893.515/508: Telegram
The Minister in China (Johnson) to the Secretary of State
[Received April 5—9:30 a.m.]
140. Your 99, April 3, 5 p.m. I cannot see how we can separate the appointment of an economic technician such as that proposed by the British from (a) an implication that we propose to give China financial assistance; (b) a domestic Chinese political situation which was inextricably tied up with the present financial crisis as indicated in my 106, March 4, 4 p.m. In conversation with British Minister upon my return, reported in paragraph 9 of my 106, Department will observe that British Minister expressed the opinion that British action in inviting international discussion of China’s financial situation might ward off independent action by Japan.
In that conversation the British Minister made another statement which at the time was not related to the above yet when taken with it would appear to have a bearing upon this proposal. He remarked that there was feeling in England that the only solution for the dangerous world situation offered British industry by competition of Japanese made products, lay in giving Japan a free hand in China as a market. Coupled with this he said that to give Japan a free hand [Page 570] in China meant sacrificing considerable British interests and that there was difficulty in preparing a retreat for those interests. I infer that his thought that British action in initiating international discussion of China’s financial needs would forestall independent action by Japan was inspired by his worry over the threat offered by Japan to British interests in China a worry perhaps also entertained in London. I am, therefore, inclined to see in this British proposal an intention to make more concrete an international interest in China’s financial situation for the purpose of preventing independent action by Japan in China.