The Consul General at Shanghai (Jenkins) to the Minister in China (Johnson)23
Sir: I have the honor to refer to my confidential despatch No. 6678 of October 27 , 1930,24 concerning the extra-settlement roads and to report the substance of a conversation I had with General Chang Chun, the Mayor of the Municipality of Shanghai, on December 19, 1930. The Mayor began by explaining that he had no authority to enter into negotiations, which could only be handled by the Central Government. However, he recognized the seriousness of the situation and had recently discussed the matter with certain high officials at Nanking.
In the opinion of these officials the extra-settlement roads question was bound up in the larger one of extraterritoriality and it seemed rather inconsistent, in the opinion of the Nanking officials, the Mayor said, to undertake to negotiate about these roads at a time when the Government was considering the entire abolition of extraterritoriality. The Mayor added, however, that the responsible authorities at Nanking [Page 352] recognized that foreigners actually had vested interests outside the settlement which could not be ignored, and if certain features regarded as vital to Chinese sovereignty were adjusted, it might be possible eventually to find a settlement.
According to the Mayor, the Chinese would not consider negotiations at all if the foreign interests concerned were not prepared at the very outset to admit the right of China alone to police and levy taxes in the outside roads area. If these two points could be disposed of, the Mayor seemed to think it might be possible to find a basis for negotiation. Unfortunately he did not say what the Chinese would be prepared to do if the foreigners abandoned the rights they now claim to police and levy taxes in the area, and I did not think it wise to ask for details at the time.
General Chang Chun led me to understand that the Chinese authorities were not prepared to negotiate through the Chinese members of the settlement council, but wished the extra-settlement roads matter to be taken up through diplomatic channels. The Mayor expressed the opinion that as Great Britain and the United States have more extensive interests in the question than any other foreign powers, the negotiations might possibly be undertaken by the British and American Ministers to China.
I am informed confidentially, through trustworthy private sources, that unofficial discussions are actually proceeding in which Chinese officials are taking some part, and there is still a possibility of a settlement of the outside roads question although no definite predictions can be made. Judge Feetham25 is understood to be a party to these discussions, or at least he is being kept informed. It is expected that his report will be ready for submission to the Council within the next month or two, and it seems highly probable that it will touch on the matter of the extra-settlement roads.