693.002/404: Telegram
The Consul General at Shanghai (Gauss) to the Secretary of State
[Received November 29—7 a.m.]
1030. Reference my No. 1026, November 27, 5 p.m., concerning the Shanghai Customs. I had a frank discussion this morning with the Japanese Consul General who while most courteous and friendly, made it very clear that the matter of the Shanghai Customs will be arranged between himself and the Commissioner of Customs and that while foreign interests in the administration and the revenues such as loans and their quotas ought to be [will be] respected, he will not consult or discuss with his interested colleagues or any other third parties. Incidentally he stated that the customs revenues must be deposited in the Yokohama Specie Bank.
- 2.
- Hall-Patch, the British Financial Adviser, has endeavored to discuss the customs matter with Okasaki, a Consul General at large acting as liaison with the military authorities, and has been told substantially what the Japanese Consul General told me this morning.
- 3.
- The danger in the situation is that the Shanghai Commissioner of Customs will yield to the Japanese pressure. He is not an astute person and his principal concern appears to be to avoid Japanese seizure of the stores. Efforts are being made through his own people to have him delay while negotiations are attempted at Tokyo.
- 4.
- While the Japanese Consul General did not discuss foreign pressure in connection with local conditions in reference to the matter of opening up the areas north of the Creek to foreigners he told me that he had about arranged with the military a plan to open up these areas by sections when press reports of discussions in the British Parliament suggested that British Government was bringing pressure to bear on Japan and the Japanese pointedly have refused to go on with the matter as to do so would suggest a yielding to foreign pressure.
- 5.
- It is clear that the Japanese here intend to take the position before the Chinese and before foreign interests that they are definitely master of Shanghai and will tolerate no interferences or pressure from any quarters. While they say they will respect foreign interests in taking over at Shanghai they make it plain that they do not propose to consult or discuss with any third parties.
Repeated to Tokyo.