893.102S/1433

The Consul General at Shanghai ( Gauss ) to the Secretary of State

No. 507

Sir: With reference to my despatch No. 496 of November 28, 1936,2 concerning the Japanese demand for control of the police of the northern and eastern districts of the International Settlement at Shanghai, I have the honor to report that Mr. Stirling Fessenden, the (American) Secretary General of the Shanghai Municipal Council, informed me this morning that he had been invited to attend a meeting at the British Consulate General yesterday at which were present the British Ambassador, the British Consul General, the British Consul, the Chairman of the Shanghai Municipal Council (Mr. H. E. Arnhold, a British subject) and the Commissioner of the Shanghai Municipal Police (also a British subject), who discussed the situation which has arisen in connection with these Japanese demands.

Mr. Fessenden tells me that the British Ambassador expressed himself as in agreement with the proposal that the officials of the Council should discuss this matter with the Japanese consular authorities with a view to seeking some arrangement which might meet the Japanese in a reasonable measure.

Mr. Fessenden said that he had expressed the opinion, which is in accord with my own, that an effort should be made to arrive at some compromise arrangement with the Japanese; the object of the discussions to be a reduction of the Japanese demands and an arrangement which will not disrupt the police administration of the Settlement.

He told me, however, that the British Consul General appears to be very much concerned over the Japanese demands, and seems to feel that they must be met in large measure. Sir John Brenan has also told me recently that he feels that the Japanese are determined to accomplish their ends. He seems to feel that any opposition to the Japanese demands will be charged principally to the British since the police organization of the Settlement is largely British and the municipal administration principally under officials who are British subjects.

I am of the opinion that my British colleague takes too serious a view, at present, of the Japanese demands. My impression from my discussions with the Japanese Consul General is that the Japanese will accept very much less than they have demanded; and I believe that my proposal for the appointment of “co-officers” would go a long way toward meeting the Japanese wishes. The authority of the Japanese “co-officer” should, so far as possible, be restricted, and confined to Japanese affairs.

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I do not believe that the anxiety of the British Consul General is fully shared by the British and American members of the Council, who are likely to seek to reduce the Japanese demand to a minimum. While it is not possible to say at this time what course will be followed in event a compromise arrangement cannot be made with the Japanese, it seems—if I interpret correctly the attitude of the officials of the Council as explained to me by the Secretary General—that the whole question of the Japanese demands and the attitude of the police administration in regard to them, will be exposed to the full membership of the Council, including the Chinese. I have emphasized with my Japanese colleague that if the Japanese demands should become known to the full Council—and they must become known if the Municipal authorities are unable to make some mutually satisfactory arrangement with the Japanese—there will likely be strong Chinese opposition to the Japanese demands, and the present difficult situation in regard to Sino-Japanese relations at Shanghai will not be improved.

In his telegram to me of November 22, 12 noon, the American Ambassador, in expressing agreement with my views as set out in my telegram No. 604 of November 21, 4 P.M., to the Department and the Embassy, stated that he believed that the secrecy imposed by the Japanese should be combated. I have held that suggestion in mind, and believe that it should be followed in event that no satisfactory compromise arrangement can be reached with the Japanese to continue substantial foreign (non-Japanese) control of the police in the eastern and northern districts of the Settlement. I am not disposed, however, to urge that any publicity be given to the Japanese demands so long as there exists any possibility of a reasonable and satisfactory arrangement. I feel that if the Japanese demands were given publicity at this time, there might be serious repercussion amongst the Chinese, particularly in the northern and eastern districts, and, perhaps, a renewal of attacks on Japanese in those areas. It seems to me desirable that the matter should take its natural course between the officials of the Council and the Japanese, and then, if there is a breakdown that it should be referred formally to the full Council, with probable resulting publicity.

My British colleague has said nothing to me of the meeting held by the British Ambassador; my information comes confidentially from the (American) Secretary General of the Council who says that he was invited to attend the meeting in that capacity.

Respectfully yours,

C. E. Gauss
  1. Not printed.