Office of the Historian

693.002/491: Telegram

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

Washington, February 9, 1938—8 p.m.

51. Your 83, February 7, 7 p.m. You state that the British Ambassador is informed from Shanghai that there has been a substantial [Page 651] decrease in revenues and that the Japanese desire, notwithstanding the fact that the foreign loans and indemnity quotas should be the first charge on the revenues, to decrease these quotas pari passu with the decrease in revenue. The Department has not hitherto received any information in regard to this proposed decrease of quotas and before replying to your telegram under reference would appreciate the receipt of any additional information which you and Shanghai may be able to provide.

The Department has received today from the British Embassy here an Aide-Mémoire58 giving among other things the following information:

(1)
General Matsui has stated in a press interview that ample financial resources drawn upon the Customs revenues are to be placed at the disposal of the new Chinese regime and that foreign loan services will have to suffer;
(2)
The Japanese Minister for Foreign Affairs has told a Committee of the Lower House that the Japanese Government will supervise the Shanghai Customs and take over a fixed part of the revenue;
(3)
The British Ambassador at Tokyo has been given to understand that the revenue is to be made to bear the expenses of “other administrations” as well as the Customs administration before the loans are served.

Any comment, confirmation or additional information which you and the American Consul General at Shanghai may be able to give in regard to the foregoing three points will be appreciated by the Department. Early reply requested.

Repeated to Shanghai.

Hull
  1. Dated February 9, not printed.↩