Foreign Relations of the United States Diplomatic Papers, 1937, The Far East, Volume III

793.94/9192: Telegram

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

Shanghai, August 5, 1937—8 p.m.
[Received August 5—11:10 a.m.]

427. There is a heavy exodus of Chinese from Chapei and Hongkew area to the Settlement and Concession area south of Soochow Creek. Heavy Chinese passenger traffic is congesting the Shanghai–Nanking railroad. Many Chinese are moving to the interior while others are coming to Shanghai. Chinese have worked themselves into a high state of excitement over the probability of war and of Japanese attacks on Nanking and Shanghai.

2. There is much uneasiness [amongst] Chinese bankers who fear that at any time the Japanese may attempt to seize the Central Bank and foreign Chinese banks in the Settlement. They seem to feel that Municipal Council and foreign authorities would not oppose such Japanese action and suggestions have been heard, perhaps intended to disturb foreign interests, that the Chinese might send military forces into the Settlement to quiet China’s financial structure.

3. I understand the British Legation [Embassy] are giving thought to possibility of persuading Chinese Government to declare it has no intention of sending troops to Shanghai area and of persuading Tokyo to a similar declaration hoping thus to ease the situation here. It might be worth while to attempt to obtain such declarations.

Repeated to the Department, Nanking, Tokyo, Peiping.

Gauss