894.6363/376½
Memorandum by Mr. Cabot Coville of the Division of Far Eastern Affairs
Limitation of Petroleum Exports to Japan
Over a period of years the volume of exports from the United States to Japan of the various categories of petroleum products has generally increased. This increase has been substantial but more or less even, with the exception that the latter half of 1940 shows a very sharp increase concentrated particularly in gasoline (in containers). Increase in various categories of lubricants was considerable but not as sharp as in gasoline.
This increase of Japanese takings of petroleum products especially concentrated in gasoline in containers is unquestionably related to the war and war preparations. It is possible that part of the increase of exports is finding its way to Germany, and it seems certain that the increase is serving to augment Japan’s preparedness for war, if war should occur between Japan and Great Britain or the United States or both. The question of limiting these exports is obviously of great importance and of great immediate importance.
The possibility of arriving at some formula for limiting petroleum products exports to Japan has been carefully studied in the light of effect upon Japan. It is believed that any system of limitation which may be arrived at should be a system applying to countries generally (not to Japan alone), although in accordance with present American policy it is to be expected that the Western Hemisphere, Great Britain, Greece, The Netherlands, and such countries as might from time to time be particularly singled out for similar reasons would be excepted from the restrictions. This study, although based upon the premise that a system of limitation of petroleum products exports would apply to countries generally (with the exceptions mentioned) has nevertheless been directed only toward effect upon relations with Japan. Its applicability or inapplicability to relations with other countries would require separate study.
It is recommended that exports for each quarter year period be limited to one quarter of the 1936 quantities of United States exports of petroleum products, category by category in the various categories listed in the official export returns of the United States Government for 1936, the quota for each category to be increased, and to be increased hereafter, by one percent for each quarter year period to allow for presumed increase of ordinary commercial needs. It is recommended that, because quotas for aviation gasoline could not be availed of under present regulations, there be established a lump quota for gasoline of all types based upon the sum of the exports in 1936 of natural gasoline, [Page 794] aviation gasoline and other gasoline; and that, because of changes in classification of lubricating oil exports, the lubricating oil quota be a lump quota based upon the sum of the exports in 1936 of all types of lubricating oils.
[Here follows a review of the statistics of exports of petroleum products to Japan in 1936–40.]