The Ambassador in Japan (Grew) to the Secretary of State
[Received July 12—3:43 a.m.]
189. The Embassy was informed this morning by an official of the Information Bureau of the Foreign Office that prospects are favorable for local settlement of the tense situation which arose from the clashes between Chinese and Japanese troops at Lungwangmiao on the night of July 10 and in the early morning of July 11. While the Foreign Office has received no official confirmation that an agreement has been reached between the Chinese and Japanese authorities on the spot it has reason to believe that a satisfactory agreement for the withdrawal of the Chinese and Japanese troops from the scene of action will be reached shortly as the Foreign Office received reports last night that the negotiations were progressing favorably and as no serious clashes have occurred since the early morning of July 11.
The Foreign Office official described matters as follows: The situation resulting from the original Lukouchiao clash appeared to be clearly settled on the evening of July 9; hence the attacks by the Chinese at Lungwangmiao came as a complete surprise to the Japanese troops, who were in the act of withdrawing from the river, and to the authorities in Japan; the situation today seems more hopeful than yesterday when the Japanese Government was considerably concerned; the War Office has decided “in principle” to despatch reenforcements [Page 140]to the Peiping area from Manchuria, Korea and Japan proper; however, these reenforcements will not be sent unless further clashes occur. The Foreign Office informant states that everything now will depend on whether a local agreement is reached by the negotiators and respected by the Chinese troops and whether the Chinese military authorities will be able to restrain those elements of the 29th Army in which anti-Japanese feeling has been engendered by the Blue Shirts. The informant stated further that the development which had caused most concern to his Government was the report that four divisions of the Chinese Army had been ordered by the Nanking Government to mobilize and to move northward; that the movement of these divisions and the flight of Chinese airplanes northward had been confirmed; that in the Foreign Office’s belief the Chinese reenforcements from the South would not be moved into Hopei Province as long as any hope remained for local settlement of the recent clashes.
The Embassy has checked Domei’s translation of the statement issued by the Cabinet on the North China situation last night and found it to be substantially correct.62
Repeated to Peiping.