Memorandum of Conversation, by Mr. Walter Adams of the Division of Far Eastern Affairs

Participants: Count de Saint-Quentin, the French Ambassador,
Mr. Hamilton
Mr. Adams

The French Ambassador called at his request. He outlined the French position toward the British-Japanese arrangement in regard to the Chinese Maritime Customs. He said that when the arrangement was being negotiated the British authorities had suggested that, as the American Government was not making an approach to the Japanese authorities in regard thereto, it would perhaps be preferable if the French also refrained from making an approach. He said that the French had therefore not made an approach to the Japanese at that time.

The French Ambassador said that, in connection with present British efforts to obtain implementation of the arrangement, the British had approached the French with the suggestion that the French ask the Chinese Government to assent to implementation of the arrangement. The French Ambassador said that the British had already made representations to the Chinese Government to that effect. He said that inasmuch as the French Government had taken no diplomatic action in support of the British-Japanese customs arrangements, the French Government had not considered it appropriate that it should approach the Chinese Government on this subject but that the French Government had, in the light of the Chinese Government’s recent announcement of suspension of debt service, expressed to the Chinese Government concern at this action of the Chinese Government. The Ambassador said that in this way the French had indirectly supported the British action. The Ambassador wondered whether we had considered the question of giving similar indirect support to the British by making representations to the Chinese Government.

In reply Mr. Hamilton indicated that, while the matter had not been discussed with the higher authorities, the feeling in FE52 was that, in view of all the attendant circumstances, an approach to the Chinese Government was not called for; that the action of the Chinese Government in suspending the servicing of its foreign obligations appeared to be not unreasonable; and that a reservation was not necessary in order to protect the American interests involved. With regard to the British-Japanese customs arrangement Mr. Hamilton said that the American authorities had consistently declined to urge upon the [Page 817]Chinese or Japanese Governments any particular plan for the servicing of obligations in which we were interested but that we reserved the right to object to any plan that might in our opinion prejudice our interests. He added that the American authorities took the position that they would expect any agency inflicting damage upon American interests to be responsible for the consequences of its acts.

The French Ambassador inquired whether we perceived objection to the British-Japanese customs arrangement. Mr. Adams and Mr. Hamilton pointed out that the chief difficulty and problem involved in that arrangement seemed to us to be the question of foreign exchange, namely, would the Japanese-controlled areas furnish their share of the foreign exchange or would the Chinese Government be expected to furnish all foreign exchange.

The French Ambassador, just before his departure, asked whether the State Department had any information in regard to the reported occupation of the Island of Hainan by Japanese forces. Mr. Hamilton replied that a report had been received from Tokyo53 that a Japanese announcement had been published reporting the occupation of the island by Japanese forces but that we had no details in regard to the matter.

  1. The Division of Far Eastern Affairs.
  2. See telegram No. 83, February 10, 5 p.m., p. 103.