Office of the Historian

693.002/397: Telegram

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

Tokyo, November 27, 1937—11 a.m.
[Received November 27—3:45 a.m.]

568. My British colleague has given me in confidence the following draft proposal for the readjustment of the Chinese Customs Administration which he handed to the Minister for Foreign Affairs yesterday afternoon with the statement that “the British Government have reason to believe that the proposal might prove acceptable to the various authorities concerned”:

  • “(1) Creation of an international banker’s commission as trustee for all interests concerned.
  • (2) This commission to comprise one representative of each of the American, British, French and Japanese banks.
  • (3) Customs revenue from all China to be centralized at Shanghai under the control of the commission.
  • (4) Deposits to be divided in four equal shares, one share to banks of each nation.
  • (5) Payments of loans and indemnity in accordance with the principle of priority to be paid out of the net customs revenue in respect of all Chinese Government obligations secured on the customs that were receiving service as of July 1, 1937.
  • (6) The arrangement to be operated by the Inspector General of Customs under the supervision of the commission.
  • (7) The arrangement to obtain during hostilities.”

Repeated to Shanghai.

Grew