Memorandum by the Adviser on Political Relations (Hornbeck) to the Secretary of State

Mr. Secretary: With further reference to the question of sending reenforcements to Shanghai, may I say:

As I understand it, in 1927 the American Government, when appeal was made for us to send armed forces to Shanghai, at first replied [Page 422] in the negative and then a little later decided to send an armed force. There thereupon was sent, from San Diego, a regiment of marines. To send this force there was chartered a ship of the Dollar Line. The cost of transportation amounted to about $120,000. From that time until now we have maintained a force of marines at Shanghai.

In 1932, when reenforcements were asked for, we sent the 31st Regiment, U. S. A., and a small number of marines. At the outset there was some difficulty in fitting the army force into the requirements of the situation at Shanghai. The 31st Regiment is organized like a small army: it has an elaborate staff and is prepared for field operations. For the purposes of defense operations at Shanghai it possessed a superfluity of staff and of equipment. Also, because of army regulations and procedure, it had not the degree of elasticity for administration which prevails in a detached organization of the Marine Corps.

No matter whether we send army from Manila or marines from San Diego the critics will complain of the essential fact, namely, that we are sending additional forces to Shanghai.

Nevertheless, I feel that we should send additional forces. The port of Shanghai is a unique and extremely important political and economic entity. It has been developed by international effort—over a period of more than a hundred years. The “Settlement” there is actually as well as in name “International”. Although it is not a sovereign entity, it has long been controlled by the Powers rather than by the Chinese Government. Its own municipal organization is an organization wherein there exists a Council, which is elected by the taxpayers and on which several Powers, including the United States, are represented. At the present moment, the chairman of that Council and its permanent secretary are American nationals. Under that Council there functions a volunteer military organization made up of volunteers from among the residents of the various nationalities. Ever since 1927 there have been at the port armed forces, including the American force (marines). There now exists a situation of emergency. There will be operations for the sending away of a considerable number of foreign nationals, especially women and children. But, I do not envisage a complete “evacuation” on the part of the 40,000 foreign residents. Moreover, there has been invested at Shanghai a tremendous amount of capital of all nations, including American, and including Chinese and Japanese. A complete abandonment of the port, leaving the city to be fought over and fought for by China and Japan would be calamitous to the whole world both from the economic and from the political points of view. Unless other Powers are prepared to make such an abandonment, the United States should not abandon its responsibilities in connection with the common world interest which there exists. Shanghai is the economic nerve center [Page 423] of China and even in a way of the whole commercial Far East. Destruction of that nerve center would disorganize the economic system, insofar as organized business is concerned, for the whole of China and would seriously affect the trade of all parts of the world with China and even with other parts of the Far East, Moreover, the system of extraterritorial rights applies in regard to Shanghai, and the interests and rights of the Powers there are inextricably interwoven. We must keep in mind the fact that the situation and the problem there are unique and cannot be compared, as regards similarities, with the situation and problems at any other port in the world.

No matter whether we now or within a few days find that a “state of war” exists; no matter whether we apply the neutrality act; no matter whether we ultimately decide to evacuate all of our nationals from all parts of China; no matter whether in course of time we make such a decision effective (it would take time to do it); no matter what changes in attitude and in policy we may make with regard to the Far East; the situation at Shanghai now is one in which responsible officers on the spot have asked for reenforcements. The British Government is already sending reenforcements. The French Government is reported to be preparing to send reenforcements (from Indochina). We would assume a very grave responsibility and we would be on this account in an unenviable position from point of view of world opinion if we responded in the negative to the recommendations of our own officers in the premises.

We could give orders today for the Navy Department to have the Marine Corps prepare the marines at San Diego for embarkation. There will elapse between now and the period when embarkation could be effected a period of perhaps ten days or a little more. Should the situation change so as to make inadvisable actual embarkation at the moment when embarkation is possible, we could then cancel the orders.

I feel strongly that the orders should be given and that publicity should be given to the fact that they have been given.

S[tanley] K. H[ornbeck]