Memorandum by the Chief of the Division of Far Eastern Affairs (Hamilton) of a Conversation With the British Ambassador (Lindsay)

The British Ambassador called at his request. He referred to statements made to him by the Secretary when the Ambassador was calling on the Secretary last Saturday to the effect that it seemed desirable that thought be given to matters as follows: the question presented by the Japanese objections to the passage of the U. S. S. Monocacy to Shanghai; the question whether additional representations of a broad character were called for by the continued Japanese activity in the field of commercial enterprise which resulted in impairment of our commercial rights; and the question whether approaches should be made to the Japanese Government along the lines of the approaches made to Germany during the World War in reference to Japanese pronouncements that certain areas constituted zones of hostilities within which third party interests could not operate or could operate only at their own risk. The Ambassador asked me whether I could throw any further light on these matters.

I said that with reference to the U. S. S. Monocacy the British also had a gunboat at Kiukiang and that there was involved in this matter the whole question of freedom of movement on the Yangtze. I said that all the treaty powers having naval vessels or commercial vessels on the Yangtze were confronted by this large problem.

With regard to our commercial interests in China and the steps being taken by the Japanese through the formation of special companies, [Page 279] monopolies, etc., to close the open door to other foreign enterprises, I said that this Government, like the British Government, had been making representations in regard to individual cases affecting our respective interests as such cases arose. I said that quite recently the British Ambassador at Tokyo had presented to the Japanese Government a list of certain desiderata relating to British interests in China. I said that on July 4 Mr. Grew had taken up with the Japanese Foreign Office in a broad, comprehensive way the question of American rights and interests in China.84 I said that in addition to these approaches and to the representations which were made in individual cases, we were giving thought to the question whether it would be advisable to approach the Japanese Government in any more comprehensive and thoroughgoing manner than had heretofore been the case.

With regard to the assertion by the Japanese Government from time to time that certain areas constituted zones of military operations, I said that, as the Ambassador knew, during the World War this Government had made representations to the German Government as well as to the British Government in regard to our inability to recognize the right of those governments to delimit large areas as areas within which American vessels could not operate. I said that in reference to the situation in China this Government had made representations to the Japanese Government on the occasion of the Japanese Government issuing certain of its notices of the character under discussion. I said that we did not admit that the Japanese Government had belligerent rights and that we proceeded on that basis, at the same time endeavoring to have our action conform to the rule of reason. I said that we were giving study to the question whether it would be advisable to make a general and comprehensive approach to the Japanese Government on this whole question. I added that I personally would prefer, if any such approach were to be made, to have it rest on a case involving completely American rights and interests rather than on a case of only a partial American interest, such as that of the China National Aviation Corporation.

Note: The conversation of which record is made hereinbefore was carried on in very general terms and the subjects mentioned were treated as matters to which consideration of an exploratory character was being given,

M[axwell] M. H[amilton]