893.102S/2414: Telegram

The Ambassador in China (Johnson) to the Secretary of State

79. Department’s 122, February 25, 9 p.m. and Shanghai’s 186, February 13, 4 p.m.

It is my opinion that the feasibility of the establishment of the proposed commission form of government accompanied by a suspension of the land regulations would be entirely dependent on the willingness of the Chinese Government and the Japanese Government to cooperate.
Suspension of land regulations would deprive the proposed commission of any legal basis for the exercise of functions of local government.
Sir Arthur Blackburn, Chinese Counselor of the British Embassy, called on me this morning in the absence of British Ambassador who has departed for Shanghai and we discussed this matter. Blackburn stated that British members of Shanghai Municipal Council and employees had reached point where they were unwilling to carry on under present conditions, feeling that unless some steps were taken to ameliorate situation government of International Settlement would be impossible.
Neither British Embassy nor I have copies of land regulations, so we could not go into details.
I feel that land regulations should not be suspended. Blackburn agreed with this.
As regards Department’s question No. 2, Blackburn stated that he was under the impression that proposers of change do have in mind definite plans for new forms of taxation. He did not know what they were.
I believe, and Blackburn agreed, that some way should be found to reallocate membership of Council rather than the setting up of an entirely new body, thus retaining machinery long in use, and that land regulations should be amended to cover this if necessary and in addition give the Municipal Council broader powers of taxation.
I doubt whether a categorical approval of such amendments would be forthcoming from the Chinese Government at Chungking. But I am inclined to agree with Blackburn that if presented to the Chinese Government they would not object as long as amendments did not result in giving complete control to Japan.

Sent to the Department, repeated to Peiping, Shanghai.