Office of the Historian

893.102 S/1364

The Minister in China (Johnson) to the Secretary of State

No. 3690
Peiping, July 15, 1935.
[Received August 10.]

Sir: I have the honor to refer to the Shanghai Consul General’s despatch to the Department No. 9069 of August 17, 1933,38 in regard to the usurpation of the Shanghai Municipal Council’s functions by the Japanese, and to invite the Department’s attention to the following subsequent despatches from the Consulate General at Shanghai and from the Legation which tend to show an increasing interest in Shanghai on the part of the Japanese and an increasing determination to assert themselves in matters affecting that port.

In the despatch referred to above, Mr. Cunningham stated that the Municipal Council had not been able to re-assert its jurisdiction in the Hongkew and Yangtszepoo districts and invited attention to the fact that 1) the Japanese were constructing on an Extra-Settlement [Page 311] road without the license of the Municipal authorities a huge building of permanent structure equally suitable for a military barracks or a civic administration building, 2) that the Japanese Residents’ Corporation had intimated in rather strong terms to the Municipal Council the desire of the Japanese community for a larger voice in the administration of the Settlement and larger representation on the Municipal police force, 3) that the Japanese consular police had been materially increased in number and often functioned, so far as Japanese residents were concerned, without consideration of, and adversely to, the Shanghai Municipal police, as evidenced among other things by the existence of a large number of Japanese cabarets, restaurants and bars operating without license of the Municipal Council. (See also Shanghai Consul General’s despatches, 9549, July 10, 1934, 9772, December 15, 1934, et seq.39)

Since the Consul General’s despatch referred to above, there has been an accumulating amount of evidence tending to indicate that the Japanese intend to have a larger voice, if not a predominant one, in matters affecting the Port of Shanghai.

Japanese Residents’ Corporation.

The Japanese Residents’ Corporation, an organization created under Japanese law, and greatly influenced, if not directed from Tokyo by the Japanese Government, appears to constitute, in effect, a municipality within the Settlement which would be capable of extensive expansion. It serves to unify the Japanese in the community and to direct the policy of that community in matters affecting Japanese interests. (See Shanghai Consul General’s despatches to the Department 9876, February 11, 1935; 9986, April 8, 193539). Among other things, it has proposed the abandonment of the International Settlement Schools, and the substitution therefor of subsidies to schools of foreign communities based on the number of school children or the number of rate payers of the respective nationalities, a change which would indubitably benefit the Japanese, (see the Shanghai Consul General’s despatch to the Department 9762, December 7, 1934, November Political Report40), and prior to each election of Councilors, there are rumors that the Japanese intend to exercise their superior voting power to obtain larger representation on the Municipal Council.

Extra-Settlement Roads.

In the matter of the Extra-Settlement roads, the Department will recall that as the result of extended discussions there emerged in June of 1932 a proposed modus vivendi41 which was initialed by the representatives [Page 312] of the City Government of Greater Shanghai and of the Shanghai Municipal Council, but which failed of acceptance, although approved by the American and British authorities, because of the opposition of the Japanese, who took exception to various clauses, but particularly to the provisions governing police control. Continued negotiations eventually resulted in agreement concerning the personnel of the police force, whereby the Japanese were given special consideration as compared with other nations, but there remained to be settled the question of the area to be covered by the agreement. On this point the Japanese have again demanded special consideration in the area in which they are primarily interested, and it appears that they will be able to obtain their desires, the Mayor of Greater Shanghai having assured the Japanese Consul General that no agreement upon the question would be concluded with the Municipal Council without Japanese approval. (See Shanghai Consul General’s despatches to the Department 9964, March 21, 1935;43 to the Legation 8705, June 24, 1935, also to the Department presumably under similar date;44 and the Legation’s telegram to the Department 131, March 29, 1935, 1 p.m.43)

Pilotage Regulations.

