693.006 Manchuria/33: Telegram
The First Secretary of Embassy in China (Smyth) to the Secretary of State
[Received July 25—8:40 a.m.]
251. Peiping’s 244, July 20, 9 a.m., Chungking’s July 22, 9 a.m. to Peiping (repeated to the Department)4 and related telegrams in regard to the new North China import restrictions.5
The Embassy here regards the new restriction on imports as another step in furtherance of Japanese plans for economic hegemony in [Page 530] North China. This particular part of the program follows closely the pattern set up in Manchuria, the principal underlying motive of which is the control of currency should be so regulated that all foreign exchange derived from North China’s foreign trade should pass into Japanese hands. It is obvious that principles of fair competition and equal opportunity have no part in the Japanese program. American business in Peiping as well as in Tientsin are emphatic in their belief that if these new regulations are continued in force American trade in North China will be placed on the same basis as in Manchuria. It is the considered opinion of the Embassy here based on past developments that representations on this matter to the Japanese Government will be ineffective and unless backed up by a definite intimation to the Japanese Government that a refusal to remove the present impediments to American trade in North China will result in the immediate enforcement of counter-measures against Japanese trade with the United States.
Sent to the Department. Repeated to Chungking, Tokyo, Tientsin.