The Chargé in Japan (Bell) to the Secretary of State
[Received 1:41 p.m.]
145. Your 49, March 19, 6 p.m. communicated to Foreign Office March 30 on receipt of corrections. Following reply dated yesterday and marked confidential, received today from Minister for Foreign Affairs:
“I have the honor to acknowledge the receipt of your note of March 30 in which you were good enough to inform me of the repeal of certain sections of the Espionage Act of the United States which had bearings upon the joint declaration of the powers providing for the suspension of the supply of arms and ammunition to China and of the attitude of the American Government under the circumstances. I have also carefully noted the statement contained in your note concerning the report of the sale by American merchants to the Canton Government of machinery for manufacturing arms and the establishment at Liutaokou by Japanese subjects of a factory for explosives.
With reference to the report of the sale by American merchants of machinery for the manufacture of arms you inform me that an investigation by your Government reveals the fact that certain machinery which appears to have arrived at Canton and to have been utilized at the Canton arsenal led to [left?] the United States consigned to a shipbuilding concern at Canton and that there was no indication that it was destined for the manufacture of arms and munitions of war. According to the information obtained by the Japanese Government it would appear that the ex-Governor of Canton and the superintendent general of the Canton Arsenal contracted through American merchants (Messrs. Davis and Company) at Hongkong for the obtaining from the United States of machinery for manufacturing rifles and aeroplanes and iron and steel materials for the erection of an arsenal valued at $3,000,000, of which $700,000 being paid in advance as earnest money and that of these articles the arsenal iron and steel materials arrived during the ex-Governor’s tenure of office while the machinery for the manufacture of rifles and the aeroplanes arrived subsequently. Though it is difficult to prove whether this information is correct and whether the machinery for the manufacture of rifles corresponds to what is mentioned in your note, the report in question naturally caused no [Page 557] small amount of excitement among the Japanese merchants who have been suffering most in a very difficult position, where in the face of pressing demand from the Chinese, they are prohibited to effect the demand of the arms and ammunition which were contracted for previous to the adoption of the joint declaration and for which earnest moneys were received from the Chinese. In this case I am contemplating further communication to you with reference to a memorandum recently addressed on the same subject to the British Ambassador in Tokyo. I venture to add on this occasion however that according to further information obtained from another source it would appear that the Chinese authorities at Canton have recently arranged through merchants at Macao to obtain from the United States amphibious aeroplanes for military purposes, those already purchased numbering over a dozen.
With reference to the factory for explosives under Japanese management at Liutaokou I beg to state that though it matters little that there is such a factory there it was established before the joint declaration for the purpose of manufacturing and selling mining explosives for supplying the various mines in Manchuria and at the same time to manufacture and sell powder for hunting purposes. The main equipment of the factory too is designed solely for the manufacture of mining explosives and moreover the said factory has been placed under the supervision of the Japanese consul at Antung without whose special permission none of its products can be sold. Under instructions from this Government the consul has been paying special care in granting that permission, regard being had to the spirit of the joint declaration of the powers for the suspension of the supply of arms and ammunition to China. There is therefore no good reason for the complaints of American merchants referred to in your note.
I beg you to accept, et cetera.”