A DISPUTE OVER OIL

New Zealand Herald, Volume LXXII, Issue 22139, 19 June 1935, Page 10

A DISPUTE OVER OIL

Though just officially announced in the House of Commons, it is some time since British and American oil interests left Manchukuo, despairing of any relaxing of the monopoly declared there. The dispute is over a year old. It began in October, 1934, when the Manchukuo Government announced that the Manchuria Petroleum Company would control all sales of oil throughout the country. Continual protests have been made by Britain, the United States and Holland. They have been addressed to Japan, but the reply has been a refusal to interfere with the domestic affairs of Manchukuo, and an assertion that its independence is very real. Britain protested that declaration of the monopoly did not conform with the promise Manchukuo made, when claiming independence in 1932, to maintain the principle of the open door in China. The Japanese reply was a suggestion that Britain could not, while refusing to recognise the independence of Manchukuo, also rely on a statement such as this. There has been a good deal of verbal sparring over the whole issue. For example, Sir John Simon, when Foreign Secretary, said publicly and officially that the South Manchuria Railway Company, a large shareholder in the Manchuria Petroleum Company, was "well known to be controlled by the Japanese Government." In fact it has been suggested that the establishment of this monopoly, which is linked up with the working of extensive oil-shale deposits in Manchukuo, is part of a movement to safeguard Japan's supplies, especially to assure the Navy all the oil fuel that it requires. Whatever the forces underlying what has been done, Japan has steadily refused to move in response to protests. Finally the foreign oil interests abandoned the territory. It has been suggested that Manchukuo will now have to overcome a temporary shortage of supplies, since she is not 'self-supporting in fuel oils. However, the great companies have withdrawn, and no sound of distress has been heard.