394.1153 Smith Company, Werner G./20: Telegram
The Consul General at Shanghai (Lockhart) to the Secretary of State
[Received July 7—7 a.m.]
956. Following from Tokyo.
“July 6, 6 p.m. Your 926, June 29, 4 p.m., and previous on the wood oil case. We have recently had several discussions on this case with the Foreign Office, which stresses that the chief difficulty in the way of settlement lies in the insistence of the Japanese naval authorities that their rule must be kept intact, that the Yangtze is not yet open to commercial traffic. We pointed out that it is a poor rule that can not be broken. However, it is our belief that the real difficulty is Japanese suspicion that there is substantial Chinese proprietor]y interest in the wood oil shipment. We suggest that the Department may wish, in the light of such recommendation as you may wish to make, to authorize you to give the Japanese Consul General at Shanghai a simple and clear undertaking that the shipment is American property.
Please repeat to the Department and Hankow as our 443, July 6, 6 p.m. Grew.”