394.1153 Smith Company, Werner G./22: Telegram

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

454. Department’s 236, July 9, 5 p.m., wood oil case.

1.
We left at the Foreign Office today an aide-mémoire closely following the telegram under reference.
2.
Yoshizawa’s extempore comment was that, notwithstanding reference by the Japanese Consul General in his note to Lockhart to the question of the ownership (see Shanghai’s 926, June 29, 4 p.m.), it seemed to him that the offer of the Japanese naval authorities to transfer the oil to the custody of the American authorities at Nanking makes that question no longer a live issue.
3.
With reference to the statement that Japanese vessels pass freely between Shanghai and Nanking and have accepted freight, his comment was that such freight was probably sutlery and other goods for sale to Japanese troops and to Japanese residents and not ordinary commercial cargo. We feel that it would be wise tactically to drive home, before the Foreign Office replies, the fact that Japanese vessels are carrying commercial freight on the Yangtze, and we hope that Shanghai and Nanking will send us precise data. We would, of course, be careful in using this material not to prejudice the basic principles involved in this issue.

Repeated to Shanghai for Hankow and Nanking.

Grew