693.002/439: Telegram
The Consul General at Shanghai (Gauss) to the Secretary of State
[Received January 9—4:10 p.m.]
46. In conversation this noon with the Japanese Consul General concerning the customs situation at Shanghai, he told me that he expects instructions from Tokyo within a few days and will then be in a position to resume conversations. He referred to a brief conversation we had held a week ago when he had mentioned to me (rather casually) that it was the Japanese idea here that all revenues should be deposited in the Yokohama Specie Bank and the payment of all loan and indemnity quotas suspended until the cessation of hostilities as their payment regularly might sustain Chinese credit abroad. He recalled that I had promptly and emphatically dismissed any such idea as entirely unacceptable and he later so reported to Tokyo recommending that the quotas be paid regularly as due. He said he hoped his instructions would permit this. I commented that I was interested to know this but that we are interested not only in loan and indemnity payments but in the integrity of the customs and we desire assurances on a number of important points which have been made known to his Foreign Office by the Ambassador at Tokyo and which I again outlined briefly on the basis of the Department’s 393 [Page 629] [339?] of December 12, 3 p.m.33 to paragraph 2. My colleague seemed to be of the opinion that the Shanghai Customs situation might find its solution in the extension to include Shanghai of the jurisdiction of the provisional government at Peiping. His remarks this noon on this and other matters suggest to me that he expects the present unsettled situation at Shanghai to continue for some time and that it is not the present intention to include Shanghai under the puppet regime set up for North China.
Repeated to Hankow and Tokyo.