International Oil Cartels and the Japanese Market Relations between International Cartels and Cartels within Japan As Seen in the 1932 Gasoline Agreement

Takeo KIKKAWA

doi:10.5029/jrbh1984.11.33

International Oil Cartels and the Japanese Market

Relations between International Cartels and Cartels within Japan As Seen in the 1932 Gasoline Agreement

Takeo KIKKAWA

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JOURNAL FREE ACCESS

1995 Volume 11 Pages 33-51

DOI https://doi.org/10.5029/jrbh1984.11.33

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Published: March 15, 1995 Received: - Available on J-STAGE: June 28, 2010 Accepted: - Advance online publication: - Revised: -
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Date of correction: June 28, 2010 Reason for correction: - Correction: CITATION Details: Right : 1Keiichiro Nakagawa,“Kokusai kankei keieishi e no mondai teiki”[Business history in its international connections:defining the issue],in Keieishi Gakkai Dai22kai Taikai hokokushu[Collection of papers given at the22nd Conference of the Business History Society of Japan](1986),pp.83,85.
2The merger in the U.S.A.of Socony and Vacuum in July1931led to the birth in Japan,in August1932,of Socony-Vacuum Japan(through the merger of Socony Japan and Vacuum Japan).Therefore,strictly speaking,in this article we shall be looking at Socony Japan and Socony-Vacuum Japan.
3Since Mitsubishi Oil was an amalgamated enterprise set up by a50-50funding arrangement between Mitsubishi of Japan and Associated Oil Company of the U.S.,it could be considered as standing in the middle,between the Japanese side and the overseas side.
4In September1933the two U.S.oil companies Socony-Vacuum and Standard Oil Company of New Jersey each put up half the funds to set up an overseas subsidiary named Stanvac(Standard-Vacuum Oil Company).As a result of this,Socony-Vacuum Japan was reorganized in September1933into Stanvac Japan.
5Masaru Udagawa,“Senzen Nihon no kigyo keiei to gaishikei kigyo,jo”[Business management and foreign affiliated companies in Japan before World War II(pt.1),Keiei shirin[The Hosei Journal of Business],vol.24,no.1,1987,p.17.
6Tosuke Iguchi,Gendai Nihon sangyo hattatsu.shi II,sekiyu[History of the development of modern Japanese industries II:Petroleum](Kojunsha,1963),p.246.
7Shinjiro Kitazawa and Ushinosuke Ui,Sekiyu keizairon[Petroleum economics](Chikura Shobo,1941),p.380,and Ministry of International Trade and Industry(MITI),ed.Shoko seisaku shi dai9kan,sangyo gorika[History of commercial and industrial policies,volume9:Rationalization of industries](1961),p.435.
8The memorandum,telegrams,and letters that I rely upon from this point on are all to be found in these Japan-related documents.
9Memorandum covering the markets of Japan,Korea,North China,South China proper,Formosa,Indo-China and Siam,September1929.
10Socony continued business as an operating company within the United States even after the1931formation of Socony-Vacuum,until June1934.
11Telegram,London to Cairo,Capetown,Yokohama,Sourabaya,Colombo,Melbourne,Nairobi,and Saigon,13June1932.
12Letter,The Rising Sun Petroleum Co.to The Asiatic Petroleum Co.,13September1932.
13Telegram,Yokohama to London,1July1932.
14Telegram,London to New York,1July1932.
15Ibid.
16Telegram,New York to London,6July1932.
17Telegram,Yokohama to London,23July1932.
18Telegram,Yokohama to London,3August1932.
19As a result of fierce competition among the oil companies,the market price of gasoline in Japan fell from a level of45sen per gallon in March1932to the level of32sen per gallon in July-August1932.
20Telegram,Yokohama to London,3August1932.
21Telegram,Yokohama to London,23August1932;Telegram,London to Yokohama,23August1932;and Letter,Andrew Agnew[Director of The Asiatic Petroleum Company]to Richard Airey[New York],21October1932.
22Telegram,New York to London,8July1932;Letter,Agnew to Airey,11July1932;and Telegram,London to Yokohama,23August1932.
23Accordingly,as I mentioned in note3,Mitsubishi can tentatively be placed as somewhere between a Japanese oil company and an overseas oil company.In actual fact,however,1)Associated's percentage of the funding did not exceed the50%set down in what the Japanese government looked on at the time as tentative guidelines;2)because Mitsubishi Oil adopted the policy of refining imported crude oil that the Japanese government was pushing,it received the same treatment as the other domestic oil companies that were refining domestically,and so even after the enactment of the Petroleum Industry Law in1934it increased its share of sales in the Japanese gasoline market.Also,along with the start of Mitsubishi Oil operations in1931,Mitsubishi Corporation ceased the importing and selling of gasoline it had carried on until then.
