893.102S/2201: Telegram

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

717. Our 711, August 19, noon. Shanghai Defense Sector.

1.
The Foreign Office has just communicated to us its surprise at the news appearing in the afternoon papers attributing to the Under Secretary of State a statement to the effect that negotiations with respect to the settlement of the Shanghai Defense Sector were taking place between Washington and Tokyo. We were informed that the Japanese Government felt that negotiations taking place locally at Shanghai were progressing favorably and that it hoped that the American Government would not feel it necessary to transfer negotiations to Tokyo and to the diplomatic field.
2.
We were further informed that although instructions to that effect had not been communicated to the Japanese authorities at Shanghai the Foreign Office had for some time had in mind as a possible solution of the defense sector the thought of allowing those sectors from which the British withdrew to remain unoccupied and to permit the Municipal Police authorities to assume the sole responsibility for the maintenance of order there.
3.
In order to assist us in our informal discussions with the Foreign Office I would appreciate being informed whether the Department approves of our interpretation as set forth in paragraph No. 3 of our telegram under reference.

Sent to the Department. Repeated to Shanghai. Shanghai please repeat to Chungking, Peiping and the Commander in Chief.

Grew