Office of the Historian

893.102 Tientsin/325: Telegram

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

Tokyo, June 30, 1939—4 p.m.
[Received June 30—9:12 a.m.]

306. Our 304, June 29, 6 p.m.

1.
With every new development in the Tientsin situation further reasons present themselves for believing that there is shaping up a state of affairs which is likely to raise problems of major proportions. The Japanese press, far from indicating relief that a way has been taken to settle a nasty local situation which might irreparably injure relations with Great Britain, sees in the forthcoming conference in Tokyo an opportunity which must be seized to bring about a complete revision of British attitude and policy toward Japan and China. Although the Japanese and British Governments have agreed that basis of negotiations shall be to seek settlement of the local situation and of problems arising immediately therefrom, and although the British Ambassador does not intend to discuss general principle of British policy, it is my opinion the Japanese will not only raise the currency and other fiscal issues but press at least for British recognition of Japan’s de facto position in North China.
2.
Conditions in Europe being what they are, the British here have indicated to me that they fear danger of seizure by the Japanese of the Concession if the negotiations break down and that they do not think that Great Britain would be in a position to resist. I do not believe, nor does the British Ambassador, that a settlement of the local situation is possible without settlement also of the fiscal issues. On the other hand the British are worried lest any compromise reached with the Japanese on wider issues be regarded in the United States as “another Munich Agreement” (these are Sir Robert’s own words to me) the consequent adverse repercussions there adversely affecting American attitude toward British policy and attitude in Europe.
3.
The British have I think only themselves to thank for allowing the Japanese achievements to bring matters to a head but nevertheless they are now in a serious predicament. They realize quite clearly now, as they apparently did not before, that they must risk either definite showdown with the Japanese or alienating American good will. My opinion is that they will try to avoid both by going as far as they can to meet the Japanese without laying themselves open to the charge of another appeasement effort. They could for example modify their attitude with regard to federated reserve currency insofar as that attitude is dictated by desire to obstruct the successful establishment of that currency (as contrasted with practical reasons such as the [Page 209] natural desire of traders to deal in another currency convertible into foreign currencies).
4.
I do not believe that they have adequate conception of the quagmire into which such attempts at compromise will lead them.
Dooman