393.115 Tung or Wood Oil/228: Telegram
The Consul General at Hankow (Spiker) to the Secretary of State
[Received 10:50 p.m.]
225. Reference is made to the first paragraph of the Department’s 320, August 24, 8 [6] p.m. to Shanghai. During the course of a preliminary survey of general American cargo held up at Hankow this Consulate General asked the Arnhold Trading Company (British) of Hankow how much cargo it had destined for the United States. A letter from that company dated January 25, 1939 informed this office that it had then only 60 tons of China grass contracted for sale, although it stated further that it held stocks of wood oil amounting to 1,200 tons “which will almost certainly eventually be sold for shipment to the United States”. As the Arnhold Trading Company has not yet approached this office, though aware of the negotiations in progress, the present claim is a new and interesting development which should be closely scrutinized.
A leading American shipper here has been advised by Japanese with official connections that any effort to include other than bona fide general American cargo will wreck negotiations. Recently one American firm here suggested the inclusion of its stocks now held at up river points, for which substitution would be made here from undelivered stocks held by the company at Hankow for eventual delivery to non-American firms. The Consulate General suggested that such an effort might tend to imperil all negotiations. This Consulate General’s representations of July 19 (Hankow’s 174, July 26, 9 p.m.) were made on behalf of the Werner G. Smith Company, Spencer Kellogg and Sons, and O. E. Vongehr, of the American [-owned] character of whose wood oil there was no question.
Repeated to Shanghai, Chungking and Peiping. Shanghai please repeat to Tokyo.