600.639/354: Telegram
The Consul General at Tientsin (Caldwell) to the Secretary of State
[Received July 15—6:30 a.m.]
153. In response to inquiries made, as instructed in last paragraph of Department’s 47, July 14, 5 p.m., American bank managers have stated that if their present policy is maintained they may expect to have no business of any importance here after about September, the gradual decrease being due to extensions granted by the Federal Reserve Bank to exporters of rugs and possibly a few other commodities.
The same view was expressed to me by a British banker a few days ago in the course of a casual conversation, during which he also observed that it is unfortunate that no banking expert is to participate in the Tokyo negotiations, and gave me the impression that the British banks are not disposed to alter their present policy of noncooperation with Federal Reserve Bank.
The manager of the principal French bank here yesterday during a chance conversation expressed the same view as the British banker just mentioned, and insisted that the banks must maintain their present stand on this question, stating that his bank made a large profit last year and can afford to endure even a long period of no profits for the sake of the principle involved and the future position of the bank. Strong exception to this attitude was taken by a Swiss merchant, who is an important exporter of straw braids to the United States, and who advocated a policy of cooperation with the Federal Reserve Bank, pointing out that at present he is unable to obtain the usual assistance from the bank with which he regularly does business and must go to the Yokohama Specie Bank, and that there are many firms not financially able to survive long under present conditions.
Further inquiries will be made and any information of value will be telegraphed promptly.
Repeated to Chungking, Peiping, Shanghai; airmail to Tokyo.