In view of the intricate nature of this problem and of the possible
long duration necessary for the negotiation between the two countries
geographically so widely separated, it would be very much appreciated
if the United States Government would agree to extend, until this
matter is settled, the time limit of ninety days set by the Department
of the Treasury for the payment of the additional taxes. And lastly,
it is the earnest hope of our Government that the United States Gov-
ernment will kindly refrain from repeating such an action as was
taken against the Soyo Maru of the Toyo Kisen Kaisha.

811.512394 Shipping/42
The Ambassador in Japan (Grew) to the Chief of the Division of Far
                   Eastern Affairs (Hornbeck)

                                          TOKYO, August 24, 1934.
                                          [Received September 14.]
  DEAR MR. HORNBECK: I am sending you herewith a copy of a letter
of August 15, 1934,36 from Mr. Kurusu, Chief of the Commercial Bu-
reau of the Foreign Office, to which is appended two memoranda 36
concerning a long-standing dispute over income taxes assessed on
Japanese shipping companies by the United States Treasury author-
ities. I understand that the Japanese Charge d'Affaires had been in-
structed to present a similar memorandum to the Department. Mr.
Kurusu called on me personally and begged me to ask that the case be
sympathetically examined by the Department of State from the point
of view of equity and a fair and reasonable deal. Although he did not
actually say so, I gather that he fears a purely technical decision from
the Treasury Department without considering the element of inter-
national comity involved through the placing of these Japanese ships
at the disposal of the United States in the common cause of the Allied
and Associated Powers during the war.
  It is impossible for me, in the absence of further evidence, to pass
on the justice of the Japanese contention as set forth in these memo-
randa. However, if the facts are in accordance therewith, I think that
the Department might well give sympathetic consideration to the Jap-
anese viewpoint, and in view of the circumstances set forth therein,
might feel that it could properly approach the Treasury Department
with a view toward re-examination of the assessments made against
the Japanese shipping companies.
  The Japanese feel that they are not receiving fair treatment in this
case, and that our authorities have taken high-handed measures against
them. I would urge that the case at least be given full and sympa-

36 Not printed.



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JAPAN