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that we are mindful of all phases; that in thus giving attention it will be necessary for us to avoid any step which might do more harm than good.

The Ambassador then inquired as to the attitude of the United States in the event of a clash, to which I replied again that our country is, of course, intensely interested in peace and that we earnestly hope no clash will occur.

793.94/8266

C[ORDELL] H[ULL]

Memorandum by the Assistant Chief of the Division of Far Eastern Affairs (Hamilton)

[WASHINGTON,] October 2, 1936. The French Ambassador, Mr. André de Laboulaye, called by appointment. He said that this morning he had received a cable from his Government stating that the French Government had been informed in London that the British Government had made an informal approach in Tokyo to the Japanese Government urging that the Japanese Government adopt a moderate and conciliatory attitude in its present relations with China. The Ambassador said that his cable asked him to call at the Department and inquire, in the light of the circumstance that the American Government was the "custodian" of the Washington Conference treaties, as to the attitude of the Department of State in the matter and whether the American Government planned to make an approach to the Japanese Government. The Ambassador said further that his cable indicated that the receipt of information in regard to the attitude of the American Government would be helpful to the French Government in itself reaching a decision in the matter.

Mr. Hamilton said that we were of course following developments in the situation with especial care and concern and that we were endeavoring to assemble all possible information which would be helpful to us in adequately understanding the situation. Mr. Hamilton said that the Ambassador would realize that due to the position of leadership which the American Government took in the SinoJapanese controversy in 1931 and the immediately ensuing years, in relation to a situation where there were involved rights, interests and obligations common to this and many other Governments, the American Government now, in order that any approach made by it to the Japanese Government might not have an adverse rather than a good effect, had to move perhaps more circumspectly than other governments: at least the American Government had to weigh very carefully the question whether any diplomatic action which it might take would be likely to do more harm than good.

The Ambassador stated that if and when the Department should reach a decision whether to make an approach to the Japanese Government, he would appreciate being informed of the nature of the decision. Mr. Hamilton said that he would be glad to do this.

M[AXWELL] M. H[AMILTON]

793.94/8208: Telegram

The Secretary of State to the Chargé in Japan (Dickover)
WASHINGTON, October 2, 1936–9 p. m.

127. Your 200, October 1, 10 p. m.

1. The Department is continuing to study the situation in the light of all available reports. In the meanwhile the Department desires that the Embassy act along the lines of the suggestion contained in paragraph 5 of your telegram under reference, namely, to let the Japanese Government know by informal conversations that the American Government is watching the situation constantly and with solicitous interest. In so doing the Embassy should act as upon its own initiative, and the Embassy will of course endeavor to avoid publicity and to choose as soon as practicable appropriate occasions for such conversations.

2. We suggest that you (or alternatively Ballantine) say to the Vice Minister that you had for some time been observing with concern the press reports of the differences lying between the Japanese Government and the Chinese Government, but that you had refrained from approaching the Foreign Office lest undesirable publicity ensue; that the press reports are now assuming so serious a tone that you consider it advisable to seek authoritative information with regard to the developments to which the press reports refer; and that you accordingly invite the Vice Minister to comment on these reports in order that you may be in position to keep your Government adequately and accurately informed of developments in a situation which of course commands its interest and concern.

3. Please continue to report promptly and fully by cable.

4. The Department appreciates the promptness and comprehensiveness of your telegram under reference.

5. Referring to paragraph 6 of your telegram under reference, a telegram from Wilson at Geneva indicates that the Chinese Ambassadors to Great Britain and to France had knowledge that the British Government intended to instruct its Ambassador in Tokyo to approach the Japanese Government.

HULL

693.94244/151: Telegram

The Ambassador in China (Johnson) to the Secretary of State

PEIPING, October 3, 1936-11 a. m. [Received 8 p. m.]

473. The representative of the Ministry of Finance has returned to Nanking. Nothing definite can be learned regarding the plans of the Chinese authorities relative to the smuggling situation, but it is rumored that a new committee will be formed composed of members of the Chinese Maritime Customs, Hopei-Chahar Political Council, and the Ministry of Finance, the function of which will be the disposal of the accumulation of smuggled goods in Tientsin.

It is reported that smuggled merchandise continues to move out of Tientsin to the interior by roads and canals, but that only very small quantities of these goods now pass into Shantung and Honan due to interference by the authorities. Tsinanfu reports that 12 truckloads of such goods (mainly rayon, sugar and cigarette paper) are said to have arrived there on September 23, and that on the same day 60 truckloads left Tientsin for Tsinanfu. The trucks are said to be driven by Chinese and carrying Japanese guards who are armed with rifles and machine guns. Tsinanfu understands, however, that the Chinese authorities have instructed the natives living along the route followed by the trucks to dig ditches across the roads and create other obstructions. This may result in decreased smuggling but will also ruin motor roads in Shantung.

JOHNSON

793.94/8216: Telegram

The Counselor of Embassy in China (Peck) to the Secretary

of State

NANKING, October 3, 1936-noon. [Received October 3-10: 15 a. m.]

