793.94/8206: Telegram
The Consul General at Shanghai (Gauss) to the Secretary of State
[Received October 1—1:20 p.m.]
525. My September 28, 7 p.m. Japanese forces very active today. They have taken up 1932 defense positions in Hongkew and Chapei areas and erected movable barbed wire entanglements at the majority of such posts. Japanese civilian reservists have also been called out [to form?] strong Japanese patrols in Chapei. Reported that these measures have been taken in anticipation of a decision being rendered by the First Special District Court in the Nakayama case; measures are said to be precautionary but may also be intimidatory. Information just received indicates that court today announced judgment would be rendered 2 p.m. tomorrow.
With respect to rumored concentration of Chinese troops in the general vicinity of Shanghai, intelligence officer of the Fourth Marines states that from best information available it appears Chinese troops totalling 10 to 15,000 men have recently arrived in Hangchow but that these units are largely replacements. He estimates an equal force has arrived at Kashing (halfway between Shanghai and Hangchow) which represents a very considerable increase; and about 3500 men at Sungkiang (an entrance to Shanghai and Hangchow).
It is reliably reported that Chinese banks are transferring their funds to foreign banks; silver shipments to the United States are being made on American steamers on their outbound voyages. Such ships proceed to Manila before returning here en route to the United States.