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

No. 1861

Sir: The Department will recall that in January, last, the Japanese authorities made certain demands on the Shanghai Municipal Council for increased Japanese participation in the administration of the International Settlement at Shanghai, and particularly in the Settlement police force,* and that in March, after extended consideration and consultation, the Municipal Council undertook substantially to meet the Japanese aspirations, with the expectation, however, that “simultaneously” with the changes which the Council was prepared to make to meet the requests of the Japanese community, “the Japanese authorities should assist the return to normal conditions by taking all practicable steps to restore full Council control in the area north of the Soochow Creek at the earliest possible time”.

The Shanghai Municipal Council proceeded promptly to take the first step toward implementing the understanding of March 1938, by appointing a Japanese Government nominee as Special Deputy Commissioner of Police. The Japanese authorities, on their part, however, have done practically nothing to assist in a return to normal conditions or to restore Council control in the area north of the Soochow Creek. The Japanese, on the other hand, have sought to insist that [Page 140] the Council should proceed to give effect to further provisions of the understanding of March 1938, and more recently they have made it known that they expect benefits exceeding those contemplated in that understanding.

Several weeks ago it was proposed that the Japanese Consul General be invited to meet informally with the Chairman and executive officers of the Municipal Council and the American and British Consuls General, to discuss the unsatisfactory situation north of Soochow Creek. The Japanese Consul General, Mr. Shinrokuro Hidaka, indicated his willingness to attend such a conference but expressed the desire first to have an informal discussion with the Chairman of the Council at which he handed to the Chairman two sets of proposals, marked “A” and “B”, copies of which (sent to me by the Acting Secretary of the Council on November 5th) are enclosed88 with this despatch.

These “proposals” include the undertakings of the Council under the understanding of March 1938, and add provisions which would in effect give the Japanese substantially complete police control of the whole of the areas of the International Settlement north of Soochow Creek by providing that Japanese police officers shall be in charge of the police divisions in that area and that Japanese officers shall also be in charge of the police stations in the areas of large Japanese population. It is also proposed to set up a “joint committee” of Japanese military, naval and consular representatives and representatives of the Municipal Police “with a view to ensuring the smooth and harmonious functioning of the police” in the divisions north of the Creek.

After several delays and postponements, the proposed informal conference with the Japanese Consul General was held on Monday, December 5th.

Mr. Hidaka was accompanied by his senior staff Consul, Mr. Goto. The (American) Chairman of the Shanghai Municipal Council was supported by a British member of the Council, the (American) Secretary General of the Council, the (British) Secretary of the Council, and a (British) Deputy Secretary. The American and British Consuls General attended without staff.

The conference lasted over several hours which were devoted principally to unconvincing explanations from Mr. Hidaka on the necessity of solving the police problem in the northern areas by adopting and implementing his “proposals”, whereupon, in his opinion, the other problems of the northern areas would solve themselves more or less as a matter of course. But when asked for positive assurance that with the solution of the police problem the northern areas would be returned to normal municipal control and be thrown open to residence and trade in the same manner as other [Page 141] sections of the Settlement, Mr. Hidaka was obliged to admit that he was not in a position to give any assurance on any point. He directed attention to the anti-Japanese “terrorism” in Shanghai, to the continuing Sino-Japanese hostilities, and to the likelihood that there will for some time be large numbers of Japanese soldiers in and around Shanghai (including the northern areas of the Settlement). He made it quite evident that there is no present intention on the part of the Japanese military authorities to return the northern areas of the Settlement to Council control in the near future, notwithstanding assertions that the present situation is temporary, that the Japanese have “no ambitions” affecting the future of this part of the Settlement, and that there is an intention gradually to lift the present restrictions in the area as conditions from time to time may permit.

Mr. Hidaka offered no satisfactory reason for dividing his “proposals” into two memoranda, marked “A” and “B”; he said that he did not wish to “frighten” the Council by presenting too numerous demands in one memorandum; and that as a matter of fact “B” included items which are already being carried out but on which the Japanese feel that the efforts should be intensified. I understand from the Chairman of the Council that Mr. Hidaka intimated to him that the items of memorandum “A” are more or less mandatory on the Council, while there is not quite so much insistence upon some of the items of memorandum “B”.

