693.002/499: Telegram
The Consul General at Shanghai (Gauss) to the Secretary of State
[Received February 10—4:10 p.m.]
235. At a meeting this afternoon which I attended by invitation, French Ambassador and British Chargé d’Affaires agreed to suggest that the Inspector General of Customs communicate officially to the representatives of the three powers the letter outlined in my telegram No. 223, February 8, 6 p.m. whereupon British and French representatives propose to reply that no action should be taken without consultation with interested powers and that so far as concerns funds for foreign loan and indemnity payments no action should be taken without their permission to give effect to the Japanese demand that funds shall not be transferred without Japanese approval from the [Page 652] present banking account of the Shanghai customs. I stated I would report to the Department for instructions. British Chargé d’Affaires told us that his Government is insistent that no customs revenues shall be placed in the Yokohama Specie Bank and that his Government is seeking agreement to this position at Washington and Paris. French Ambassador expressed the opinion that if the desired assurances are given at Tokyo it might be possible to make an arrangement under which revenues could be deposited in the Japanese bank. With all due respect for the British view, I feel that I should say to the Department that the situation appears to be heading rapidly toward the point where the Japanese will take steps to compel deposit of the revenues in the Japanese bank and we shall find them there without any assurances or guarantees.
Repeated to Tokyo, Hankow and Peiping.