Office of the Historian

693.002/661: Telegram

The Ambassador in Japan (Grew) to the Secretary of State

Tokyo, May 24, 1938—10 a.m.
[Received May 24—7:13 a.m.]

327. Department’s 176, May 20, 1 p.m., Chinese Maritime Customs.

1.
We assume that the Department does not wish us to reiterate points (a) and (b) set forth in the first paragraph of the Department’s [Page 714] 153, May 2, 8 p.m. It seems to us that we have placed ourselves amply on record in regard to those points in our note of November 28, 1937,93 copy enclosed with despatch No. 2674 of November 29, 193794 and subsequent notes and conversations.
2.
With regard to presenting a pro memoria covering the question of foreign exchange along the lines set forth in the Department’s 157, May 4, 6 p.m., can it not be held that our position has been adequately recorded by my oral statement to the Minister for Foreign Affairs on May 17 and the memorandum of the conversation prepared by me immediately thereafter95 which is on the Embassy files and a copy of which will go to the Department by mail? When I went to see the Minister on May 17 I took with me a pro memoria setting forth the points in the Department’s 157 but I did not leave it with Hirota because as the conversation progressed I sensed that it would only serve to increase irritation and to invite a written rebuff without accomplishing any constructive purpose.
3.
At one point in our talk Hirota said: “Have you recognized the Provisional Government of North China[?]” to which I replied in the negative and said that in the question under discussion my Government holds the Japanese authorities responsible. Hirota’s implication, although not very clearly stated, seems to have been that we are asking something, namely the furnishing of foreign exchange to holders of the national currency, which is the prerogative of an independent government and that we are not entitled to demand that the Provisional Government fulfill this function unless we are prepared to recognize it as an independent state. His argument while thoroughly specious indicates that in diplomatic controversies relating to North China Hirota will probably pursue the same tactics as he has followed in questions relating to Manchukuo.
4.
As I conceive the situation, the Japanese Foreign Office considers that it has adequately espoused the cause of the foreign interests in the Chinese Maritime Customs in the face of considerable difficulty with the army which undoubtedly desired to confiscate the customs and customs revenues in the occupied areas in toto. As explained in our 285, April 29, 8 p.m., paragraph 3, and 296, May 5, 5 [9] p.m., paragraph 2, there was a moment when the issue was “touch and go” and when the whole situation might have been lost had not the British promptly closed their agreement.
5.
Having informed my French colleague of my talk with the Minister for Foreign Affairs on May 17, I inquired whether he proposed [Page 715] to take similar action with regard to the question of foreign exchange. He has written me (translation):

“So far as I am personally concerned I do not for the present propose to raise with the Japanese the matter of which you speak. In fact up to the present I have followed very closely and have supported the negotiations carried on by our British colleague and I think that the results which he has obtained are all that we can expect.”

6.
I hesitate to take any step which might afford the Japanese Government an excuse, however specious, to reopen the whole question and possibly to jeopardize what has already been accomplished. The army, especially since the fall of Hsuchow, is “feeling its oats” and its future action vis-à-vis the customs as toward other matters is unpredictable, in any case, should I present the proposed document, I would anticipate a possible reply in the nature of a rebuff which might well lead unavoidably to further acrimonious correspondence with possibly deleterious results.
7.
Department’s paragraph numbered 2. I spoke to the Minister in our conversations of May 17 about the risk of adverse publicity in the United States. Occasion might be taken to reiterate that risk but I do not think any useful purpose would be served by using such a statement as an implied threat.
8.
If, notwithstanding the considerations above set forth, the Department still desires that I present the pro memoria, please instruct me accordingly. I suggest that the Department may wish to consider in connection with this matter the contents of our 328, May 24, 11 a.m.96

Not repeated to Hankow.

Grew
  1. Foreign Relations, Japan, 1931–1941, vol. i, p. 730.↩
  2. Despatch not printed.↩
  3. Foreign Relations, Japan, 1931–1941, vol. i, p. 743.↩
  4. Infra.↩