SIR FREDERICK MAZE AND CHINESE MARITIME CUSTOMS,1937-1941 23 toms.21 This became apparent when in papers and the American diplomatic late November L.H.Lawford,the correspondence,and need not be re- Shanghai commissioner,opened talks viewed here.From the beginning it was with the Japanese on the future of the apparent that Japan would try to extend Customs in that city.The problem there the Tientsin settlement to the rest of was essentially the same as it had been China,and,furthermore,the Japanese in Tientsin:to keep the Japanese from officials in Shanghai made it clear that seizing the revenues,and to try to en-they would tolerate no interference from sure that they would be used for the third parties.This,however,was an out- servicing at least of China's foreign debts look which the civil government in and indemnities.Yet Shanghai was the Tokyo did not share,and Foreign Min- most important port in China,and from ister Hirota promised that full considera- the beginning it was clear that what tion would be given to foreign interests. happened there would affect the whole An Anglo-French-American demarche in position of the Customs in occupied the Japanese capital on November 28-29, territory.Already the situation was com-1937-"parallel"rather than "joint,"in plicated by a number of new factors.In order not to offend American sensibili- the first place,the Japanese controlled ties-had some effect in easing the pres- not only the Chinese city,but the north-sure on Maze and Lawford to come to a ern and eastern regions of the Interna-quick local settlement.E.I.Hall-Patch, tional Settlement as well,excluding for the British embassy's financial adviser, the most part the authority both of the and Clarence E.Gauss,the American Customs and of the Shanghai municipal consul-general,were instructed to handle council from an area where 90 per cent the negotiations for their countries in of the settlement's developed water front-Shanghai,as was the French ambassador age lay.Second,in September Maze had,for his.23 By mid-January 1938,however, at Kung's orders,started to withhold it was apparent that there was little hope from Japan her monthly instalments of of a settlement as long as the talks con- the Boxer Indemnity,placing them in a tinued in Shanghai.The Japanese con- special account in the British Hongkong sul-general,still hoping to solve the and Shanghai Bank.And finally,in early problems bilaterally with Lawford,was October,when the Bank of China with-disinclined to listen to outsiders,24 and, drew from Shanghai,he had arranged as was frequently true in these years,it for the deposit of all Customs revenues, became obvious that the embassy and save those of Tientsin and Chinwangtao,consular authorities,under the influence in the Hongkong and Shanghai Bank,a of the military,were taking a more ag- move to which no publicity was given.22 gressive line than was the foreign office The long and tedious course of the in Tokyo.On January 20 Lawford was Customs negotiations which took place in Shanghai and Tokyo from November 23 Lawford to Maze,Nov.29,Dec.1,1937,P.C.. Mar.-Dec.1937;Sir Robert Craigie to foreign 1937 until May 1938 may be traced office,Nov.27 and 28,1937,Br.Emb.,I,No.0; through the pages both of the Maze FRUS,1937,II1,881-84,886-87.889-90:United States,Department of State,Foreign relations 21 Maze to Hall-Patch,Nov.1,1937,same to of the United States:Japan,1931-1941 (Wash- Macoun,Dec.7,1937,and same to Lawford, ington,D.C,1943),I,730. Dec.28,1937,P.C,Mar.-Dec.1937. 24"A short report on the situation of the 22 Maze to the Yokohama Specie Bank,Sept. Chinese Maritime Customs in September 1940," 29,1937,bd.,FRUS,1937,IL,901. C.L.,XIV,381
SIR rREDLRrCK RI.ZZE AND CHINE:SE hlARITIME CUSTORIS, 1937-1941 23 toms.21 This became apparent when in late November L. H. Lawford, the Shanghai commissioner, opened talks with the Japanese on the future of the Customs in that city. The problem there was essentially the same as it had been in Tientsin: to keep the Japanese from sei7ing the revenues, and to try to ensure that they would be used for the servicing at least of China's foreign debts and indemnities. Yet Shanghai was the most important port in China, and from the beginning it was clear that what happened there would affect the whole position of the Customs in occupied territory. Already the situation was complicated by a number of new factors. In the first place, the Japanese controlled not only the Chinese city, but the northern and eastern regions of the International Settlement as well, excluding for the most part the authority both of the Customs and of the Shanghai municipal council from an area where 90 per cent of the settlement's developed water frontage lay. Second, in September Maze had, at Kung's orders, started to withhold from Japan her monthly instalments of the Boxer Indemnity, placing them in a special account in the British Hongkong and Shanghai Bank. And finally, in early October, when the Bank of China withdrew from Shanghai, he had arranged for the deposit of all Customs revenues, save those of Tientsin and Chinwangtao, in the Hongkong and Shanghai Bank, a papers and the American diplomatic correspondence, and need not be reviewed here. From the beginning it was apparent that Japan would try to extend the Tientsin settlement to the rest of China, and, furthermore, the Japanese officials in Shanghai made it clear that they would tolerate no interference from third parties. This, however, was an outlook which the civil government in Tokyo did not share, and Foreign Minister Hirota promised that full consideration would be given to foreign interests. An Anglo-French-American de'marche in the Japanese capital on November 28-29, 1937-"parallel" rather than "joint," in order not