893.102S/1647: Telegram

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

928. 1. The Hungjao Residents’ Association, an association composed of residents of all nationalities residing in Hungjao and the current [extra-] Settlement road area of Shanghai, are sponsoring a movement to extend the boundaries of the International Settlement to cover in general the area now embraced in the so-called outside roads area. This entire question has become a live issue because (1) the area is now being populated by squatters and refugees who are building shacks off of the extra-Settlement roads; (2) police protection in the areas between the roads is practically nonexistent since the disappearance of the police of the Greater Shanghai Municipal Government and the substitution of the “Tatao Government”; (3) the erection of flimsy factory buildings in the area; (4) the depositing of incoffined corpses on various vacant plots of land in the area; (5) the Japanese claim to succession to all the rights and privileges heretofore enjoyed by the Chinese Government; (6) a fear that the Japanese will attempt to exercise complete control of the entire extra-Settlement area, especially the area between the roads.

2. By reference to section 6 of the Land Regulations, copy of which is no doubt available to the Department, it would appear that the Municipal Council possesses no rights to police the outside roads nor to maintain the roads, sewerage, drainage, et cetera, nor does it possess a right to tax property abutting on the roads or to issue licenses of any sort. It appears that under a “gentlemen’s agreement” arrived at by the Secretary General of the Council and Mr. O. K. Yui, the Mayor of the former city governments of Greater Shanghai, it was understood that the Council should have the right to collect rates from occupiers of residences abutting directly on the outside roads and to police the roads. This was a temporary arrangement pending the conclusion of a definite agreement concerning the whole of the outside roads area. The advent of hostilities brought these negotiations to an end.

3. The Municipal Council fears that the time will soon arrive when an attempt will be made to interpret the Land Regulations literally, which would mean in effect the complete cessation of the very limited control exercised by the Council in the area in question. There are indications that the Japanese authorities may have in contemplation some such move. The Council [is] finding it increasingly difficult to assert its already meager authority and the situation as regards the land situated between the extra-Settlement roads is becoming intolerable [Page 133] at present in that area. There is no policing, no refuse collection, no supervision of sanitation, and filthy squatters’ huts are springing up adjoining the property of foreign residents, thus not only menacing the health of the inhabitants of that area, but also menacing indirectly the health of the whole Shanghai area.

4. The foregoing situation has been brought to my attention and to the attention of the British Consul General by the Settlement authorities with a request that it be communicated to our respective Governments with a view to the possibility of finding some solution to the situation. That solution might mean an effort to bring about the inclusion of the area within the boundaries of the International Settlement. It is scarcely necessary for me to comment on the situation that obtained in the extra-Settlement roads area up to the time of the beginning of hostilities, inasmuch as that situation is well known to the Department. The conditions that now exist urgently require remedying and while the attainment of the objective of the Hungjao residents may become necessary [and?] this would undoubtedly solve the problem, the principle involved does not seem to be in accord with the Department’s policies and I have serious doubts also that the Japanese authorities would view it with favor. I am likewise doubtful that the “Reformed Government” would acquiesce in any such proposal which the Residents’ Association might advance to it. There is a disposition in some quarters arbitrarily to extend the authority of the International Settlement to the area in question by a formal administrative act and simply notify the residents to that effect, supporting the action by an adequate police. It is probable that a unilateral act of this kind would lead to the greatest confusion and perhaps to unpleasant incidents. Inasmuch as the Municipal Council authorities will shortly seek a conference with myself and the British Consul General, I should be most grateful if the Department would give me the benefit of its views on this subject for my guidance.

Repeated to Hankow, by mail to Peiping and Tokyo.