893.51/2143: Telegram

The Chargé in Japan (MacMurray) to the Acting Secretary of State

The following communique was published by the Foreign Office yesterday:

“On Saturday afternoon, March 1st, Minister Obata sent Secretary Funatsu to the Chinese Foreign Office and delivered a note to the following effect:

‘As the Japanese Government is of the opinion that in the event arms are delivered to China in accordance with the terms of the arms contract, it is likely to obstruct the progress Peace Conference now sitting, it has been decided to suspend the delivery of arms pending the termination of the Conference.

As regards the National Defense Army Loan, the whole amount of the loan was paid over to the representative of the Chinese Government when the contract was signed and the proceeds have been deposited with a Japanese bank on its account. For this reason the Japanese Government has no legal power to stop payment of the fund, but it is desirable that for the purpose of bringing about an amicable settlement between South and North as speedily as possible that the Chinese Government should refrain from drawing out the proceeds of the loan for the present.’”