693.94244/8: Telegram

The Secretary of State to the Ambassador in Japan ( Grew )

52. Your 94, May 6, noon.

1. The Department authorizes you to make an oral and informal approach, similar to that of the British Ambassador, to the Minister for Foreign Affairs in regard to the smuggling situation in North China, along lines as follows:

The extensive smuggling operations in North China have created a serious situation in that area. It has been reported, with substantial supporting evidence, that Japanese subjects have taken a prominent part in these operations; that there has been little evidence of a Japanese disposition to curb their activities; that Japanese authorities in China have placed obstacles in the way of the enforcement of Chinese preventive measures; and that the eastern Hopei “autonomous” regime has arbitrarily reduced import duties and has permitted [Page 143] goods on which the reduced rates have been paid to pass into general commerce in China. These conditions are leading to extensive disorganization of the Chinese import trade. This Government is concerned not only with the adverse effect of this situation on American import trade but with the impairment of the Chinese Government’s income from customs revenue which impairment tends to jeopardize the capacity of the Chinese Government to meet its outstanding financial obligations to American citizens.

2. Inform Department by telegraph in regard to your conversation with the Foreign Minister.

3. Repeat paragraph 1 to Peiping as Department’s No. 110, May 8, 6 p.m.