290. My 285, September 29, 2 p. m.

1. I called on Vice Minister Hsu Mo this morning on a purely social matter and he took the opportunity to give me an extensive review of the discussions between the Japanese Ambassador and the Chinese Minister for Foreign Affairs differing slightly from my September 29, 2 p.m. He said proposals made by the Japanese Ambassador were (1) reorganization of the five northern provinces with arrangements for economic cooperation therein, (2) joint defense against Chinese communistic military activities, (3) convention for direct air communication between Japan and Shanghai, (4) Japanese advisers in many departments of the Chinese Government removing disparity

between numbers of Japanese and advisers of other nationalities, (5) customs convention specifically lowering rates on certain items.

2. The Chinese Minister for Foreign Affairs replied to the Japanese Ambassador that China was quite willing to effect economic cooperation with Japan but wished to begin with two economic conditions only, namely, Hopei and Chahar; suppression of Chinese Communist forces was a purely internal matter; China would be willing to conclude air convention on reciprocal basis recognizing China's sovereignty; China has already one Japanese adviser but would be willing to engage more in purely technical but not political or military capacities; China has not adopted any reciprocating customs conventions but would be willing to revise the customs tariff with both increases and decreases and having regard to necessity for maintaining customs receipts.

3. The Chinese Minister of Foreign Affairs then enumerated points which China regarded as requiring action by Japan if relations were to be improved. Briefly they were (1) elimination of the East Hopei autonomous regime, (2) Japanese cooperation in suppressing smuggling in North China, (3) cessation of indiscriminate flights by Japanese airplanes in disregard of China's sovereignty, (4) revision or cancellation of the Shanghai and Tangku military arrangements of 1932 and 1933. The last interview on September 23 ended abruptly and in a strained atmosphere.

4. The Vice Minister told me that substantially this outline had been sent to the Chinese Ambassador for communication to the Department of State but there was another matter he would be grateful to have me transmit. He said that the British Ambassador in Tokyo under instructions from his Government had called on the Japanese Minister for Foreign Affairs to urge moderation on the Japanese Government in what was currently regarded as a crisis in Sino-Japanese relations; the French Ambassador in Tokyo had received similar instructions. The Vice Minister wondered whether the American Government would be willing to take a like step through the American Chargé d'Affaires in Tokyo. He said that I might have heard a comment which he said is being made by many persons today, namely, that in reference to the present crisis Great Britain and the United States have interchanged positions as compared with their positions during a similar crisis in 1931 and 1932. I referred to newspaper reports that the British Ambassador in Tokyo had informed the Japanese Foreign Office that Great Britain was not intervening in the present discussions between China and Japan. The Vice Minister said that his information was that these newspaper reports were not true.

5. I said that I would telegraph the purport of his remarks to the American Ambassador and to the Department.

6. My telegram No. 287, October 1, 2 p. m., paragraph 1. The Vice Minister said the Chinese Government has no present intention to issue a statement. The two officials mentioned returned from Kuling yesterday. The director of the Asiatic Department will call on the Japanese Ambassador I presume today. The Vice Minister said General Chiang's duties would require his early return to Nanking but the date was uncertain. Other sources state Chiang will return. October 5th.

7. Sent to the Department and Peiping.

PECK

793.94/8218: Telegram

The Chargé in Japan (Dickover) to the Secretary of State

TOKYO, October 3, 1936-7 p. m. [Received October 3-1:10 p. m.]

203. Embassy's 200, October 1, 10 p. m.

1. This morning Ballantine called on Vice Minister for Foreign Affairs at the Vice Minister's request. Vice Minister stated in view of misleading and mischievous press reports abroad regarding SinoJapanese relations he wished to say that discussions with the Chinese Government to solve pending questions and adjust relations had not reached substantial stage when Chengtu incident occurred, and that this and other incidents interfered with progress of negotiations. Vice Minister said that Japan desires in connection with the settlement of these questions that China take effective steps to eradicate anti-Japanese movements, and that at the same time Japan desires to clear up other questions which he could not enumerate but which he emphasized are Japanese desires to be attained by discussion and are not unconditional demands. The Vice Minister said there are no new points in the negotiations. Referring to press reports he denied that Japan is asking for the right to station troops along the Yangtze or for the rights of North China involving fiscal, administrative, diplomatic autonomy. In reply to a question the Vice Minister said that a press interview by Kuwashima, director of Asiatic Bureau, was substantially correct except alleged statements defining scope of demands. In conclusion the Vice Minister emphasized Japan's desire for a solution of issues by diplomacy and express [ed] the hope that the Embassy would inform the American Government of the situation.

2. The Kuwashima interview referred to in paragraph 1 has been reported by the Associated Press. In view of the Vice Minister's remarks and in view of the care of Foreign Office representatives not to divulge the actual points under discussion with China the Embassy believes that the report of the Kuwashima interview is of no value as defining the demands.

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