FOREIGN RELATIONS, 1934, VOLUME III



  Comment and queries:
  (a) There seems to be some confusion as to whether in various ref-
erences to "the oil situation" there is meant the situation in
Japan or
in Manchuria or both. Although those two situations are separate,
they are closely related and they are both situations with regard to
which control and ultimate responsibility lie, in our opinion, with the
Japanese authorities; and in connection with both, the problem con-
fronting foreign interests and governments is that of preserving
actual investments and markets.
  (b) Could you conveniently ascertain from Clive what is the nature
of the latest representations which he is under instruction to make or
has made with regard to the Manchuria situation?
  (c) In the light of all that you now know, would you advise that
we instruct you to make to the Japanese another de'marche similar
to that which Clive is under instruction to make in regard to the
Manchuria situation?
                                                            HuLL

894.6363/135: Telegram
     The Ambassador in Japan (Grew) to the Secretary of State

                               ToKYo, November 24, 1934-10 a. m.
                               [Received November 24-9: 50 a. m.]
  257. My 244, November 6, 7 p. m.
  1. An official of the Department of Commerce and Industry on
November 20 again requested Goold to file the Standard-Vacuum Oil
Company's complete import plan for 1935 immediately and added
that failure to do so would result in penalization of the company.
The British oil company was similarly notified.
  2. At an official conference held later on November 20 between the
Vice Minister for Commerce and Industry and Kurusu on the one
side, and the representatives of the American and British oil com-
panies on the other, Kurusu stated that the Japanese Government
was not to be influenced by representations of the character already
made by the American, British and Netherlands Governments into
altering its petroleum law or abolishing the stock holding require-
ments. The discussions brought out the following facts:
  (a) It might be possible for the foreign oil companies to obtain an
official guarantee of their present volume of trade in all products for
a period of, say, 10 years, subject to various conditions.
  (b) The Japanese Government will give preference to domestic
refineries in trade quotas and will not discriminate against foreign-
controlled refineries in Japan, provided that the output of such re-
fineries is kept within the amount of the trade quotas.



764