The Department will recall also that after extended informal negotiations, the Chinese Government was induced to modify the new pilotage regulations in a manner making them acceptable to the American and British Governments, but that the Japanese have blocked all efforts of the Chinese to enforce the new regulations by their refusal to acquiesce therein. It remains to be seen whether the Japanese will not demand, and receive, some special consideration in this regard. (See Legation’s despatch to the Department 3505, April 12, 1935,45 and previous).

District Court.

When it became necessary in 1933 to revise or to extend the agreement covering the functioning of the Chinese courts in the International Settlement, the Department will recall that the agreement was eventually extended without the participation of the Japanese Government, but that the Japanese Minister hastened to present a Note Verbale to the Chinese Foreign Office asserting the right of the Japanese Government to participate in any future negotiations for the revision or the amendment of the Agreement, and at the same time took measures to inform the other interested Powers of the Japanese position in the matter. (See Legation’s despatch to the Department 1983, March 2, 193346).

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Defense Scheme.

More recently, it will be recalled that the Japanese have gone so far as to endeavor to have the Sino-Japanese Armistice of May 5, 1932,47 incorporated into the Shanghai Defense Scheme, thus apparently seeking to obtain the sanction of the other interested Powers of future action similar to that taken by the Japanese in 1932. (See the Legation’s despatch to the Department 3667, July 3, 1935).

Mr. Cunningham’s despatches indicate that the Municipal Council has in recent years given considerable evidence of timidity in handling matters affecting Japanese interests in Shanghai, and that Japanese consular police and members of the Japanese Naval Landing Party continue to function in disregard of the Municipal administration. The Municipal police authorities were prevented by the Japanese Naval Landing Party from functioning in a case of assault by Japanese sailors on a Chinese woman, (see Shanghai Consul General’s despatch to the Department 9549, July 10, 193448). The Japanese Naval Landing Party functioned in disregard of the Municipal administration and arrested an American citizen, (see Shanghai Consul General’s despatches to the Department 9772, December 15, 1934,48 et seq.), and, more recently, the Japanese ratepayers have been successful in having set aside an agreement between the Municipal Council and the Shanghai Telephone Company, thereby preventing for the time being an increase in rates authorized by the franchise. (See Shanghai Consul General’s despatch to the Department 10, 167, June 29, 193548). In addition, there is the increasing prominence of the Japanese armed forces in Shanghai as evidenced by their frequent and realistic manoeuvers. (See Shanghai Consul General’s despatches to the Department 9782, December 24, 1934;49 9798, January 7, 1935;48 and 10,022, April 29, 193548).

It appears to the Legation that the above events indicate the possible existence of a preconceived plan of the Japanese Government to go its own way in Shanghai without much regard for the rights or interests of the other foreign Powers, that the Governments concerned must be prepared to look forward to a steadily increasing Japanese influence in matters affecting Shanghai, and that, with the passage of time, Japan will assert, and if the present passive attitude of the other interested Powers continues will assert successfully, a paramount influence in Shanghai.

Respectfully yours,

Nelson Trusler Johnson
  1. Foreign Relations, 1933, vol. iii, p. 392.↩
  2. Neither printed.↩
  3. Neither printed.↩
  4. Not printed.↩
  5. See telegram No. 280, June 4, 1932, 1 p.m., from the Consul General at Shanghai, Foreign Relations, 1932, vol. iv, p. 632.↩
  6. Not printed.↩
  7. Apparently not sent to the Department.↩
  8. Not printed.↩
  9. Post, p. 799.↩
  10. Not printed; see footnote 68, Foreign Relations, 1933, vol. iii, p. 620.↩
  11. Foreign Relations, Japan, 1931–1941, vol. i, p. 217.↩
  12. Not printed.↩
  13. Not printed.↩
  14. Not printed.↩
  15. Foreign Relations, 1934, vol. iii, p. 342.↩
  16. Not printed.↩
  17. Not printed.↩