394.1153 Smith Company, Werner G./66: Telegram
The Consul General at Shanghai (Gauss) to the Secretary of State
[Received October 23—11:40 a.m.]
1356. My 1275 [1299], October 5, 7 p.m.24—wood oil of Werner G. Smith.
1. Japanese Consul General has replied to my previous communications on the subject in a letter the gist of which follows:
Reservation of rights of the American company for compensation for losses suffered in the original shipment at the present time is “regrettable”, as there is no evidence of Japanese responsibility for those losses. Furthermore, as no concrete evidence of the American company’s ownership of the wood oil, such as a bill of lading or consular invoice, has been presented, and as the wood oil was contained in baskets and transported in junks, an unlikely method of shipping for an American firm, the Japanese naval authorities at first were reluctant to permit the cargo as American owned. However, later, for the sake of amity between Japan and the United States, they “set [Page 506] aside” this question and made the offer of settlement by paying for the remaining amount of wood oil. It will be noted, therefore, that the Japanese naval authorities have never recognized the American ownership of the cargo.
In these circumstances, if the American firm believing their ownership of the wood oil has been recognized, claims compensation for losses suffered in the original shipment (at first stated as 250 tons and later as 280 tons), it will be necessary to go over the whole question from the beginning and to require clear proof of the Werner G. Smith Company’s title to the cargo.
It is requested that the company be advised to withdraw its claim for compensation for losses suffered in the original shipment. The Japanese authorities “are prepared to consider the settlement of the case” if the American company gives assurances that a claim for the amount of the original amount will never be presented.
2. I am replying along the following lines:
The difference between Mr. Hidaka’s statement to Mr. Lockhart (see Consulate General’s 1016, July 20, 4 p.m.) and the present position of Japanese naval authorities regarding an ownership of cargo is hard to reconcile.
The question of responsibility for losses suffered in the original shipment is for eventual determination on its merits; unjustified claims will presumably not be pressed and reasonable ones should be paid.
However, I am prepared to inform the American company of the offer to purchase the remaining wood oil provided waiver is made of the claim for that portion of original shipment which has already been lost. Before presenting this offer to the company, I should like definite assurances from the Japanese authorities that prompt payment will be made at the price asked, i. e., 11 cents United States currency per pound, and that prompt steps will be taken to have the remaining cargo weighed by a public surveyor.
The apparent difference between the figures for the original shipment (250 tons at first and 280 tons later) could only be explained by telegram from Hankow, as, owing to the smaller figure being stated in long tons and the larger in short tons, no actual difference in weight exists.
3. I suggest that Hankow now enquire of Werner G. Smith Company whether they will accept the Japanese offer, so that if they accept I may be in a position to settle the case upon receipt of assurances from Japanese authorities that prompt payment will be made.
4. Sent to Hankow, repeated to Peiping and Nanking. By mail to Tokyo.
- Not printed.↩