793.94112/300
The British Embassy to the Department of State
Aide-Mémoire
On December 18th the Vice Minister for Foreign Affairs in Tokyo made a communication to His Majesty’s Ambassador to the effect that the Japanese authorities had decided to make preparations with a view to the lifting of the ban on the navigation of the Yangtze from Nanking downwards, subject to certain restrictions necessary for the maintenance of peace and order and for military operations. It is understood that a similar communication was made simultaneously to the United States Ambassador.
[Page 798]Mr. Tani informed Sir Robert Craigie that this declaration was Japan’s answer to those who maintained that her purpose was one of economic monopolization in China. As long as hostilities continued some restrictions on trade were inevitable but the moment was now coming when a period of reconstruction could begin and the first step was to get trade going again on the lower Yangtze.
In reply to Sir Robert Craigie’s enquiry Mr. Tani said that the date on which navigation could be resumed depended on two factors: (a) the making of arrangements for handing over of hulks, etc., hitherto occupied for defence purposes; (b) the negotiation of international arrangements governing this resumption of navigation. In confidence he stated that the date by which the Japanese Government hoped that all arrangements would be concluded was some time in February.
As regards (b) the Vice Minister for Foreign Affairs considered that discussions would have to take place primarily with His Majesty’s Government as Great Britain having the largest interests on the Yangtze was closely affected. This discussion would be concerned with the following five points:
- 1.
- Military Regulations, mainly concerned with safeguards against transport of munitions to enemy forces.
- 2.
- Customs House arrangements.
- 3.
- Arrangements between shipping interests (a pooling arrangement was contemplated under which dividends would be guaranteed to all thus avoiding unfair advantage being taken of Japan’s present inability to participate fully in this trade).
- 4.
- Precautions against profits made by Chinese out of resumption of this trade being used for purchase of munitions by the Chinese National Government.
- 5.
- Currency arrangements (designed primarily to ensure that the enhanced value of Fapi, likely to result from reopening of Yangtze, should not prejudice Japan’s present method of meeting her local expenditure in military yen).
Mr. Tani added that it was proposed to apply the same measures mutatis mutandis to Pearl River.
The Vice Minister for Foreign Affairs added, in answer to Sir Robert Craigie’s enquiry, that the above arrangements were intended to be purely transitory and were quite independent of the emergence of a new central government for China. It was obvious that in the early stages special precautions would be necessary in order to convince the army that the lower Yangtze could be reopened to trade without serious loss of military efficiency; but once trade had started moving and present apprehensions had been shown to be unfounded the restrictions would be progressively reduced.
In informing the State Department of the foregoing communication from the Japanese Government His Majesty’s Embassy is instructed to explain that while His Majesty’s Government in the United [Page 799] Kingdom welcome the announcement that the ban on navigation on the Yangtze is to be relaxed, they are disinclined to undertake discussions with the Japanese Government on a matter which concerns other Powers besides themselves or to allow such discussions to be enlarged into the negotiation of any formal agreement. His Majesty’s Government would be glad to know whether the Japanese Government have proposed similar discussions with the United States Government and if so what attitude the latter propose to adopt. His Majesty’s Government for their part feel that the suggested conversations should be capable of being restricted to the necessary practical arrangements for the preparation of the resumption of navigation.