393.1115 (M)/10: Telegram
The Consul at Mukden (Krentz) to the Secretary of State
[Received August 23—3:04 p.m.]
61. Reference is made to my 58, August 18, 7 p.m.60 It has been apparent from the beginning of present difficulties experienced by foreigners in Manchuria, notably Americans and British, that the underlying cause was a resurgence of anti-foreignism and that this resurgence was due to a recrudescence of military control over the civil authorities. The latter have since my arrival here consistently indicated a lack of desire to agitate the issues of non-recognition and extraterritoriality. So long as the military element was quiescent the authorities although of course pursuing their course of steady elimination of all non-Japanese enterprise and privilege were nevertheless disposed to be pleasant and reasonable in the adjustment of difficulties and showed no disposition toward authorizing personal persecution of foreigners now everywhere evident.
During my last visit to Hsinking (see my 25, July 21, 3 p.m.61) and since I have been much impressed by numerous tacit admissions by high civil officers that the military now control all decisions. There has been some embarrassment but practically no attempt to conceal the obvious fact. As an example the authorities several times in the past gave the Chi Tung Tobacco Company to understand that their British and American staffs here would be permitted to carry on [Page 894] without molestation whatever the situation between the United States and Japan might be. (Chi Tung of course is the best revenue producer for the Government in Manchuria.) The Vice Minister of Finance the other day conveyed to the Company that the civil authorities were still of the same mind but as the army had now intervened the Ministry feared that it now might be in a position to carry out its policy.
I am convinced that the military had embarked upon the present policy towards foreigners prior to the American freezing order ([see my?] July 21, 3 p.m.) and that many of the actions being taken in the name of freezing were in prospect in any event. The freezing situation merely offers a fortuitous cover for the activities. I am of the opinion that if the radical element of the Kwantung army is not already in control that it is exercising at least a major influence.
If the foregoing appraisals are correct it must follow that the position of Americans will continue to worsen. Although the presence of consular officers here may serve for the present to ameliorate conditions and perhaps through our contacts with friendly civil officers somewhat modify harsh decisions it is apparent that our influence will not basically improve conditions, especially as there is ample evidence that we ourselves are to be subjected to increasing pressure and restriction probably to a point nullifying our official status.