Mr. Hidaka attempted to minimize any concern as to the proposed “joint committee” of Japanese military, naval and consular representatives and representatives of the Muncipal Police to ensure the “smooth and harmonious” functioning of the police in the northern areas. He pointed out that there had been conferences between these authorities in the past, when special precautions were agreed upon to be taken on Chinese anniversaries and holidays, and all that was desired was a continuance of this collaboration and cooperation. This explanation to me is unsatisfactory and unconvincing.

Mr. Hidaka attempted no real defense of the charge that the Japanese have failed to carry out their undertaking to move as rapidly as possible toward the return of the northern areas to Municipal Council control; he admitted that he could point to nothing concrete done by the Japanese to that end; he could only say that he felt that tension had been “eased” and that there existed a “better feeling”, but he went on to emphasize the necessity of reassuring the Japanese military and other authorities and the Japanese residents by measures for satisfactory (Japanese dominated) police control in the area, et cetera.

I took occasion during the discussions to state that I had been one of those who had recommended careful and sympathetic consideration of the Japanese requests made last January; that I now felt that the [Page 142] Japanese side had failed and had offered no satisfactory explanation of their failure to carry out their obligations under the March understanding; that our Japanese colleague now confronted us with additional requests to be met by the Municipal Council, and when asked to give an assurance that if these requests are met, the areas north of the Soochow Creek will be restored to normal Council control, he tells us that he is unable to give any assurance whatsoever on these points. I pointed out that this represented a most unsatisfactory state of affairs; that emphasis has been placed by the Japanese side on the necessity of reassuring the Japanese military and the Japanese residents, but that there is no evidence of a disposition on the Japanese side to give consideration to the rights and interests of other foreign nationalities; and as indicating the unsatisfactory situation with respect of foreign interests I pointed to the conditions in the foreign extra-Settlement residential areas to the west of Shanghai where Japanese gendarmes are commanding and augmenting the Chinese police forces of the new Japanese sponsored local regime, and where gambling hells, opium dens, and narcotic vendors are permitted to flourish in large numbers. I urged that the Japanese give proper consideration to both foreign and Japanese interests in the solution of local problems.

The conference adjourned following a statement of the Chairman of the Council that the matter would be studied by the Council.

On the morning of December 7th, the Chairman of the Council told me that the American and British members of the Council had met and thoroughly examined the situation, reaching the conclusion that it will be necessary for the Council to make further concessions to the Japanese and to hope that when the police are finally reestablished in control of the northern areas it may be possible to extend the municipal control gradually and finally restore the areas to normal. To this end, it is proposed that he call on the Japanese Consul General and offer him a compromise proposal suggested by the Commissioner of Police (in a report, of which a copy is enclosed89) that a special division to be known as “E” division be established in the northern section of the Hongkew area (the principal area of Japanese residence), that a carefully selected Japanese police officer be placed in charge of that division, that a Japanese associate divisional officer be provided to function for divisions “C” and “D”, and that an understanding be reached rejecting certain possible Japanese candidates for the appointment. In short, the Council will offer some further concessions to the Japanese and proceed to implement the understanding fully, hoping thus to restore the police to control in the northern areas, with the thought that thereafter they may gradually induce [Page 143] the Japanese to discard present restrictions, such as the system under which permits and passes must be obtained for all movement of foreign cargo out of that area, for all Chinese entering the area, including even chauffeurs and employees of foreigners, et cetera. It is hoped that it may be possible eventually to restore the street car and bus services and permit the return of Chinese to the areas for residence without undue restrictions.

I am particularly interested to note that the British members of the Council, who but a few weeks ago were insistent that the Japanese must be faced with a firm refusal to make any concessions until the whole northern areas are returned to full and complete municipal control, have now been prevailed upon by the British Consul General to take a decidedly more conciliatory attitude.

I regret to say that I do not expect this changed attitude toward the Japanese to be productive of any satisfactory results at this time.

I shall keep the Department informed of developments.

Respectfully yours,

C. E. Gauss
  1. Despatch No. 1441 [1141], January 10, 1938. [Footnote in the original; despatch not printed.]
  2. Despatch No. 1290, March 21; No. 1350, April 11; No. 1355, April 12, 1938. [Footnote in the original; despatches Nos. 1290 and 1350 not printed.]
  3. Despatch No. 1765, October 20, 1938. [Footnote in the original; despatch not printed.]
  4. Neither printed.
  5. Not printed.