393.115/280: Telegram
The Consul General at Shanghai (Lockhart) to the Secretary of State
[Received May 25—1:01 p.m.]
719. 1. As an example of the length to which the Japanese are attempting to drive American commercial enterprises from this area I quote the experience of a large American firm whose up river organization purchases raw materials in what is still Chinese controlled territory. This territory has no road or railway connection with Shanghai, hence the Yangtze River is its only artery of communication.
2. American, British and other foreign commercial craft except Japanese are not permitted to pass through the boom at Kiangyin, situated less than half way between Shanghai and Nanking, and below [Page 330] water point of firm’s cargo. Chinese flag craft have already been stopped from bringing company’s materials to Shanghai and the Nis-shin Kisen Kaisha now operating the steamers on the Yangtze will only accept Japanese cargo with possible exception of Chinese cargo having Japanese interests but never American or British cargo.
3. Very reliable sources state that cargo policy of Japanese merchant steamers on Yangtze is dictated by Japanese Army.
4. I believe the situation regarding wood oil of Werner G. Smith (see Hankow Embassy’s 237, May 4, 2 p.m.24) now being held in Nanking is result of similar emasculating policy.
5. Department may wish to consider bringing situation to the attention of the Foreign Office at Tokyo through Ambassador Grew.
Repeated to Embassy [at] Hankow and Peiping.
- Not printed.↩