693.002/695: Telegram
The Consul General at Shanghai (Lockhart) to the Secretary of State
[Received June 15—8 a.m.]
838. Embassy’s 279, June 8, 4 p.m., from Hankow. The British Ambassador, on reporting to the Foreign Office at London on the Chinese proposal, stated that he considers that the proposal comes too late and that it is not likely to be accepted by the Japanese Government. The Ambassador reported that the British Embassy made a somewhat similar suggestion last October but that it was not accepted by the Chinese Government and that the Chinese proposal, in his judgment, is the forerunner of a public statement by the Chinese Government that it will not in the future make good from its own funds quotas which should come from Japanese occupied ports. He holds that, in case of such a default, the Chinese Government would try to hold the foreign powers responsible on the grounds that they refused the proposal for international control. The Ambassador recommended that the Chinese Government be advised to permit the Anglo-Japanese Customs Agreement of May last to be implemented; that if such implementation takes place the Chinese Government would cancel it’s instructions to withhold the Japanese Boxer indemnity payments and the transfer to the Yokohama Specie Bank of part of the balances now lying in the Hong Kong and Shanghai Banks in the occupied areas; that on the other hand the Chinese Government would receive at once about $16,000,000 Chinese currency of accumulated funds and would in addition receive in future from the occupied ports their fair share of the cost of servicing foreign obligations secured on the customs.
Repeated to Hankow and Peiping.