. If the assumption should be incorrect, the Japanese Government hopes that no publicity will be given to the fact that persons who were “shocked” but otherwise unharmed are receiving indemnification. (For our personal information the Foreign Office explained that a British claim for several such cases was causing trouble, for the reason that cases of nervous shock are not sympathetically viewed “in certain Japanese quarters”).
The Japanese Government assumes that having paid indemnification it may with propriety now salvage the vessels for conversion into scrap metal.
Instructions by telegraph with regard to points (a) and (b) above are requested.
Additional points raised were:
If the American Government should at some later time decide to replace the Panay, the Japanese Government would appreciate receiving contract for construction in Japan.
What was the basis of calculation by Standard Oil Company for computing loss due to deprivation of use of vessels until replaced?
A detailed statement was requested setting forth every item in the Standard Oil claim, indemnification to each individual for physical injury and indemnification for each individual killed.

Repeated to Shanghai for Hankow and Commander-in-Chief.87

  1. Ibid., p. 563; it reported receipt of the Japanese check in settlement of the United States claim.
  2. For text, see telegram No. 99, March 19, 4 p.m., to the Ambassador in Japan, ibid., p. 559.
  3. For text, see telegram No. 123, April 7, 6 p.m., to the Ambassador in Japan, Foreign Relations, Japan, 1931–1941, Vol. i, p. 561.
  4. For text, see Department’s telegram No. 342, December 13, 1937, 8 p.m., ibid., p. 523.
  5. Adm. Harry E. Yarnell, of the U. S. Asiatic Fleet.