situation would arise. The Ambassador seemed taken back for a moment, but he smiled and said that he understood. As I rose to leave, the Ambassador expressed his appreciation of the informal and personal manner in which the matter under discussion had been presented to him. 893.01B11 Manchuria/17 The Department of State to the Japanese Embassy 6o The American Government has throughout viewed with disapproval the presence in this country of an American citizen acting in the capacity of a salaried spokesman for the unrecognized political régime in Manchuria. It has been our assumption that this spokesman has been here with the approval if not the express authorization of the Japanese Government, or at least that without the approval of the Japanese Government he would not have been here in that capacity. In probably no other country is the principle of freedom of speech more completely observed in practice than in this country. The American Government places few restrictions upon and makes little objection to free expression of opinion. However, we regard as anomalous and undesirable the employment of American citizens by foreign countries in the endeavor to influence public opinion in the United States in the direction of modification of views or policies or of adoption by the United States of views and policies differing from those to which the American Government is giving effect. It is felt to be particularly objectionable that advantage is taken by such persons of the freedom of speech in the United States to carry on propaganda in behalf of and at the instance of governments which would not regard with indulgence similar activities in their territories on the part of the employees of foreign countries. Adverse criticism by a citizen or subject in the employ of a foreign government of an attitude or policy of his government cannot be expected to cause a change in his government's attitude or policy: such criticism usually serves merely as an irritant and to becloud understanding of, and to render more difficult a friendly and frank approach to, problems in relations between governments. The activities of such persons therefore are a disservice to both governments concerned. This Government, seeking to promote amicable relations between the United States and all countries with which this country has relations, doubts the wisdom of employment by foreign political authorities of American nationals as spokesmen for such authorities and would certainly view with regret any further use by such political Handed to the Japanese Ambassador by Eugene H. Dooman of the Division of Far Eastern Affairs, November 28. authorities of American nationals as their spokesmen or "unofficial representatives" in this country. 893.01B11 Manchuria/17 The Chief of the Division of Far Eastern Affairs (Hornbeck) to the Ambassador in Japan (Grew) 61 WASHINGTON, November 28, 1936. DEAR MR. GREW: I refer to my letter of September 10, 1934, to previous correspondence on the subject of George Bronson Rea, and to our conversation during your recent visit to Washington on the subject of propagandists. We had prepared a memorandum on the subject of the employment as propagandists of American citizens by foreign political authorities, which we intended to send to you as reference material in considering what might appropriately be said to Arita on that subject. However, before we had got around to sending you the memorandum, Rea died, a few days ago. At about the same time, evidence came to hand that the Japanese Government is casting about for some one to continue with certain of Rea's activities, and we came to the conclusion that any action that might be taken toward discouraging the appointment of an American citizen as a paid propagandist for "Manchukuo" should for maximum of potential effectiveness be taken as soon as possible. We came to the further conclusion that there would be advantage in our making an early approach here to Saito. The memorandum was accordingly appropriately modified and in the course of a conversation was this morning handed to Saito as a memorandum of an informal oral statement. A copy of that statement is enclosed.62 Saito's first comment after reading the statement was that the cause of "Manchukuo" might be better presented in the United States by a Manchurian than by an American citizen, and that for that reason he had recommended last year that Rea be recalled to Manchuria. However, we made it clear to him that the views which we had expressed to him are applicable, not only to "Manchukuo", but to Japan or to any other country which places itself in a like position in the matter of propaganda. Saito made the further observation that, if the "Manchukuo" government should decide to send to the United States a Manchurian for publicity purposes, the Japanese Government could do nothing in the matter. We replied that, in our opinion, no useful purpose would be served by the occurrence of incidents which would emphasize the differences between the American Government and the "Not printed; see letter of August 20, 1934, from the Ambassador in Japan, Foreign Relations, 1934, vol. ш, p. 679. 