811.5034 China/412

The Ambassador in China (Johnson) to the Secretary of State

No. 1158

Sir: I have the honor to enclose for the information of the Department copies of confidential despatch No. 705 of March 16, 1937,37 from the Consul General at Shanghai38 to the Embassy, in regard to [Page 693]the apparent attempt on the part of the Soviet Government and/or the Third Internationale to disseminate Communist propaganda at Shanghai through local newspaper, radio, motion picture and book firms, which they endeavor to have registered at the American Consulate General as American concerns for purposes of protection.

The Department will recall that the Embassy transmitted to the Department with its despatch No. 1109 of March 9, 1937, copies of Shanghai’s despatch to the Embassy No. 671 of February 25, 1937,39 regarding an attack made on the Isis Theatre, Shanghai, by a group of Italian sailors and civilians who apparently resented the exhibition of a Russian film, Abyssinia, relating to the Italian conquest of Abyssinia. Mr. Gauss stated therein that he had some reason to suspect that the Asia Films of China, the American firm responsible for the distribution of Abyssinia, might be but a facade set up to cover Soviet film distribution, in the same manner that he had reason to suspect that, in a small way at least, other Soviet activities in Shanghai might have been carried on under nominal American ownership. In his present despatch Mr. Gauss reports further instances to support his suspicions. He states that, being fully aware of the traditional American policy of freedom of speech and the press, interested Communist entities obtain the services of unscrupulous local American citizens, generally naturalized and having close Russian connections, to cover their Communist activities. Mr. Gauss adds that the attempts on the part of those desiring to disseminate propaganda at Shanghai under American protection have become so frequent and pronounced that he is concerned over the effect they will have on the friendly relations between the Consulate General and the local Chinese and other authorities.

Respectfully yours,

For the Ambassador:
Frank P. Lockhart

Counselor of Embassy
  1. Not printed.
  2. Clarence E. Gauss.
  3. Neither printed.