693.002/690: Telegram
The Consul General at Shanghai (Lockhart) to the Secretary of State
[Received June 9—2:05 p.m.]
798. 1. The British Ambassador has informed me that the Inspector General of Customs has notified him that in recognition of the special circumstances now existing in Shanghai with reference to the collection of customs duties and the likelihood that the present situation will continue for some time he contemplates recruiting about 22 additional examiners and 40 additional tidewaiters, all of Japanese nationality, in order to render effective control at Japanese wharves. Negotiations have been in progress between the customs and Japanese authorities for some time looking to the resumption of customs control north of the Creek and the above arrangement appears to have been a concession on the part of the customs based on a written assurance of the Japanese authorities that they are prepared to cooperate with the customs to check smuggling and generally to require all Japanese firms and individuals to pay duty on dutiable cargo.
2. The British Ambassador has informed the Inspector General that he is in agreement with the view that normal conditions should be restored on the wharves in Hongkew, Yangtzepoo and Pootung, that smuggling should cease and that all commercial cargoes and vessels of no matter what nationality should be subject to same customs [Page 725] treatment. He had stated that while he is not in a position to express any views on the numbers of staff required it is expedient to recruit staff, of Japanese or other nationals, if the customs authorities believe that the attainment of the objectives requested in paragraph 1 would thereby be facilitated.
3. It is the Inspector General’s intention to appoint 32 of the above-mentioned Japanese on a contract, not a permanent, basis.
Repeated to Hankow, Peiping and code text by mail to Tokyo.