893.515/838: Telegram
The Ambassador in China (Johnson) to the Secretary of State
68. According to an officer of the Japanese Embassy at Shanghai and to a well-informed Japanese civilian of that city who has close relations with the Japanese Embassy as well as with the Japanese military, the Japanese Foreign Office personnel regards the recent currency measure of the National Government with disfavor.49
It feels that (1) the measure was unnecessary; (2) it was kept secret from the Japanese too long; and, (3) it will not succeed, even if implemented by foreign loan. These informants do not believe that Japan would participate in such a loan. The first informant holds the opinion that devaluation of the Chinese dollar would have been a preferable measure.
- 2.
- These informants state that the Japanese diplomats have been put in an unfavorable position vis-à-vis the Japanese military because the latter believe that the diplomats were caught napping. The Japanese Embassy was given its first intimation that the matter was under consideration on November 2, but the intimation was so vague that the Embassy did not report it to Tokyo. The Embassy was informed only on the afternoon of November 3 that the measures would be made public the following morning. The military believe that an understanding was reached between the British and the Chinese prior to announcement and that the Japanese diplomats ought to have known what was going on. The Japanese diplomats on the other [Page 641] hand profess to believe Leith-Ross’ and Kung’s assurances that the Japanese authorities were informed as early as the British authorities.
- 3.
- The informants stated that the Japanese military are angry over the new measure. According to the second informant, the Japanese military officers in Shanghai have expressed to him the belief that the purpose of the Chinese officials concerned is either eventually to concentrate as much silver as possible in Szechuan (presumably in preparation for resistance against Japanese pressure) or else to concentrate the silver in Hong Kong for their own selfish ends. Both informants state that the Japanese military will do their best to prevent silver from leaving Hopei Province.
- 4.
- The seeming failure of the Japanese diplomats to keep themselves and the military informed of monetary developments in China and to continue to report course of those developments has probably further weakened the influence of the diplomats with the military. The chief reasons for the dissatisfaction of the military would appear to be, (1) the independent spirit exhibited by the Chinese in this instance; (2) the alleged receipt of assistance from a western nation (Great Britain) in so important a matter; and (3) fear that the new measure may work to the disadvantage of Japan’s financial situation.
- 5.
- Japanese officials have shown considerable interest in the questions; (1) whether the American Government has received prior notification of the new measure; and, (2) what if any official advice had been given to American banks.
To Tokyo and Shanghai by mail.