Oil & the Door

Diplomats are supposed to be a tactful tribe, but in Tokyo owl-eyed Mr. Eiji Amau, famed Official Spokesman of Japan's Foreign Office, continues to carve out of tactlessness a great career. Many Japanese expect to see him Premier some day. Last week Official Spokesman Amau fairly surpassed himself when mockingly he announced that if the Great Powers dislike Japan's far-sighted and ingenious oil policy, "they can appeal to China!"

Three months ago the Son-of-Heaven, cloistered Emperor Hirohito, proclaimed a National Oil Business Law so bold and drastic that at first it was scarcely taken seriously outside Japan. Provisions: 1) foreign oil companies doing business in Japan must build additional storage tanks and keep always on hand a six-months' supply of petroleum in addition to their normal needs; 2) they are subject to quota restrictions on retail sales which thus far have been rigged to favor Japanese oil companies at the foreigners' expense; 3) the Government reserves the right "in case of emergency" to purchase all petroleum in Japan at its own price, which may be below cost or purely nominal (i. e. confiscatory); 4) to ensure compliance with the law, foreign firms will be licensed to operate for only one year at a time and must file estimates of the amount of business they expect to do for several years in advance. Once an estimate has been accepted by the Government, all petroleum called for therein must be imported "irrespective of business conditions." Thus a huge oil reserve for the Japanese Navy must be piled up and maintained by oilmen of prospective enemy countries at their own expense--unless they prefer to quit doing business in Japan.

Over in Manchukuo the same foreign oil firms are being squeezed, if possible, even harder. The Japanese Government owns half the stock of the South Manchuria Railway, which in turn owns 40% of something called the Manchuria Oil Co., 80% of whose stock is in Japanese hands. To this firm His Majesty the puppet Emperor of Manchukuo has been graciously pleased to grant a monopoly of petroleum sales within his realm. President of the Oil Monopoly is Mr. Keizaburo Hashimoto, brother-in-law of famed General Takashi ("Happy Sparrow") Hishikari, the Japanese Ambassador to Manchukuo and Commander-in-Chief of the Japanese Army in Manchukuo.

Last week Japanese censors in Manchukuo held up for several days but finally passed news that early next year the Oil Monopoly will: 1) banish from Manchukuo the familiar cans of Standard Oil, Texas Co., Asiatic Petroleum Co. (Anglo-Dutch Shell group), every oil can in future to bear the stamp of the Japanese-controlled monopoly; 2) permit foreign firms to sell petroleum to the Monopoly only after it has purchased the entire produce of the South Manchuria Railway's shale oil plant and the new Dairen refinery.

Obviously this program will annihilate the millions of dollars worth of goodwill built up by foreign firms with their brightly colored oil cans which Manchukuans use for everything from cooking utensils to tin plates for their roofs and linings for their coffins. It will also mean that Manchukuans will have to pay the extravagant cost of working Japan's shale oil refineries, always run hitherto at a loss but kept going for strategic reasons.

Tokyo papers were forbidden last week to print the fact that patient, persuasive U. S. Ambassador Joseph Clark Grew and his British and Dutch colleagues of the diplomatic corps were protesting both the Japanese oil law and the Manchukuo monopoly. At the Foreign Office truculent Spokesman Amau refused even to discuss the former. "Japan," said he, "is a sovereign state!"

"And another thing," said Mr. Amau, polishing his glasses. "Manchukuo is an independent nation. When did we ever occupy Manchukuo?* Manchukuo is independent. Japan has recognized it as such and we cannot receive protests for Manchukuo. If the powers regard Manchukuo as still part of China, let them deal with China. Yes, they can appeal to China!"

When Mr. Amau was reminded that Ambassador Grew and the other protesting diplomats accuse Japan of violating Article III of the Nine-Power Treaty of 1922 which guaranteed the "Open Door" to all Great Powers in what is now Manchukuo, Japan's spokesman triumphantly quibbled: "It is not then Manchukuo!"

"I do not think that Japan is committed by treaty to respect the Open Door in Manchukuo," was Spokesman Amau's parting shot. "She merely declared publicly that she would do so. She is not committed."

Official Washington said that President Roosevelt would "stand on the Nine-Power Treaty." Realistically London's Financial News observed: "In all probability a settlement favorable to Britain can only be reached as part of a general agreement between Britain and Japan covering such political issues as the naval conference (see p. 16), mutual assistance and eco nomic matters like trade in Manchuria, in the British Empire and elsewhere, which are now being discussed by the Federation of British Industries Mission in Japan."

Members of this unofficial mission, to the distress of His Majesty's Government, have been spouting up & down Japan of late their ardent hope for a resumption of the pre-War Anglo-Japanese Alliance.

* The conquest by Japanese armies of the Chinese provinces of Manchuria began on Sept. 18, 1931; the independence of "Manchukuo" was proclaimed March 1, 1932; and every official of the Manchukuo Government has attached to his office a "Japanese adviser" (i. e. boss). Japanese soldiers occupy all strategic points in Manchukuo.

Only other recognizer: El Salvador.

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