The Consul General at Shanghai (Gauss) to the Secretary of State
[Received April 7—5 p.m.]
511. Reference my 425, March 19, 8  p.m. Japanese Consul General yesterday handed Chairman of Municipal Council letter acknowledging receipt of Council’s memorandum, expressing appreciation of careful consideration of the Japanese requests, but regretting that the Council could not accede to some of the proposals and expressing the hope that the Council will consider their position and meet the Japanese desires fully when the present tense situation is mitigated and the financial condition of the Council is improved. He then asked for the full implementing of the memorandum on the side of the Council but was not very satisfactory in his response to the inquiries of the Chairman as to the intention of the Japanese to move simultaneously to restore full Council control in the areas north of the Creek although he did say he intended to work for material and steady amelioration of conditions.
I understand that as evidence of their good faith authorities of the Council propose to proceed to appoint the special Deputy Commissioner of Police nominated by the Japanese and then await indications of good faith on the Japanese side before proceeding further.
Repeated to Hankow, Peiping and Tokyo.