693.002/915: Telegram
The Consul General at Shanghai (Gauss) to the Secretary of State
Shanghai, August 31,
1939—8 p.m.
[Received August 31—8 p.m.]
[Received August 31—8 p.m.]
789. Reference Chungking’s No. 514, August 29, noon, and my No. 780, August 31, 4 p.m.8 regarding the Customs.
- 1.
- Inspector General of Customs has received the instructions of the Minister of Finance as outlined in Chungking’s number 514 with the addition that he is told to stop the enforcement of the proposal, otherwise the Shanghai customhouse should be closed and the Commissioner of Customs suspended. It is also known that the Central Bank which is the duty collecting agency at the customhouse has been instructed to withdraw if bogus currency is to be expected.
- 2.
- The efforts of the Inspector General and the Commissioner of Customs to obtain cancellation or postponement of the proposals have been without avail, but it will be observed from my telegram number 780 that the orders issued represent a substantial modification of the original proposal reported in my 747, August 18, 5 p.m.9
- 3.
- Inspector General is reporting to the Minister of Finance outlining the order as issued in the name of the Reformed Government, stating that all possible efforts have been made to prevent the scheme from materializing, but that it has been intimated that the Commissioner at Shanghai will have no option but to comply under force majeure.
- 4.
- He is saying to the Minister of Finance that while he will of course close the Shanghai Customs as instructed by the Minister in case he is not able to stop the enforcement of the order, he suggests that the Minister reconsider the instruction to close. He is pointing out (1) that so long as the Customs in the occupied ports function under the direction of the Inspector General the Chinese Government will still hold a nominal sovereignty over such customs establishments and both Chinese and foreign trade, shipping and finance will continue to benefit thereby; (2) that if Customs is closed the Japanese or the bogus authorities will be in a position to reopen it immediately, and if they secure control of the Shanghai establishment they will probably assume control of all customhouses in the occupied ports and administer them according to their own wishes, as they did in Manchuria, with resulting loss of China’s prestige before the world, and inevitable restrictions upon the legitimate trade of Chinese and foreign merchants; (3) that the friendly powers which have a great interest in the integrity of the Customs may strongly oppose the Government action in closing the principal customhouse; and (4) that from every [Page 858] point of view, therefore, economically, financially and politically, it is to the advantage of the Chinese Government that the Customs administrative integrity in the occupied ports should be maintained.
- 5.
- Apparently there is a real danger that the Chinese Government will insist upon the closing of Customs when the Japanese will take over here and at all ports in the occupied area.
- 6.
- The Inspector General feels therefore that at the same time that the interested powers might endeavor to persuade Tokyo to cancel or postpone the new procedure here, representations should also be made at Chungking to persuade the Chinese Government not to disrupt the whole Customs Administration by measures to close the customhouse.
Repeated to Chungking, Peiping and Tokyo.
Gauss