793.94/14857

The Chargé in China ( Peck ) to the Secretary of State

No. 1930

Sir: I have the honor to report, as of possible interest to the Department, that the Kokusai Unyu (International Express Company) is rapidly and steadily increasing its activities throughout North China.

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According to the Manchuria Daily News of February 15, 1939, this company had only 30 employees in North China prior to the Manchurian Incident, only 90 between that date and the beginning of the China Incident, whereas at the present time the company employs 1,300 persons throughout the occupied areas of North China. The news article, in reporting the establishment of branch offices in Shih-chiachwang, Tsinan, Taiyuan, Tsingtao and Hsuchow, states that the company proposes to establish new agencies at certain stations along the Peking-Hankow and Tientsin-Pukow Railways south of the Lung-hai line as well as along other railways in Shansi and Suiyuan.

In the broad aspect of Japanese economic penetration the activities of Japanese forwarding agencies are a small matter. But the enlarged activities of such agencies are generally symptomatic of the hold which Japanese enterprise is endeavoring to have upon commercial matters throughout the occupied areas. In this connection, it may be briefly stated that the transportation of goods, unless handled by Japanese concerns, is now subject to long and vexatious delays, and that such delays result in extra expense and often a loss of market.

The same condition would appear to obtain in other occupied areas of China; especially it is understood that, although commercial shipments are not permitted up the Yangtze, merchandise delivered to Japanese agencies has some chance of being delivered to the various Yangtze ports, even in the guise of military supplies.

Respectfully yours,

For the Chargé d’Affaires ad interim:
Frank P. Lockhart

Counselor of Embassy