893.102S/2432: Telegram

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

108. Shanghai’s 314, March 19, 5 p.m. and previous regarding International Settlement.

1. In a letter dated March 20 Blackburn informs me that he interviewed Chinese Foreign Minister on 19th instant, that he took up matter of International Settlement referred to in his letter of March 17 (see my 105, March 18, 11 a.m.), and that while Dr. Wang did not commit himself he gave the impression that he realized need for reallocation of Council seats, that Dr. Wang raised objections to reduction of [Page 838] number of Chinese councilors. Blackburn states that Dr. Wang asked what American reaction to proposals was and that he replied on basis of a telegram from British Ambassador at Washington86 that American Government seemed generally to agree that some change was necessary but emphasized that such changes as might be made should be made within the framework of the land regulations. Blackburn states that Dr. Wang referred specifically to the American aide-mémoire to Japan of May 17, 1939.87

2. Yesterday afternoon (March 21) Dr. Wang asked me to come to see him. He told me of the visit of Blackburn and during conversation referred to a written communication from the British Embassy which evidently endorsed a memorandum of proposals for changes in the Government of the International Settlement of Shanghai along lines contained in Shanghai’s 186, March 23 [February 13], 4 p.m., the idea being, as he said, that the Municipal Councilors should resign and turn government of Settlement over to the consular body which would appoint a commission and suspend the land regulations temporarily. Dr. Wang informed me that the Chinese Government’s decision would be withheld until it was informed of the decision of the American Government as the Chinese Government desired to align itself with the American Government in this matter. He stated that the reaction of the Chinese Government to these proposals was that now was not the time to change the land regulations while hostilities were still going on and Japanese military was dominant around Shanghai. He said that China was not satisfied with the land regulations but felt that this was not the time to abandon them. He also said that China was disposed to object to any decrease in Chinese representation on the ground that the Chinese population and Chinese wealth was predominant in the Settlement.

He also stated that the Chinese Government was by no means disposed to object to a reform in the method of taxation in the Settlement. I informed Dr. Wang that I would report to you what he had said to me. I said that generally speaking we were opposed to any abandonment of the land regulations but would be willing to consider by orderly process any proposal for a redistribution of representation on the Council within the framework of the land regulations or by amendment thereof. I remarked that any consideration of this problem on the basis of predominance of interest of this or that nationality at the present time would inject into the discussion problems difficult to solve in view of the predominance of Japanese military and political interests at the present time. Dr. Wang stated in conclusion that above views were China’s reaction to the proposed changes and it did not constitute any decision of the Chinese Government [Page 839] which be [he] repeated awaited information of the decision of the American Government.

Sent to the Department, repeated to Peiping, Shanghai. Shanghai please repeat to Tokyo.