856D.6363/786: Telegram

The Consul General at Batavia (Foote) to the Secretary of State

The representatives of the local oil companies and Mukai representing the Japanese oil importers initialed an agreement yesterday providing for exports of petroleum products from the Netherlands Indies to Japan totaling 1,800,000 tons per annum composed of the following: 120,000 aviation crude, 100,000 crude for lubricants, 540,000 other crude oil, 250,000 motor gasoline, 50,000 gas oil, 116,000 diesel oil, 73,000 fuel oil, 57,000 kerosene, 494,000 products under the normal import quota.

The above includes undelivered quantities covered by previous contracts. Payments to be made in United States currency before making shipments.

The Chairman of the Netherlands delegation told me today that no agenda had been suggested; he intended to inform the Japanese delegation that he expected an agenda within 10 days failing which he would discontinue the negotiations; he expected the negotiations to be concluded by December 31; the Netherlands Government in London has been requested to instruct the Netherlands Minister at [Page 208] Tokyo to convey this to the Japanese Foreign Office. I was informed, furthermore, that the Japanese delegates are apparently without instructions and are apparently considerably embarrassed thereby.

Local authorities have shown little or no concern over the unusual concentration of Japanese troops on Hainan and Formosa because of the general opinion locally that if Japan strikes at all the first blow will be at the Philippine Islands.

Repeated to Tokyo.

Foote