693.002/636a: Telegram
The Secretary of State to the Ambassador in Japan (Grew)
157. 1. The Department has under consideration the question of an approach to the Japanese Foreign Office along the following lines:
- (a)
- On November 28, 1937, the Japanese Foreign Minister gave you specific assurance that no American interests in the Chinese Maritime Customs would be harmed (your telegram 576, November 28, 4 p.m.85).
- (b)
- Prior to the present Japanese military action in China, the obligations expressed in foreign currencies and involving American interests, secured on the Chinese Maritime Customs revenue, including; surtaxes, were being regularly serviced.
- (c)
- Japanese military occupation of north China has resulted in the economic separation of that area from the rest of China, and exports from that area and commercial transactions therein do not contribute to the foreign exchange resources of the rest of China.
- (d)
- The Department is informed that the Japanese authorities are contemplating measures which will in effect exempt the Japanese-occupied area from its obligation of supplying its share of the foreign exchange necessary for the servicing of the foreign obligations secured, upon the customs revenues for the whole of China.
- (e)
- Such measures, if successfully effected, will so reduce the areas remaining available for the supply of the foreign exchange necessary for the servicing of the foreign obligations, secured upon the Chinese Maritime Customs revenue, as to jeopardize and render almost certain default in the servicing of the obligations in which American interests are involved, and thus completely nullify the assurance given by the Japanese Minister for Foreign Affairs to you on November 28, 1937.
- (f)
- In summarization, an integral part of the obligations involving the Chinese Maritime Customs revenue is the payment of foreign creditors, including American, in foreign currencies; and failure of the areas in north China to assume responsibility for furnishing a fair share of the foreign currencies would in effect constitute non-fulfillment by such areas of a vital element in the obligations.
- (g)
- With the foregoing in mind, the American Government requests assurance from the Japanese Government that the Japanese Government will not agree to or countenance any arrangement which will negative the assurance given by the Japanese Foreign Minister to you.
2. Having in mind the action of the British Ambassador in keeping us informed of the progress of the negotiations which he has been conducting with the Japanese authorities, and our desire to avoid, as far as is consistent with the protection of our interests, any embarrassment to him or to the French Ambassador, the Department offers for your consideration the suggestion that you acquaint the British and French Ambassadors with the proposed approach above outlined, and endeavor to arrive at an understanding with them in regard to such an approach. Would it, perhaps, be practicable for them, under the existing circumstances, to make parallel approaches to the Japanese?
3. Your comment upon the foregoing is requested.