Office of the Historian

793.94/4341: Telegram

The Consul General at Shanghai (Cunningham) to the Secretary of State

Shanghai, February 20, 1932—7 p.m.
[Received February 20—2:10 p.m.]

91. Continuing my daily report 81, February 19, 6 p.m.

1.
Except occasional bursts of rifle and machine-gun fire the Chapei sector has been quiet. Last night and early this morning tanks and machine guns were moved up by the Japanese from the Yangtzepoo district via Boone to Range Road.
2.
A thousand Japanese troops left for Woosung accompanied by 10 tanks. It has been reported that the Japanese forces have captured the Kiangwan Race Course and are pushing westward. The latest reports not yet confirmed are to the effect that Kiangwan Village has been taken and retaken by the Japanese. The Japanese military are apparently attempting to drive a wedge into the Chinese lines at this point. It has been reliably reported that the Japanese will attempt by this to outflank the Chinese forces in Chapei ultimately driving the Chinese troops back into the Settlement where they will be disarmed by the defense forces. The defense forces have been warned by the Japanese of this possibility.
3.
Woosung has remained quiet although the Japanese have stated that operations would start today.
4.
Shells continue to fall within the Settlement. The latest report at 2 o’clock was to the effect that five shells had fallen at Yenping and Connaught Roads and other shells are reported to have fallen in the Settlement narrowly missing a few foreigners.
5.
The American Marine headquarters report that last evening red and green blinkers were observed to be in use on the top of the Japanese mill at Ichang Road. The Japanese were ordered to discontinue their use. An American Marine detail went into the mill office to investigate. A Japanese covered them with a pistol. He was disarmed and turned over to the police. The control board and blinker lights were demolished. A green flare and a white blinker were observed on other mills of which the managers were warned that they would be arrested if the practice was not discontinued. Last night at 7 p.m. the Japanese Consul called up and complained to this office that he heard that the American Marines intended to arrest Japanese residents of various mills. It was explained to him that certain flares had been observed on Japanese mills and that the managers had been warned that the use of these flares would not be permitted within the American lines.
6.
The British authorities are requiring British vessels to wait [Page 411] beyond Woosung until they receive requests from their agents to come in. Admiral Taylor does not think it necessary to make any orders for American shipping for the present. He is of the opinion that all that is necessary for the time being is to inform all agents of shipping companies that since the conditions are serious and tense they should watch developments as closely as possible and use their best judgment.
7.
Shipping companies state that they are diverting, upon request of consignees, large quantities of cargoes to nearby ports. They do not expect to receive any more heavy cargo such as cotton bales or other merchandise during the present crisis. Only a small percentage of merchandise landed is being accepted by the consignees. Although most of the merchandise is consigned to foreign firms, these firms have in turn been in the habit of giving demand orders on their cargo direct to their Chinese customers. At present many Chinese customers have closed their offices. There is nothing better to do for the consignee than to ignore the consignment. If he has possession he will have to take out 5 percent a month for war-risk insurance whereas storage charges are most advantageous and all responsibility is thus off his hands. Japanese warehouses are practically empty, they are anxious to rent space but unable to obtain coolie labor.

Repeated to the Legation and Nanking for information.

Cunningham