893.51/6740: Telegram
The Ambassador in Japan (Grew) to the Secretary of State
Tokyo, December 17, 1938—2
p.m.
[Received December 17—6:45 a.m.]
[Received December 17—6:45 a.m.]
789. Department’s 419, December 15, 7 p.m.
- 1.
- Reports concerning the grant of credit loan to the Universal Trading Corporation were prominently featured in the papers yesterday afternoon. This morning the papers carry despatches from London and elsewhere stressing that the credit loan, along with the British guarantee covering shipments to China, evidence coordinated action by the United States and Great Britain toward protecting their interests in China.
- 2.
- The Hochi this morning carries a feature story substantially similar to those mentioned in our 786, December 15, 7 p.m.68 It concludes with the statement that the Minister for Foreign Affairs69 will, during his interviews next week with the British and American Ambassadors, emphasize that “the firm determination of the Japanese Government to set up a new order in the Orient will not be shaken” by “British and American assistance to Chiang Kai Shek and efforts to exert economic pressure on Japan”.
- 3.
- An editorial this morning in the Asahi, which is the only one which has thus far appeared, describes the circumstances as set forth in the announcement of the Reconstruction Finance Corporation and concludes that the credits to the Universal Trading Corporation, which it characterizes as a “phantom corporation,” is substantially similar to the British export guarantee to China. “In American financial circles the view is held that this loan was made to China, with Japan held in view and for the purpose of increasing China’s power of resistance, that it is a political loan, and that it is intended to be a gesture in the direction of Japan in connection with questions arising over the principle of the Open Door and equality of opportunity. It is reported that Anglo-American discussions are taking [Page 588] place with a view to concerting measures in the nature of economic reprisals against Japan. In addition to these measures the United States, it is understood, is considering various measures which the President is authorized by law to take in the event of any foreign nation discriminating against American goods.” The various forms of retaliatory action which are reported to be under consideration between United States and Great Britain are then reviewed, and the editorial concludes: “International assistance to Chiang Kai Shek in his efforts to continue resistance is now beginning to take shape. Apart from Soviet Russia it goes without saying that the prime mover is Great Britain. Whether the United States will pull Britain’s chestnuts out of the fire is an open question, but one fact is clear, and that is that the grant of British and American credit loans to China will help the expiring Chiang Kai Shek spiritually, more than materially, and that these loans derive only from a malicious desire to stimulate Chiang to continue resistance.”
Repeated to Shanghai for Peiping and Chungking.
Grew