The Consul General at Shanghai (Gauss) to the Secretary of State

No. 1199

Sir: I have the honor to refer to my despatches, No. 1141 of January 10, and No. 1149 of January 13, 1938,65 on the subject of the Japanese demands on the Shanghai Municipal Council, and to submit the following:66

Copy of a report to the Council by the Secretary, dated January 21, 1938.
Copy of report and recommendations of the Commissioner of Police, dated January 24, 1938.

These reports represent the views of the Secretariat and the Police Department of the Council on the Japanese demands for increased Japanese representation and participation in the administration of the International Settlement.

There has as yet been no full meeting of the Council to consider the Japanese demands. It is my understanding, however, that the British and American members of the Council are now more or less of the same opinion in regard to them, and that they are prepared to consider the Japanese requests on their merits and to make some gradual and reasonable provision for increased Japanese participation [Page 124] in the Settlement administration, provided the Japanese on their part will take measures to improve relations with the Settlement administration, restore the areas north of the Soochow Creek to normal control of the Settlement police and other authorities and take a reasonable view of the whole situation.

There is some disposition to delay consideration of the Japanese proposals in order that the effect of the public “demands” of the Japanese Consul General, supported by his military and naval associates, may first be dissipated.

The Chairman of the Council tells me that some days ago he asked the Japanese Consul General whether the latter could recommend a thoroughly qualified Japanese police officer of experience, with a good knowledge of English, who might be considered for appointment to the police department, to act in liaison with the Commissioner and with the heads of all divisions in reference particularly to Japanese affairs. The Japanese Consul General undertook to make inquiry at Tokyo and to inform the Chairman of the result. He has not yet done so, and any complaint of delay in action on the part of the Council may naturally be ascribed to that situation.

The report of the Secretary of the Council in reference to the desire of the Japanese for more senior representation in the Secretariat makes no recommendation for the appointment of a Japanese Associate or Co-Secretary; but I understand that if it becomes necessary or desirable, resort may be had to some such arrangement.

The report of the Commissioner of Police, which must be examined in conjunction with enclosure 5 of my despatch No. 1141, of January 10, 1938, indicates that it may be possible to make some reasonable adjustment to meet the Japanese in respect of police matters; and this report taken along with the interest of the Chairman in finding a thoroughly experienced and qualified senior Japanese police officer with a good knowledge of English, may offer a solution of the problem so far as it relates to the police administration.

I have had several friendly discussions with my Japanese colleague, Consul General Suemasa Okamoto, on the subject of the Japanese relations with the Council, and have told him frankly that I strongly deprecated any attempt to obtain increased Japanese participation in the Settlement administration by way of “demands” supported by his military and naval forces. I pointed out that such measures would alienate foreign opinion favorable to intelligent and just consideration of Japanese aspirations, and that he would find no one willing to make any adjustments in the face of any such “demands”. I also emphasized that there must be a substantial improvement in the relations between the Japanese forces and the Settlement administration, and that while the Japanese are seeking greater representation in the [Page 125] Settlement administration they must respect the authority and jurisdiction of that administration and move promptly to restore the areas north of the Soochow Creek to the normal control and administration of the Settlement police and other authorities.

In one of my conversations with Mr. Okamoto, he mentioned to me that the Japanese community is desirous not only of increased participation in the Settlement administration; it desires also increased representation on the Council. He stated that his community desires representation equal to the British, who now have five members of British nationality on the Council. He inquired whether the Americans would be disposed to reduce their representation from two to one, if the British would reduce their representation from five to four, so as to permit of an increase in the Japanese representation from two to four and thus make Japanese representation equal to the British.

I told Mr. Okamoto bluntly that I could not follow him in any suggestion that the Americans should give up one of their two seats on the Municipal Council to a Japanese or to any other nationality, and that even if I were so generous as to agree to such a proposal I was certain that the American ratepayers would not do so, so that it was quite useless to consider the matter.

The opportunity presented itself to remind Mr. Okamoto that the Council is elected by the foreign ratepayers of the Settlement, that the franchise belongs to these ratepayers under the Land Regulations, that the franchise is dependent upon the payment of taxes and rates to the Council, that in the past I had ascertained that the Japanese paid only about 7 per cent of the rates and taxes, that the present status of the Japanese community in its relation to financial support of the Settlement administration has not been disclosed, but that he must realize that the election of members of the Council is dependent upon the votes of the ratepayers and if he expects to have any Japanese members elected his community should see to it that the Japanese residents pay their taxes and acquire the right of franchise.

Mr. Okamoto mentioned to me that a suggestion had been made to him by a British friend that there should be a revision of the Land Regulations and that definite provision should be made therein for a truly international Council to consist of three Americans, three Britons, three Japanese, and three other foreign nationals—German, Italian and Scandinavian. I commented that this was an interesting proposal but that he must realize that it would necessitate a revision of the Land Regulations and such a revision is not possible at this time. I do not know whether the Japanese will pursue the matter of increased representation on the Council at present. The elections are due to be held early in April. The American Community Committee has renominated the present American members of the Council, [Page 126] Mr. Cornell S. Franklin (Chairman of the Council) and Mr. W. H. Plant. I understand there are to be some changes in the British members of the Council, but they have not yet been made known. My British colleague tells me that the Japanese Consul General mentioned to him the desire to obtain more seats on the Council for Japanese, at the expense of British representation, but the British Consul General was apparently unwilling to consider the suggestion. I know however that a year or more ago my then British colleague, Sir John Brenan, had under consideration a recommendation to the British Foreign Office that the British community agree to reduce their representation on the Council and thus provide an additional seat for a Japanese (who would need to be supported by British votes to be elected), but I understand that the British fear that the Japanese and Chinese members may at any time form an “Asiatic bloc” in Settlement matters. The present Council consists of five British, two American and two Japanese (a total of nine foreign members) and five Chinese. If the British were to reduce their representation to four, the combined American-British vote would be six against a possible combined Japanese-Chinese vote of eight. There is some feeling that the Japanese may bring pressure to bear to determine what five Chinese shall become members of the Council. The Chinese members of the Council are elected by the Chinese Ratepayers Association.

Unless there is direct interference by the Japanese military in the Settlement administration, I hope that the American and British members of the Council by a wise discretion and careful approach to the subject can bring about improved relations with the Japanese and, considering the Japanese desires on their merits, make provision for some reasonable and gradual increase in Japanese participation in the Settlement administration.

Respectfully yours,

C. E. Gauss
  1. Neither printed.
  2. Enclosures not printed.