893.102S/1621

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

No. 1234

Sir: With reference to my despatch No. 1199 of February 5, 1938, in regard to the Japanese demands on the Shanghai Municipal Council, I have the honor to enclose for the information of the Department:

Copy of a letter dated February 4, 1938,67 addressed informally by the Secretary of the Shanghai Municipal Council to the Senior Consul, [Page 127]setting forth the views of the American and British members of the Council on the Japanese demands.

On Monday, February 14th, the Senior Consul invited the American, British and French Consuls General, the (American) Chairman of the Municipal Council, and the (American) Secretary General and (British) Secretary of the Council to meet with him informally to discuss the matter.

At that meeting, the British Consul General stated that he was prepared to accept the recommendations of the American and British members of the Council as set out in the enclosure to this despatch, emphasizing point (1), that is, that no changes or concessions should be made until full Council control is restored in that part of the Settlement which lies north of the Soochow Creek and which is now under Japanese military occupation.

I stated that I found myself in accord with the proposals of the American and British members of the Council, but that I did not believe that they would be found by the Japanese reasonably to meet their wishes and that I thought that it might be necessary to consider further their demand for a Japanese secretary.

The British Consul General—who had referred the matter to London—stated that, for the time being, he is not prepared to agree to more than is offered in the recommendations of the American and British members of the Council, and he again stressed the necessity for the return of the area north of the Soochow Creek to the control and administration of the Council as a condition precedent to any concessions.

I informed my colleague that in several conversations with the Japanese Consul General I had urged upon him the necessity of restoring the areas north of the Soochow Creek to the full control and administration of the Council, pointing out that he could not reasonably expect favorable consideration of any Japanese requests until this had been done. I proposed that the recommendations of the American and British members of the Council should be submitted for the consideration of the full Council and then presented for the information and consideration of all the interested consular representatives (the Treaty Consuls; excepting of course the Japanese). If they find general support, then they may be made the basis of a memorandum to be handed to the Japanese Consul General by the Chairman of the Council. This procedure was generally acceptable.

Meanwhile, as an indication of the difficulties confronting the Council in dealing with the areas of the International Settlement north of the Soochow Creek now under Japanese occupation, I enclose: [Page 128]

Copy of a report69 from the Secretary of the Council to the American and British members of the Council dated February 4, 1938, in reference to the arrangements for the return of Chinese to the areas north of the Creek and the desire of the Council to restore Chinese police to that area under supervision of the regular (foreign) police officers.

It will be noted from this report that the Japanese authorities were willing to allow Chinese members of the police force to be sent to the areas north of the Creek only if they were placed under the supervision of the Japanese branch of the Police. The Municipal authorities were unable to agree to this attempt to extend the authority of the Japanese branch of the police in the areas north of the Creek. The Japanese branch of the police has assumed a more or less independent attitude, placing itself under the influence, if not direction, of the Japanese military and naval authorities. The matter continues under discussion, but meanwhile the Japanese have arranged to allow a limited number of Chinese civilians to enter the areas under passes issued after the submission of applications through a Shanghai Citizens Association—an organization of uncertain responsibility recently set up by the Japanese military authorities, the personnel of which is not publicly well known. This action has drawn a protest from the Chairman of the Council to the Senior Consul, a copy of which is enclosed.69 This protest was laid before the full meeting of the Consular Body on February 15th, when the Japanese Consul General was present, and was referred to him for an explanation which he has promised to give.

It will be seen from the foregoing that the whole matter of the Japanese demands is being approached with considerable caution, difficulty and delay. It is the hope that the Japanese finally may be brought to a realization that they must fully restore the Council’s control and administration in the northern districts before they can expect any concessions from the Council.

I believe that for the time being the Japanese will suspend their efforts to obtain increased Japanese representation on the Council itself, it being realized that they do not have sufficient voting strength to force the issue at a municipal election. I am inclined to the opinion that after a new Chinese Government is set up, the Japanese will move for a revision of the Land Regulations so as to provide in that manner for increased Japanese representation.

Respectfully yours,

C. E. Gauss
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