Office of the Historian

756.94/153: Telegram

The Ambassador in Japan (Grew) to the Secretary of State

Tokyo, July 1, 1940—6 p.m.
[Received July 1—10:50 a.m.]

523. 1. My Netherlands colleague has just handed me a translation of the Japanese reply referred to in our 508, June 28, 8 p.m.71 A summary of the reply follows in a separate telegram Number 524, July 1, 7 p.m.71

2. In discussing this matter my Netherlands colleague observed that while the Netherlands East Indies was very glad of the opportunity to increase the sale of its products, nevertheless the large quantities required by Japan of certain commodities would amount to a virtual monopoly in these commodities in favor of Japan and to the exclusion of other countries. He felt that the Japanese would undoubtedly increase their demands in the future and that the Netherlands Indies which had in the past scrupulously observed a policy of serving all customers on a basis of equality might be embarrassed at finding themselves in a position unable to supply the demands of certain countries in this connection and he mentioned the requirements of the United States in the matter of tin, rubber, et cetera.

3. As an indication of the possibility of future increased demands, General Pabst said that in his conversation with Mr. Tani on June 29, the latter observed orally that in view of the annual output of 7,000,000 tons of oil in the Netherlands East Indies Japan would expect to receive 2,000,000 tons instead of the 1,000,000 tons already requested in writing. In this connection the Minister understands that Japan [Page 40] is taking no more oil from the Standard and Texas Companies in view of the desire to be independent of American oil.

4. The Minister said that he does not know what the reply of his Government to the Japanese demands will be but he regards this situation as critical when viewed in the light of the Foreign Minister’s radio address on June 2972 and the present temper of the military and other Japanese extremists.

Grew
  1. Not printed.↩
  2. Not printed.↩
  3. See telegram No. 518, June 29, 5 p.m., from the Ambassador in Japan, Foreign Relations, Japan, 1931–1941, vol. ii, p. 92.↩