893.102S/2429: Telegram

The Consul General at Shanghai ( Lockhart ) to the Secretary of State

314. Department’s 154, March 8, 3 p.m.

1. I have discussed with the American members of Municipal Council and with my British and Japanese colleagues matter of reapportionment of representation on Council or Commission. The Japanese object to the 3, 3, 3, 3 ratio and I see at present no prospect of persuading them to accept. Various ratios have been advanced by the Japanese, but always with control on their side if the Chinese and/or Germans are to be counted as favorable to them. The British contemplate making the following counter-proposal, 4 British, 4 Japanese, 4 Chinese, 3 Americans, 1 German and 2 neutrals, 18 in all. Both American members of Council suggest that Americans should now attempt to obtain an agreement on basis of 4, 4, 4, 4 with a German [and a] neutral, totaling 18. This, of course, would require suspension of the land regulations in part inasmuch as it is an excess of 4 over the present limit of 14 and it is 1 less Chinese than is provided for in the regulations. My Japanese colleague states that the ratio approved by the Japanese Government, and which he describes as final, is 3 British, 3 Japanese, 2 Americans, 4 Chinese, 1 German and 2 neutrals, 15 in all. I believe that majority of representatives of British and American viewpoint will not be agreeable to this ratio. It did not appear feasible to approach the Chinese regarding a reduction in their representation until the British, Japanese and Americans had united. Japanese military strongly objected to reduction of Chinese membership but finally consented to reduction on urgent representation by Consul General but they insist on 4 Chinese.

2. The British leaders in the movement for a reorganization are extremely anxious to bring about a situation by which the holding of ratepayers’ meetings will no longer be necessary. They feel that the present system of voting, i. e. by individual ratepayers and plural voting by lot splitting, in such meetings is conducive to bad feeling and may lead to disturbances. To obviate this danger they wish to suspend that part of the land regulations relating to the holding of ratepayers’ meetings, as well as that by which the members of the Council are elected by ballot. The election of members of the Council is on the same basis as that for voting at ratepayers’ meetings. My Japanese colleague also voices his belief that an election and holding of ratepayers’ meetings may lead to disturbances from disgruntled elements.

3. While my British colleague appreciates reason for working within the framework of the land regulations, a temporary modification [Page 836] in order to carry out objects of plan must embrace not only clauses relating to elections, but also those relating to ratepayers’ meetings. He also considers that there are sound arguments in favor of temporary replacement of the Council and the body of ratepayers under the land regulations otherwise nominated on a totally different basis in preference to retaining the Council and altering the basis of the election even though such modification was understood to be temporary.

It is suggested that the commission should simply be empowered to levy such rates and taxes as may be found reasonable and necessary for municipal purposes. There is no thought of completely and permanently abolishing the land regulations.

4. While sympathetic with the British desire to see an extremely unsatisfactory and even dangerous condition of affairs ameliorated, I have from the beginning felt that the time is too short before the election (April 2 and 3) to make it possible to work out a solution satisfactory to all concerned. If such cannot be done, we shall try but with little prospect of success, I fear, to effect an arrangement by which the present national ratio, i. e. 5 British, 5 Chinese, 2 Americans and 1 Japanese, is maintained by a “gentlemen’s agreement” to nominate for the forthcoming election the number of council-men mentioned next above from each nationality, thus avoiding an election, the understanding being that the members will resign as soon as the machinery can be put in motion after the election to bring about the substitution of a “commission” for the newly elected Buyers [Ratepayers] Council. Such a plan, as would probably be the case with any other plan, has obvious drawbacks, but the exigencies are such that a change seems inevitable and it is narrowing itself down to the choosing of the lesser of several evils. My Japanese colleague stated that such a plan might be acceptable provided a definite agreement could not be reached in advance of the election on the question of the ratio of national representation on the Commission. This, it now seems, will be impossible unless the Japanese can be persuaded to grant at least equal representation on the basis of Japanese, Chinese and German on the one side and British, American and Russian [neutral?] on the other. I fear, however, that the matter will reach an impasse due to the unyielding attitude of the Japanese. My Japanese colleague strongly deprecates what he describes as lines drawn by the British (and Americans, I infer) and I said that so far as the Americans are concerned we are interested only in the maintenance of a balanced Council, or commission, and that the reputations [preservation of law and order?] in the Settlement was of prime consideration. My Japanese colleague repeatedly emphasized that there was no justification for the apparent belief of the British and the Americans that the Chinese would support the Japanese with [Page 837] their votes. The Executive Committee of the American Association may be asked by me to give further consideration to the situation, at which time the Department’s proposal of a 5, 5, 5, 5 ratio will be brought up. Since the Committee had previously approved the 3, 3, 3, 3 ratio I thought it well to consult them before making the new proposal to the Japanese.

Sent to Department, repeated to Chungking and Peiping. Paraphrase to Tokyo by safe hand.