893.6363/196: Telegram
The Ambassador in Japan (Grew) to the Secretary of State
[Received September 21—1 a.m.]
612. Our 599, September 14, noon. In recent conversation with the British Commercial Secretary, the Director of Commercial Affairs in the Foreign Office71 said that the chief difficulty in avoiding the establishment of an oil monopoly in Mengchiang is that the Japanese authorities in that area are not under the control of General Terauchi and the Japanese forces in North China, but are responsible to the Kwantung army. The independent attitude of the latter is well known and the implication is obvious that the Government in Tokyo finds difficulty in controlling its actions.
The British Embassy believes that Matsushima is doing his best to stave off the monopoly and therefore thinks it unwise to press the Foreign Office too hard at present, although the Ambassador contemplates a further protest in due course unless favorable results develop. This explains the comparatively mild tone and substance of the British memorandum of September 7, a copy of which was transmitted to the Department with our despatch 3237, September 14.72 No repetition.