893.515/830: Telegram
The Counselor of Embassy in China (Lockhart) to the Secretary of State
[Received 3:55 p.m.]
119. Embassy’s No. 117, November 4, 5 p.m.47 A responsible officer of the Japanese Embassy here stated to a representative of this Embassy yesterday that Japan has no objection to the stabilization of China’s currency but would of course be considerably concerned about an inflationary move which would inevitably affect adversely Japan’s export trade to China. Takahashi, Assistant Military Attaché, informed a representative of the press that the Japanese Army does not view favorably new monetary measures but that the army has not yet determined what its attitude will be in the matter of accepting the new plan. Both the Japanese and British Embassies here profess to have had absolutely no prior knowledge of the move. The Japanese attitude would seem to depend largely on the following factors: (1) Whether financial support to make the plan effective has been obtained from the British Government or private British banking interests through Leith-Ross negotiation (2) whether the measures will interfere in Japanese plans for the economic development of North China or (3) whether the trade of Japan with China as a whole will be adversely affected. It would be better to be [sic] well within the power of the Japanese Government to prevent the implementation of the plan in North China if they desire. To do so would require rather drastic action which might well have an important bearing on the so-called independence movement in North China.
One notice of the result so far has been a rise in the price of commodities both domestic and foreign in the Tientsin and Peiping markets as well as elsewhere. Some silver is already being exchanged over the counter for notes at Chinese banks.
Repeated to Nanking and Shanghai and by mail to Tokyo and Tientsin.
- Not printed.↩