The Consul General at Shanghai ( Gauss ) to the Secretary of State
[Received February 24—10:30 a.m.]
143. 1. I submit for the information of the Department a summary of Admiral Yarnell’s10 comments on the Japanese demands as set forth in two letters addressed to me under date of February 23.
2. He expresses the belief, in the light of the publicity given in the Japanese press to recent assassinations in the Settlement and the demands made upon the Council, that these developments are “all part of a prearranged plan for the eventual taking over of the Settlement”, and points out that the task of the Japanese will be rendered easier if by constant pressure they succeed in undermining the authority of [Page 5] the Council. The Admiral expresses the view that by giving way to Japanese demands immediate situations may be solved temporarily but calls attention to the fact that mixed control in the Settlement especially with reference to police matters will undoubtedly result in difficult and possibly dangerous situations and further demands. The other course for the Council to pursue in the opinion of the Admiral is to stand firmly on its rights and resist any encroachments.
3. With specific reference to the demands made by the Japanese, Admiral Yarnell states with respect to the first, “in my opinion this should never have been done and should not be done in the future”. The second demand the Admiral states should not be approved because it would bring about an impossible situation with probable clashes between the present defense forces and the Japanese and adds “I have given orders to Colonel Fegan11 that in case of a conference with the Japanese which I understand they have requested with him, to inform them that any such arrangement cannot be approved.” With reference to the third demand the Admiral believes this to mean that the Japanese desire to station parties along the bund for the purpose of searching Chinese who enter or leave the Settlement and that it should not be approved. The Admiral states further that since the Consular Body and the defense commanders are interested in the matter, he recommends that the Council’s reply should receive their approval before being sent to the Japanese. He concludes “as far as the American defense sector is concerned there cannot be any division of authority or two independent bodies responsible for the maintenance of order. Either the commander of the Fourth Marines must have full authority or this force must be withdrawn entirely”.
Repeated to Chungking, Peiping and Tokyo.