893.61331/298: Telegram

The Counselor of Embassy in China (Butrick) to the Secretary of State

258. Further to my strictly confidential 253, September 4, 1 p.m., Director informed me this morning he had received oral negative reply from Takase on 6th. Director feels this is final and is attempting to close plants Tientsin and Tsingtao on 10th. If Takase’s decision stands, this case will represent outstanding example of Japanese elimination of foreign business from North China.

Company on August 19th closed its Kalgan offices and under charge of violation of exchange control laws turned over to the Mengchiang Government its Kalgan bank balance of over half million yen and [Page 793] “loaned” its Kalgan property worth nearly a half million yen to His Imperial Japanese Majesty’s army indefinitely. Kalgan negotiations were conducted with Japanese gendarmerie.

Sent to the Department, repeated to Chungking, Shanghai.