62 Supra. Japanese Government rising out of the political situation in the Far East, and that, if the "Manchukuo" Government were to send an agent to the United States for publicity purposes, and if this Government should feel constrained to refuse him entry, a situation might arise which would not serve the cause of promoting friendly relations between the United States and Japan. We further emphasized to Saito the point made in the penultimate paragraph of the memorandum. We assume that the matter of our approach will be reported to Tokyo by Saito. We believe that it would be helpful if you would, if you feel so disposed and have favorable opportunity, reenforce our action here by making some appropriate observation to Arita. Yours sincerely, S. K. HORNBECK REPRESENTATIONS ON ESTABLISHMENT OF OIL MONOPOLIES IN JAPAN AND MANCHURIA " 894.6363/239: Telegram The Ambassador in Japan (Grew) to the Secretary of State TOKYO, January 7, 1936-1 p. m. [Received January 7-6:30 a. m.] 64 3. Embassy's 246, December 19, 3 p. m. I discussed the situation of the oil companies today with the Vice Minister for Foreign Affairs 65 on the basis of paragraph 4 of Embassy's 240 December 13, 6 p. m. The Vice Minister made no comment except to say that the Government had no intention to deprive the foreign companies of a reasonable economic return and that he would see what if anything could be done. The Dutch Minister recently made similar representations. GREW 894.6363/243: Telegram The Ambassador in Japan (Grew) to the Secretary of State TOKYO, January 15, 1936-11 a. m. [Received January 15-1:27 a. m.] 1. At a recent conference of the representatives of the foreign oil companies with Kurusu 68 the latter stated that the Vice Minister for 63 Continued from Foreign Relations, 1935, vol. I, pp. 877-939. 67 Ibid., p. 939. 65 Saburo Kurusu, Chief of the Commercial Affairs Bureau, Japanese Foreign Office. 69 Commerce and Industry " agrees in principle with the plan of giving the oil companies governmental guarantees covering quotas over an extensive period, reasonable profit and maximum stock holding obligation as well as equal treatment with Japanese refiners should the oil companies desire to refine in Japan. Kurusu therefore requests the oil companies to propose definite terms upon which they will comply with the stock holding provision of the law and the question has been referred to New York and London for consideration. 2. The Embassy and the local representatives of the oil companies are of the opinion that the Japanese authorities are now sincerely endeavoring to find some solution of the problem which will permit opposing oil companies to continue in business in Japan although it appears highly improbable that they will be able to allow stock holding obligation. It, therefore, appears desirable that the Japanese proposal outlined above be carefully considered. GREW 893.6363 Manchuria/281 Memorandum by Mr. Raymond C. Mackay of the Division of Far Eastern Affairs of a Conversation With Mr. Claude A. Thompson, General Counsel of the Standard-Vacuum Oil Company, New York [WASHINGTON,] January 24, 1936. Mr. Thompson called the Department by telephone from New York and was referred to Mr. Mackay. Mr. Thompson said that he wished to inform the Department that his proposal (see memorandum of January 9, 1936 70), to the effect that an endeavor be made to cause the Japanese Government to use its good offices with a view to causing the authorities in Manchuria to compensate the oil companies for losses incurred as a result of the creation in that area of an oil monopoly, had met with the approval of the Standard-Vacuum Oil Company; that it had also met with the approval of the Shell interests in London to whom the matter had been explained by Mr. Walden" who is now in England; that both companies, however, are of the opinion that it would be inadvisable to initiate any new action in regard to the oil situation in Manchuria until such time as a definite decision has been reached in regard to the oil situation in Japan; that, at least for the moment, no further assistance is required; and that the company will keep the Department informed of all developments of importance. Shinji Yoshino. TO Not printed. "G. S. Walden, chairman of the board of directors, Standard-Vacuum Oil Co. Mr. Mackay thanked Mr. Thompson for his kindness in keeping the Department currently and fully informed in regard to the oil situations in Manchuria and in Japan. 894.6363/247: Telegram The Ambassador in Japan (Grew) to the Secretary of State TOKYO, February 24, 1936-8 p. m. [Received February 24-10: 10 a. m.] 34. Embassy's 12, January 15, 11 a. m., American oil interests in Japan. 1. Kurusu informed the Embassy on February 22 that the Vice Minister for Commerce and Industry had just called on him and had stated that: (a) It would be impossible to change the law and regulations and consequently the 6 months' storage provisions would have to stand. (b) It might be feasible to place a maximum on the amount of oil to be stored but any proposal to this effect must come from the foreign oil interests. The Vice Minister could then discuss the proposition with the military and other interests. (c) The quotas for the second quarter of this year must soon be considered and if the foreign companies definitely and finally refuse to store 6 months' stocks, it will be necessary to reduce their quotas. (d) Mitsubishi and Nippon Oil have applied for permission to add to their refining facilities, probably having in mind an eventual refusal of the foreign oil interests to comply with the law and consequent reduction of their quotas. The Vice Minister is now holding up these applications but will be compelled to grant them if the foreign oil companies do not agree to carry 6 months' stocks. (e) Therefore, the Vice Minister recommends that the foreign oil interests present a concrete proposal offering to store 6 months' stocks under the following or somewhat similar conditions: (1) that 6 months of 1934 or 1935 be taken as the maximum storage requirement; (2) that adequate compensation be paid by the Government; (3) that adequate guarantees of future business be given. (f) If the Vice Minister has some such proposal, he can continue the present quotas, at least until June 30, 1936, and can refuse the applications for additional refining capacity, on the ground that the foreign oil companies have not refused to comply with the law but on the contrary have agreed to store the oil under certain conditions. The foreign oil companies' objections to the establishment of a precedent of 6 months' storage will be overcome by the fact that they have agreed only to store a fixed quantity in gallons and not half of their previous year's sales. 2. The local representatives of the foreign oil interests have telegraphed the substance of the above to their respective head offices, |