The Consul General at Shanghai (Gauss) to the Secretary of State
[Received October 6—8 a.m.]
1300. British Ambassador tells me confidentially that Japanese have informed his colleague at Tokyo87 that the return of the northern districts of the International Settlement of Shanghai to control of the Municipal Council might be effected subject to two conditions:. (1) increased Japanese representation on the Settlement police and (2) replacement of the present Chinese courts in the Settlement by “impartial” courts appointed by the Ta Tao government of Shanghai.
Asked for my reaction to these conditions, I expressed the personal view that point 1 might not be particularly difficult if the Japanese request is reasonable as it has been the intention of the Municipal Council gradually to increase Japanese on the force, but as to point 2 it seemed to me that it would be difficult to acquiesce in judicial appointments [Page 139]to the courts of the Settlement by the hopelessly weak ineffective puppet government at Shanghai which has no real authority or control and that such appointments by the so-called Reformed Government at Nanking would seem equally unacceptable for the same reasons. British Ambassador responded that my reaction on point 2 is precisely the same as that of his staff advisers. As to point 1, he inquired whether we had ever considered matching Japanese demands patterned after demands for increased American representation on the police. I replied that I had several times told my Japanese colleague that he was setting a bad precedent in his demands on the Council and that he had consistently replied that the Japanese would support us in any demands equally as reasonable as the Japanese.
Repeated to Tokyo, code text by mail to Peiping.