24Telegram,New York to London,15June1932;and Letter,Airey to Agnew,21June1932.
25Telegram,New York to London,20June1932;Telegram,London to Yokohama,21June1932;and Letter,Airey to Agnew,21June1932.
26Telegram,New York to London,15June1932.
27Telegram,London to Yokohama,16June1932.
28Telegram,Yokohama to London,27June1932;and Letter,Airey to Agnew,29June1932.
29Telegram,Yokohama to London,15June1932.
30Letter,Agnew to Airey,1June1932;and Telegram,London to New York,7July1932.
31Also operative here was the fact that,compared with Nippon Oil,Ogura Oil,and Mitsubishi Oil,which were importing only crude oil,Rising Sun and Socony Japan/Socony-Vacuum Japan,which were importing petroleum products,were much more severely hit by the fall in the exchange rate.
32T.Iguchi,op.cit.,pp.254-57.
33Takeo Kikkawa,“Business Activities of the Standard-Vacuum Oil Co. in Japan Prior to World War II,”Japanese Yearbook on Business History,vol.7,1990,pp.52-54.
34Telegram,Yokohama to London,15June1932.
35For more details on this point,see Takeo Kikkawa,“1934nen no Sekiyu Gyoho to gaikoku sekiyu kaisha to no kosho”[The Petroleum Industry Law of1934and negotiations with overseas petroleum companies],in Kaichiro Oishi,ed.,Senkanki Nihon no taigai keizai kankei[The overseas economic relations of Japan between the wars](Nihon Keizai Hyoronsha,1992).
36Letter,Airey to Agnew,27April1932;Letter,Agnew to Airey,5May1932;Letter,Agnew to Airey,1June1932;Telegram,Yokohama to London,16June1932;Telegram,New York to London,28June1932;Letter,Airey to Agnew,29June1932;and Telegram,London to Yokohama,29June1932.
37Letter,Agnew to Airey,5May1932;Letter,Agnew to Airey,1June1932;Telegram,Yokohama to London,16June1932;Telegram,London to New York,21June1932;Telegram,Yokohama to London,1July1932;and Telegram,Yokohama to London,2July1932.
38Letter,Agnew to H.W.Malcolm[Managing Director of the Rising Sun Petroleum Company],9May1932.
39Telegram,New York to London,6July1932;Letter,Agnew to Airey,8July1932;and Letter,Airey to Agnew,21September1932.
40Telegram,Yokohama to London,29June1932;Telegram,London to New York,7July1932;Letter,Agnew to Airey,8July1932;Letter,Agnew to Airey,11July1932;and Letter,Agnew to Airey,29September1932.
41Telegram,Yokohama to London,11November1932.
42Telegram,Yokohama to London,6April1933;and Telegram,London to Yokohama,6April1933.
43Telegram,Yokohama to London,3December1932.
44Telegram,Yokohama to London,16November1932.
45Telegram,Yokohama to London,16November1932;Telegram,London to Yokohama,17November1932;Telegram,Yokohama to London,3December1932;and Letter,C.M.Howe[The Asiatic Petroleum Company]and Agnew to The Rising Sun Petroleum Company,30January1933.
46Telegram,London to Cairo,Capetown,Yokohama,Sourabaya,Colombo,Melbourne,Nairobi,and Saigon,13June1932.
47Telegram,London to Yokohama,1February1933.
48After the unofficial agreement was arrived at on the terms of the“Six-Company Agreement,”the market price of gasoline in Japan rose from the32-sen-per-gallon level to42sen per gallon in September1932,and to the level of49sen per gallon in December of the same year.
49Telegram,Yokohama to London,8November1932.
50Telegram,Yokohama to London,3December1932.
51Ibid.
52Japan was later in adopting the consumer-site refining policy on petroleum than the more advanced industrial country France.In those regions that were backward in economic development,on the othe hand,the very adoption of the consumer-site refining policy was impossible.It is with these facts fully in mind that I suggest that the widespread adoption of the consumer-site refining policy at this time is proof of Japan's“medium advancement”status.
53Thus,for example,as late as January1933Asiatic was giving a negative assessment of the consumer-site refining policy in Japan.On this point,see Letter,Howe and Agnew to The Rising Sun Petroleum Company,30January1933.
54For more details on this point,see T.Kikkawa,“Business Activities of the Standard-Vacuum Oil Co....”
55K.Nakagawa,“Kokusai kankei keieishi e no mondai teiki,”p.83.

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