Office of the Historian

693.002/491: Telegram

The Ambassador in Japan (Grew) to the Secretary of State

Tokyo, February 7, 1938—7 p.m.
[Received February 7—10:18 a.m.]

83. Department’s 37, February 3, 9 p.m.

1.
My British colleague informs me that he is willing to make to the Japanese Government an approach along the lines of pressing for the assurances with regard to the customs at Shanghai which the American Government has already requested. He feels, however, that we should when making those representations express disapproval of the arrangement which the Japanese have proposed. He points out that the Japanese have already given oral assurances that foreign rights and interests in the customs would be respected but that in fact the arrangement which they are pressing the Commissioner of Customs to accept violates that assurance. Craigie is informed from Shanghai that there has been a substantial decrease in revenues and that the Japanese desire, notwithstanding the fact that the foreign [Page 650] loans and indemnity quotas should be the first charge on the revenues, to decrease these quotas pari passu with the decrease in revenue. He believes that we could quite properly say to the Japanese that the arrangements relating to the service of the foreign debts and indemnities can only be modified by the Japanese Government (as by the Chinese Government) with the assent of the powers which have acquired rights in this matter in virtue of past agreements.
2.
It seems to us that Craigie’s point is well taken. If the Department shares that view, will it be disposed to authorize modification of the suggested line of approach so as to include disapproval of the proposed Japanese arrangement?
3.
My French colleague is cabling for instructions.

Repeated to Shanghai for Hankow.

Grew