751G.94/300: Telegram
The Consul at Hanoi (Reed) to the Secretary of State
[Received February 2—6 a.m.]
12. I discussed the general situation with the Secretary General today, a conversation which largely confirmed the information recently cabled to the Department, notably the increase of Japanese troops in Tongking (stated by him now to be about 11,000) and the inability of the Government General to obtain free movement of the transit cargo at Haiphong (whether for reexport or for consumption on the local market).
In discussing Indochina-Thailand relations he expressed the opinion that the forthcoming negotiations at Tokyo would constitute the major part if not all of Thailand’s territorial claims. In return he believed that Japan would obtain naval and air base facilities at Bangkok which would be used ultimately against the Netherlands Indies and Singapore. He felt it particularly humiliating that Indochina had been forced to accept Japanese mediation in this situation after Japan had instigated the Thailand aggression and had furnished Thailand with munitions and even personnel.
He was certain that unless something was done soon the major part of free movement of the transit cargo at Haiphong would be seized by the Japanese, referring to a note recently transmitted to the Government General by General Sumita wherein it was proposed that Indochina and Japan would share the cargo or that Japan would confiscate the whole as “spoils of war”, neither alternative envisaging compensation of the owners.
The Secretary General was extremely pessimistic, more so than at any previous occasion, and he remarked that the Japanese were in a position to assume absolute control of the country at any time. This pessimism and point of view of Japanese domination is shared by most observers in Tongking where Japanese troops and disregard of third party rights are increasingly evident.
Sent to Cavite for repetition to the Department, Chungking, Peiping, Hong Kong, Shanghai, Canton.