693.002 Manchuria/85: Telegram
The Minister in China (Johnson) to the Secretary of State
[Received June 21—2:42 a.m.]
680. 1. Mr. Yano, Japanese Chargé d’Affaires, has come to see me under instructions from his Government to say that it has information that Manchukuo authorities are prepared to enter into some kind of an arrangement with Chinese Government whereby and if possible customs [Page 95] collected in Manchuria including Dairen will be paid over to Manchukuo, remainder being remitted as before to Nationalist Government to cover foreign loans and Customs Administration cost. Japanese Chargé d’Affaires states that it is opinion of his Government that if Chinese Government will tacitly consent to such an arrangement integrity of customs will be preserved. He says that it is their belief that if Chinese Government refuse to acquiesce in such an arrangement Manchukuo authorities, who are now pressed for money and who consider that customs surplus is a burden upon people of Manchuria and is being used by Chinese Government to finance opposition against Manchukuo, will take drastic steps to take over entire Customs Administration. He points out that this will of course destroy integrity of customs although it is possible that Manchukuo may make arrangements with interested parties for service of loans. Japanese Government has instructed Chargé to ask British, French and American representatives to cooperate with him in exerting pressure upon Chinese Government to enter into arrangements with Manchukuo as above outlined. I have informed Japanese Chargé d’Affaires that I am without instructions, that I must refer the above to you and that as soon as I receive instructions I will communicate with him further in the matter.
2. Question of Dairen involves Sino-Japanese agreement of 1907 regarding functioning of Chinese customs in leased territory.
3. My British and French colleagues have been similarly approached by Yano and have referred matter to their Governments for instructions.