893.515/1409: Telegram

The Chargé in Japan (Dooman) to the Secretary of State

382. Department’s 233, July 31, 8 p.m.

1.
I called on the British Ambassador this morning and after allowing him to read the telegram under reference explained in detail what I had done toward making clear to the Japanese Government the concern of the United States in the broader aspects of the Tientsin situation.
2.
The British Ambassador reviewed at some [length] the negotiations which are taking place with the Japanese. He said that the various police questions might for all practical purposes be regarded as settled, although no agreement has as yet been reached on the question whether a small number of Japanese gendarme[s] who are to assist in the control of Chinese within the British Concession should be permitted to stay within the British Concession. Craigie’s feeling was that this matter was not of any great importance and that he would have no great objection to accepting the Japanese position in this regard.
3.
He said that a deadlock had been reached in regard to the silver and the currency questions and he expressed himself as being extremely depressed and pessimistic over the outlook. He had studied carefully the question of the ownership of the silver now kept in British Concession and he was not at all certain that the Chinese Government had a clear title to it. This silver, he said, had been kept [Page 439] in North China by the local banks notwithstanding the order of the Chinese Government issued at the time of the reorganization of the Chinese currency calling for the silver to serve as currency reserve. He gathered that there had always been strong objection in North China to placing the [silver] now in Tientsin in possession of the Chinese Government. In spite of the British considerations, however, he did not see how he could agree to the turning over of the silver nominally to the North China authorities without causing strong resentment in Chungking. He had put forward to London a suggestion for the disposal of the silver in some manner which would be satisfactory to the Japanese without actually giving them possession of it, but he doubted whether his Government would approve of the plan. With regard to the Japanese demand that Fapi be prohibited in the British Concession, he saw no possibility whatever of a compromise. He had explained to the Japanese that to prohibit dealing in Fapi in the Concession would raise important political issues and the Japanese had modified their demand to the extent of proposing that only the Chinese within the Concession be prohibited from dealing in Fapi. He did not intend to accept this modified proposal.
4.
Sir Robert went on to say that he is now marking time and waiting for the American Government to take some definite action along the lines taken yesterday by the French Ambassador who informed the Foreign Minister that the French Government would not recognize any arrangement affecting currency and silver effected between the British and the Japanese without the consent of the French Government. What I had already done and what I was instructed to continue to do was useful so far as it went but he wondered whether I could not make to the Foreign Office a statement similar to that made by the French Ambassador. I replied that in my opinion the instructions which I had were sufficiently broad to permit me to say to the Japanese Government that if the Japanese and British Governments were to agree to deny to American citizens in North China the legal currency of the Chinese Government there would be raised questions of direct concern and interest to the American Government but that I did not see how I could make to the Japanese Government any statement committing the American Government to a certain position without specific authorization. Sir Robert agreed but expressed the hope that I would telegraph the Department and ask for such authorization. This I do but without recommendation either way.
5.
I am arranging to see the Vice Minister for Foreign Affairs tomorrow afternoon and I propose to make clear to him our concern in the broader problems which are being discussed between the British and the Japanese and in the course of the interview I shall say that denial to American citizens of Fapi especially would be regarded in the United States as a serious matter. The receipt, prior to the [Page 440] forthcoming interview, of the authorization requested in the preceding paragraph would be appreciated.

Repeated to Peiping for relay to Chungking and Tientsin.

Dooman