393.115 Tung or Wood 011/209: Telegram
The Acting Secretary of State to the Chargé in Japan (Dooman)
258. Your 408, August 15, 2 p.m., and previous in regard to wood oil at Hankow. The Department is informed that the oil now held at Hankow by Spencer Kellogg and Sons and by the Werner G. Smith Company was bought and paid for in 1937 prior to the outbreak of hostilities and that Vongehr’s oil was purchased for shipment during August-September 1937 (see in this connection Hankow’s 174, July 26, 9 p.m.). The Department is also informed that oil belonging to the Bunge North American Grain Corporation referred to in Shanghai’s 710, August 10, 6 p.m.,3 was purchased between July 9 and August 11, 1937, and that most if not all of the remaining oil under contract for delivery to American firms was purchased long ago. It is also the Department’s understanding that no part of the Hankow oil owned by or under contract for delivery to American firms has any connection whatsoever with the 25,000,000 dollar credit referred to in your program under reference.
The Department leaves to your discretion the manner of approach to the Japanese Government but perceives no reason why the entire situation should not be freely discussed with and the above statements made known to the Japanese Foreign Office. As indicated in the Department’s 291, August 9, 9 p.m., to Shanghai, a large number of members of Congress as well as American exporters of wood oil in China and the American paint and varnish industry as a whole are becoming thoroughly aroused over continuing and unwarranted interference on the part of the Japanese authorities with the shipment from Hankow to Shanghai of wood oil owned by or under contract for delivery to American firms—a situation which is further complicated by the fact that inability to effect shipment is creating for the concerned American interests heavy and ever-mounting costs on the score of such items as war risk insurance, storage fees including lighter rentals and general carrying charges. Furthermore, in view of the fact that much of the oil was purchased over 2 years ago, there exists the rapidly mounting risk of deterioration of the oil to a point where it cannot be used by the American consuming trade. The situation under discussion is one in regard to which the affected American interests and the American Government have been very patient and it is desired that in your approaches to the Japanese Government you make clear the Department’s concern in the matter and its expectation [Page 450] that the Japanese authorities will without further delay take such action as may be required to the end that arrangements may be made for the shipment from Hankow to Shanghai of the wood oil under discussion.
Sent to Tokyo via Shanghai. Repeated to Chungking, Peiping and Hankow.
- Not printed.↩