693.94244/20: Telegram
The Ambassador in Japan (Grew) to the Secretary of State
[Received May 20—6:54 a.m.]
109. Embassy’s 108, May 18, 2 p.m. My British colleague yesterday informally discussed the smuggling situation in China with Matsudaira, former Ambassador to Great Britain, now Minister of the Imperial Household. Clive made it clear that there had been no joint Anglo-American representations but that the practical interests of both our countries were seriously affected by the situation. He realized that the Japanese military in China could not be expected to “climb down” immediately from the position they had taken because this would entail loss of face in view of the British and American démarches but he thought that the matter ought to be adjusted by early and direct negotiation with Nanking. It might be true, he said, that some of the Chinese tariff schedules were too high but the action of the East Hopei regime in permitting goods to enter China at greatly reduced rates with the support of the Japanese military was disrupting the whole Chinese customs organization and if continued would lead to increasing friction with Great Britain where questions were now being asked in Parliament.
Clive said that Matsudaira promised to talk immediately to Arita87 and seemed to be considerably impressed with the potential seriousness of the situation. Clive observed to me that the Japanese are “terrified” by any indication of Anglo-American cooperation in the Far East and he feels that even similar if not joint representations possess great power of leverage.
An opposite point of view was expressed to me this morning by Yoshida88 who said that Arita had been greatly disturbed by the smuggling activities in China and had been trying to find ways and means [Page 161] to improve the situation but that the publicity arising out of the American and British démarches had rendered his position difficult and embarrassing because whatever he might now do would be interpreted as done under foreign pressure.
These are opposing points of view but they both carry weight. The Japanese undoubtedly are fearful of facing a united front by the United States and Great Britain but the chauvinist element would be inclined to object to anything that could possibly be interpreted as “truckling” to foreign pressure.
Clive is not aware whether the Germans are interested as reported in the press. The British Counsellor mentioned the situation to the German Chargé d’Affaires merely in casual conversation. The French Ambassador said that nothing could be expected from his Government which at present is in a state of crisis.
The German Chargé d’Affaires told me last evening that his Government is not interested in the smuggling situation in North China since German commercial interests in China lie chiefly in the South.
To Peiping by mail.