693.002/415: Telegram
The Ambassador in Japan (Grew) to the Secretary of State
[Received December 4—2:57 p.m.]
594. 1. My British colleague yesterday addressed to the Minister for Foreign Affairs an informal letter dated December 2nd concerning the Chinese Customs as follows: [Page 896]
“My Dear Minister, I venture to enclose, for your confidential information, an extract from a telegram which I have just received from Shanghai reporting a conversation which took place on the 30th ultimo between Mr. Okamoto, Mr. Phillips, the British Consul General at Shanghai, and Mr. Hall-Patch, the British Financial Adviser, on the subject of the Shanghai Customs.
I should like to draw attention particularly to Mr. Okamoto’s statement that he could only discuss the customs question with representatives of the foreign powers ‘when he had come to an agreement with Mr. Lawford as to the control which Japan wished to exercise’. Mr. Okamoto added ‘he had already told Mr. Lawford to deposit with the Yokohama Specie Bank’.
I had understood from my last conversation with Your Excellency that Mr. Okamoto would be instructed to ascertain the views of the British representatives before he reached any agreement with the Shanghai Commissioner of Customs, and it was therefore very disappointing to me to find that on November 30th Mr. Okamoto was still holding the language ascribed to him in this telegram. Possibly revised instructions may have reached him since then, but I can not too strongly urge upon Your Excellency the desirability of taking no action vis-à-vis of the Customs Commissioner until an understanding on this matter has been reached with the representatives of the interested powers.
I feel I must take very special exception to Mr. Okamoto’s proposal that the revenues should be deposited with the Yokohama Specie Bank as a condition precedent to any discussion with representatives of the interested powers.
The need for the exertion of pressure on the customs officials is all the less apparent in that I understand that the latter are ready to give full guarantees that, pending asettlement no part of the revenue will be allowed to reach any authority of the Chinese Government.
As I am anxious not to leave my Government under any misapprehension as to the attitude of the Japanese Government in this matter, I should be very grateful if you would let me know whether Mr. Okamoto has now been instructed that no arrangement should be reached with the customs administration on any form of ‘control’ without full prior consultation with the British, United States and French representatives in Shanghai.
Believe me, my dear Minister, yours very sincerely, R. L. Craigie.”
2. Craigie considers the situation critical and fears that such pressure will be brought to bear on Lawford that he will accede to the Japanese demands and that we shall then be faced with a fait accompli as we were at Tientsin. He feels that there would be no serious objection to agreeing to the deposit of the customs funds in the Yokohama Specie Bank provided that the Japanese first guarantee (a) control of the funds by an international committee of bankers and (b) the service of loans as a first lien on the deposits. He understands that Okamoto is now discussing the matter with Gauss and [Page 897] feels that unless the latter takes a strong stand “we shall lose the game”.
3. Craigie has written me inquiring whether I feel disposed to make supplementary representations to the Minister for Foreign Affairs along the lines of the last paragraph of his letter. He feels that unless we continue to act in concert it will be interpreted as weakness here. My representations on November 26 and 28 were as forceful and complete as possible but I see no objection to addressing a further letter to Hirota if the Department considers the step desirable. I have no doubt but that Gauss is taking as strong a stand as his instructions and good judgment warrant.
Repeated to Shanghai.