The Secretary of State to the Consul General at Shanghai (Gauss)
28. Reference your 15, January 5, 9 a.m., and 47, January 9, 6 p.m., in regard to International Settlement. In addition to the issues of a general character raised by the Japanese memoranda summarized and discussed in your telegrams, the specific requests made by the Japanese immediately suggest (a) that the questions raised concern the administrative functions of the Municipal Council in which field the Council exercises a large measure of independence of action in relation to the Treaty Powers; (b) that the Department has no direct intimation of the attitude and desires of the Municipal Council in the matter; and (c) that the large British interests at Shanghai would seem to render it appropriate that the initiative in any diplomatic or consular action which may be requested by the Council should rest with the British authorities.
With the foregoing in mind the Department offers for your consideration the following broad views in the hope that they may prove helpful to you in your consideration of the situation with which the Municipal Council is confronted.
The Department is of the opinion that the Council and the Consular Body should insist upon respect for their responsibilities and functions with regard to the administration of the International Settlement. Attempts by the Japanese to interfere with or encroach upon the administrative functions of the Council should be opposed by the Council, and by the Consular Body if its assistance is requested. Under present circumstances, however, it would seem reasonable as well as expedient to exercise the utmost caution and to take appropriate measures to the end that the Settlement not become a center for subversive activities, including, of course, activities of an anti-Japanese character. With regard to increased Japanese participation and authority in the administration and policing of the Settlement, it is felt that practical considerations point to the advisability of meeting in due course and in an orderly way reasonable Japanese desires in so far as practicable. There would seem to be some reason for hoping that increased Japanese participation in the administration and policing of the Settlement might have the desirable effect of causing the Japanese to feel a greater responsibility for the preservation of the integrity of the Settlement without seriously disturbing present administrative machinery and control.
In general, the Department feels that the foreign governments which have common interests and a common concern regarding the status and condition of the International Settlement and their official representatives and the authorities of the Municipal Administration [Page 120]should take the position, and should make use of the principle, in discussions of this matter with Japanese officialdom, that questions relating to the International Settlement, especially proposals for changes in the composition of the municipal staff and in administrative practices, etc., should be dealt with on the basis of law, treaty rights, and considerations of justice and efficiency, rather than on a basis of the wishes of any one power supported by military force and pleading considerations of military necessity. It can reasonably be pointed out that the Japanese have repeatedly affirmed it their intention to respect the rights and interests of other powers, that neither the Chinese authorities nor any foreign governments have relinquished or waived in Japan’s favor any of their rights and obligations in law or by treaty, and that the whole situation at Shanghai is one of continuing and important concern to all powers which have contacts with and interests in China and in trade with China.
The Department is thoroughly in accord with the points made by you in your conversation with the Japanese Consul General, as reported in paragraphs 1 and 2 of your telegram No. 47, and is also in accord with the views expressed in paragraph 3 thereof.
The Department desires that you consult with your British colleague and endeavor to ascertain for communication to the Department the British attitude in regard to the situation.
Please repeat the foregoing telegram and your telegrams under reference to the Embassy, Tokyo, for its information only. Also please repeat this telegram to the Ambassador at Hankow.