693.002/412: Telegram
The Consul General at Shanghai (Gauss) to the Secretary of State
[Received December 2—2:17 p.m.]
1069. Reference my No. 1058, December 1, 11 p.m.
Hall-Patch tells me that on November 13 he and British Consul General saw Japanese Consul General who admitted receiving instructions to discuss customs questions but stated he could do so only after an agreement with the Commissioner on the control to be exercised by Japanese. He admitted Commissioner had been told to deposit funds in Japanese bank. The British urged that any such arrangement would prejudice whole question and that it should not be made [Page 895] before discussions took place as to safeguarding interests of powers concerned. Japanese Consul General finally agreed to consult his advisers again, to seek new instructions, and to discuss with Hall-Patch further. He has not yet done so, however.
2. Meanwhile, in view of foregoing, Inspector General of Customs has instructed Commissioner that he is unable to authorize Commissioner at this stage to comply with the request for deposit of funds in Japanese bank and that Commissioner should endeavor to arrange further postponement of conversations on subject in order to give time for a satisfactory modus operandi to be found. Commissioner if pressed may state that pending settlement of the immediate local customs issue none of the revenues will be paid over to the Chinese Government.
Sent to [apparent omission] to repeat to Tokyo.