893.61331/288: Telegram

The Counselor of Embassy in China (Butrick) to the Secretary of State

205. The draft memorandum transmitted in my 204, August 5, 11 a.m.11 will be unsigned by either party but will govern the activities of the mentioned subsidiaries of the British-American Tobacco Company. It was given me by the director participating in yesterday’s negotiations with the Japanese officials of the China Affairs Board. Noteworthy details related to me by the director are (1) he was ordered by the Japanese to come to Peiping from Tientsin on very short notice, (2) he was told during negotiations that, if the companies did not accept the terms, other provisions would be made for operating their business, (3) he was informed that the companies could take all the American money out of the country which they could get as the Japanese no longer had any interest in American money, (4) he was ordered to go by plane to Shanghai today to consult his fellow [workers?] for their opinion; remain there 2 days and return the following day by plane to Peiping, (5) he was treated civilly but it was made clear to him that there would be little if any negotiating and that it was a “take it or leave it” proposition, which had the approval of the Board, the Japanese Army and the Japanese Embassy, however the director feels that paragraph number 6 of the memorandum is to prevent sabotage of plants in case of war and that the terms practically give complete control of [company?] to Japanese who likewise will gain complete knowledge of business in a comparatively short time [by?] persons [who are?] titled advisers.

Sent to the Department, repeated to Chungking, Shanghai; code text by air mail to Tokyo, Tientsin, Tsingtao.

  1. Not printed.