893.50/160a: Telegram

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

192. Department refers to reports received from the Legation and from other sources including the press to the effect that the Japanese have concluded or are endeavoring to conclude with the Chinese settlements of various outstanding financial obligations as well as agreements providing for material extension of Japanese economic interests in China.

In view of the foregoing and particularly of recent developments in North China, Department offers, for the guidance and possible assistance of the Legation, suggestions and observations as follows:

Department desires that Legation, as in the past, give intensive and continuing study to the broad subject of the effects on American rights and interests of recent developments in Sino-Japanese relations and that the Legation, in addition to forwarding current reports in regard to particular phases of the situation, submit to the Department from time to time comprehensive analyses of the situation as a whole together with the views and comments of the Legation.

Department desires to emphasize the importance which it attaches to the maintenance on behalf of American interests of effective equality of commercial opportunity and in connection therewith requests that special study be given to the question whether, as a result of recent developments, Japanese interests have obtained or are likely to obtain special or exceptional economic privileges which will not be available to American and other foreign interests.

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In the event that Japanese interests are accorded, either in theory or in practice, preferential treatment, the Legation should promptly report the situation to the Department.