600.939/373
The Consul General at Shanghai (Lockhart) to the Secretary of State
[Received January 10, 1940.]
Sir: I have the honor to refer to my despatch No. 2736 of December 9, 193925 in regard to the monopolistic actions of Japanese interests regarding the China egg trade, and to enclose as of possible interest in this general connection a copy of a confidential police report dated November 22, 193925 on the subject of “Japanese Monopoly in Business Trade around Shanghai”.
It will be noted that, according to the information contained in that report, the Japanese have acquired a virtual monopoly in trade as regards fish, livestock, eggs and cocoons; and that trade in matches, rice, wheat and vegetables is subjected to a semi-official Japanese control. Those monopolistic activities are naturally of primary significance for the consumption market in China, raising as they do the prices of commodities to levels which for the Chinese consumers are decidedly uneconomic, but they are not without their significance for international trade as well. The Japanese interference with American participation in the China egg trade has already been brought to the attention of the Department. It is of further interest to note (especially in view of the stubborn contention in some circles that Japan has thus far failed to derive any economic benefit from its military [Page 474] conquest of part of China), for example, that, “In addition to the quantity of rice already transported to Japanese ports or brought here (Shanghai) for eventual transportation to Japan,” the Japanese authorities propose to authorize the shipment to Japan of an additional 400,000 bags of rice from Wusih, and the same amount from Sungkiang (Kiangsu); and that the Japanese are exercising an influence in the match market through their control, effected since the outbreak of war in Europe cut off former sources of supply, of raw materials used by Chinese match manufacturers.
In the view of the writer of the above-mentioned report, the introduction of the various monopolies into the several economic fields of occupied China is all part of a scheme “to bring all trades under the rigid control of an organization known as the Central China Liaison Office of the Asia Development Board, …26 which is the supreme official organ for the ‘development’ of China.”
Respectfully yours,