893.102S/1872: Telegram
The Consul General at Shanghai (Gauss) to the Secretary of State
[Received September 4—10:30 a.m.]
796. With reference to reports here that the Japanese, for themselves and/or in support of their puppet regimes, may take the position that British and French forces should withdraw from Shanghai, whereupon the Japanese would expect to assume control of the administrations [Page 228] of the French Concession and International Settlement, it seems to me that while there may be a basis for asking the withdrawal of the forces of belligerent powers, it is not incompatible with the neutrality, if declared, of China, Japan, or any regime, that the local Concession and Settlement administrations should continue to function as they did in 1914 provided they do not engage in unneutral activities.
If the British and French forces withdraw—and I believe the British would probably do so while French might not—the only other foreign force except the Japanese would be the small Italian contingent and the American Marines.
If Italy enters the war the Italian contingent would presumably also be asked by the Japanese to withdraw. The American Marines would not be able to take over the sectors heretofore held by the British, French and Italians nor do I believe that such a move should be contemplated. It seems to me that all that the Marines could do would be to seek to protect American nationals by such means as might be possible.
I do not believe, however, that we should countenance or acquiesce in action by the Japanese to control or supervise the administrations of the International Settlement or the French Concession where so many Americans reside. It seems to me that we should use such influence as we can bring to bear with the Japanese to prevent this from being done.
As the situation here may develop without much notice I communicate the foregoing views and request any instructions the Department may give for my guidance.
Repeated to Chungking, Peiping and Tokyo.