893.102S/1754: Telegram

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

171. Reference my No. 168, March 1, 2 p.m. Japanese Consul General accompanied by naval and military officers called on Chairman of the Council this noon and asked him to sign immediately the memorandum of “understandings” quoted in paragraph 2 of my telegram No. 168. The Chairman pointed out that the memorandum was only received by him on the afternoon of February 28, that it goes beyond the recent correspondence and also refers back to the [Page 13] Hidaka letters, and that the Council cannot ignore the interest and views of the Treaty Power Consuls in matters affecting the Settlement. Japanese Consul General replied that an agreement with Hidaka had been reached in principle; that the only point at issue was a suitable time for carrying out the agreement; and that in view of the existing situation he considered that it should be carried out forthwith. He pressed for a reply by Friday morning and stressed the desirability of the reply being to the memorandum as a whole as he regarded it as most undesirable that matters should be allowed to drag on and added that while negotiations were continuing there might be a reversal of the same which he did not say would but which might lead to some form of action.

It appears to me that the Japanese are seeking to force the Council to accept distorted understanding of the recent correspondence and to agree immediately to the Hidaka proposals. As to the Hidaka proposals, the situation as I understand it is substantially as reported in my despatch No. 1861 of December 8th last.20 Conversations have continued since that date but so far as I am aware no final agreement has been reached.
Members of the Council are meeting this evening to consider the new Japanese démarche and I am informed that thereafter they will consult my British colleague and me. I am of the opinion, and my British colleague at present holds the same view, that it is now time for the Council to report the matter fully to the Treaty Power Consuls. While these Consuls probably cannot take action unanimously, the Italian Consul General likely being aligned with the Japanese, it seems to me that it should be possible for most of the Treaty Power Consuls to take a position conforming in general to the views set forth by the Department in its telegram to me No. 28 of January 11, 6 p.m., 1938.21

Repeated to Tokyo, Chungking, and Peiping.