893.61331/176: Telegram
The Consul at Tsingtao (Sokobin) to the Secretary of State
[Received November 13—10:52 a.m.]
212. 1. The Japanese special military mission here has just informed Universal Leaf Tobacco Company that the company will be permitted to purchase 1,600,000 pounds of leaf tobacco at two possibly three points along the railway under following conditions:
- First, that company give complete cooperation to Chinese and Japanese authorities in North China;
- Second, that company in purchasing will adhere to price limits set for grades established by Chinese and Japanese tobacco guilds;
- Third, that so far as possible company will sell its tobacco in North China (presumably to Japanese factories);
- Fourth, that exports from Tsingtao must be covered by exchange control or permission obtained to link exports with approved imports;
- Fifth, that reports of purchases will be furnished and authorities permitted to inspect account;
- Sixth, that expenses of inspectors required to check purchases will be paid by company;
- Seventh, that Federal Reserve Bank currency will be used; there were no requirements for sales of foreign exchange;
- Eighth, that the company will sign an agreement incorporating above terms, the agreement to expire end of August 1940. Japanese text of agreement will be authoritative.
2. Company is requesting its Shanghai manager to come to Tsingtao immediately to negotiate the several unsatisfactory stipulations.
3. Company in unrestricted period could reasonably expect to purchase at least 10,000,000 pounds of this year’s crop.
4. As objectionable as stipulations are, with present concession, the company may be able to achieve nevertheless a satisfactory modus operandi.
Repeated to Peiping, Chungking, Shanghai. Abridged code text sent by cable to Tokyo with full true reading following by airmail to Tokyo.