793.94/8542: Telegram
The Counselor of Embassy in China (Peck) to the Secretary of State
[Received 3:45 p.m.]
119. 1. A Japanese Economic Mission arrived in Shanghai from Japan March 14 and in Nanking March 15 its purpose as reportedly stated in January by Japanese Minister of Finance being to (1) return the call in October 1935 of a Chinese Economic Mission to Japan, (2) “impress upon Chinese official and private circles Japanese side of the argument for joint development of China’s economic sources”. Kenji Kodama, head of the group, was recently reported as denying that the group was entrusted with any special mission but would “doubtless prepare the ground of economic cooperation between China and Japan”.
2. The group’s personnel has caused press to attach considerable significance to the visit and includes the presidents or other high [Page 47] officials of such concerns as Mitsui, Mitsubishi, Nippon Yusen, Dai Nippon sugar, Toyo and Dai Nippon cotton spinning; Chosen and Sumitommo Banks; Japanese cotton mill owners in China and Sino-Japanese Trade Associations. The group was accompanied to Nanking by the Chinese Ambassador to Japan, several Shanghai Chinese businessmen and the Japanese Military Attaché and was greeted by a delegation headed by the Chinese Minister of Industries. The day was spent in calls and entertainments at which Ministers of Communications, Railways and Industries were hosts.
3. Characteristic Chinese press comment: the Mission’s intention of cooperation should not be lightly regarded since members represent the captains of Japanese industry and can exert great influence over whatever policy their Government may adopt vis-à-vis China; while the Chinese do not expect much, they hope the members will be observant and on returning to Japan will advise their fellow countrymen and Government whether or not certain Japanese actions and policies in China should not be rectified; they should notice that “certain people” have been monopolizing the illicit drug traffic not only for pecuniary purposes but to make their victims unfit for manly duties; they will observe the “special trade” in North and South China and discover that this is not only injuring ordinary trade conducted by Japanese and others but was disrupting Chinese public finance and revenue; economic or other cooperation must be built on principles of reciprocity and equality.
4. Director of Department of Intelligence and Publicity of Foreign Office has made the informal comment to me that since mission has no official character whatever and that it can accomplish little unless the Japanese Minister for Foreign Affairs takes steps to abate the smug-ling in North China and to induce Japanese banks to hand to the Chinese Government silver stocks of about 9,000,000 Chinese dollars in conformity with the currency regulations following the example of all other foreign banks.
5. Sent to the Department, by mail to Peiping, Shanghai, Tokyo.