to offend American sensibilities-had some effect in easing the pressure on Maze and Lawford to come to a quick local settlement. E. I. Hall-Patch, the British embassy's financial adviser, and Clarence E. Gauss, the American consul-general, were instructed to handle the negotiations for their countries in Shanghai, as was the French ambassador for his.23 By mid-January 1938, however, it was apparent that there was little hope of a settlement as long as the talks continued in Shanghai. The Japanese consul-general, still hoping to solve the problems bilaterally with Lawford, was disinclined to listen to outsiders,*4 and, as was frequently true in these years, it became obvious that the embassy and consular authorities, under the influence of the military, were taking a more agmove to which no publicity was gi~en.2~ gressive line than was the foreign office The long and tedious course of the Customs negotiations which took place in Shanghai and Tokyo from November 1937 until May 1938 may be traced through the pages both of the Maze 21 Maze to Hall-Patch, Nov. 1, 1937, same to hlaconn, Dec. 7, 1937, and same to Lawford, Dec. 28, 1937, P.C., Mar.-Dec. 1937. 22 Maze to the Yokohama Specie Bank, Sept. 29, 1937, ibid.; FRUS, 1937, 111, 901. in Tokyo. On January 20 Lawford was 23 Lawford to &raze, Nov. 29, Dec. 1, 1937, P.C., Afar.-Dec. 1937; Sir Robert Craigie to foreign office, Nov. 27 and 28, 1937, Br.Emb., I, No. 0: FRUS, 1937, 111, 881-84, 886-87, 889-90; United States, Department of State, Foreign relations of the United States: Japan, 1931-1941 (Washington, D. C., 1943), I, 730. 24"A short report on the situation of the Chinese Maritime Customs in September 1940," C.L., XIV, 381
24 NICHOLAS R.CLIFFORD handed a new set of proposals,providing the British refused to comment on for the deposit of the revenues in the a "hypothetical"situation,although Yokohama Specie Bank in his name,and Charge R.G.Howe did transmit Lon for the payment of loan quotas and of don's promise of support,"provided you Customs costs.Maze was apparently keep us informed and are guided by our ready to accept these at least as a basis advice."27 For Maze the situation was for discussion,but the British embassy more than hypothetical;it embodied the now balked.They wanted the revenues whole question of what his relationship placed in the Hongkong and Shanghai to the puppets should be,and the possi Bank,they argued that loan quotas bility of the establishment of a separate should be determined by all the inter-Customs for occupied China continued ested powers and not simply by the Japa-to haunt him until Pearl Harbor. nese and Customs authorities (as the For the moment,however,nothing Japanese wanted),and,furthermore,they came of the threat.In early February still hoped that the service of internal 1938 Maze met Kung in Hongkong and loans might be provided for.25 once more talked him out of withdraw The situation was further complicated ing the Customs service from the oc. by the establishment,on December 14,cupied areas,while securing the minis 1937,of the Japanese-sponsored Peking ter's tacit agreement to Maze's retaining Provisional Government for the north,a working contact with the Japanese- under Wang Keh-min.This body an-a policy which,the inspector-general nounced a series of tariff reductions on later commented,"excited mixed com- January 21,1938,and,not surprisingly,ments and adverse reaction"in the Chi. Japan was the chief beneficiary.Ameri-nese capital.2s Otherwise,however,Kung can and British protests had no effect,refused to give him much freedom of and Maze wanted to neutralize the ac-action,refused to introduce the 1931 tion by recommending to Kung that tariff,continued his opposition to de- China lower her own rates from the high posit in the Yokohama Specie Bank,and 1934 level then in force to the lower refused to authorize payment of the tariff of 1931,to prevent a diversion of Boxer Indemnity arrears to Japan.2 trade to the north.26 Nor was this all Kung himself was torn in two directions; Maze had to worry about from Peking.he was at once a member of a govern. On January 8 he wrote the British,ment understandably more concerned French,and American representatives in with the prosecution of the war than Shanghai that Wang might "appoint"with the claims of foreign bondholders, him inspector-general,and,when he re-and yet he recognized the validity of fused,would "dismiss"him and put Maze to Naggiar,Jan.8,1938,Br.Emb.,VoL someone more pliant in his place.The I,No.4:R.G.Howe to Maze,Jan.19,1938 United States did not reply,the French bid,No.5;FRUS,1938,IⅡ，627-28,632-33 Rightly or wrongly it was rumored that Myers gave a general assurance of support,and might be offered the post (FRUS,1937,III,906- 8),and there was a strong hint of this in K.E. 25 Ibid.,pp.381-82;Lawford to Maze,Jan.20, Jordan's long report of his trip to the north 1938,P.C.,May-Oct.1939;minute of interview (Jordan to Maze,Dec.31,1937-Jan.5,1938. by Hall-Patch,Feb.1,1938,P.C.,Jan.-June 1938; P.C.,Jan.-June 1938). FR/S,1938,IL,632-33.635-36. 2s"The 'China Incident'to 'Pearl Harbour, 26 R.G.Howe to Maze,Jan.28,1938,Br.Emb., 1937-1941,”C.L,XV,180-81. Vol.I,No.11;Maze to Kung,Jan.25,1938, 29 Kung to Maze,Feb.10,1938,Br.Emb.,Vol. ibid.,No.8;FRUS,1938,III,634-40. I,N0.86a
24 NICHOLAS R. CLIFFORD handed a new set of proposals, providing for the deposit of the revenues in the Yokohama Specie Bank in his name, and for the payment of loan quotas and of Customs costs. Maze was apparently ready to accept these at least as a basis for discussioi~, but the British embassy now balked. They wanted the revenues placed in the Hongkong and Shanghai Bank, they argued that loan quotas should be determined by all the interested powers and not siniply by the Japanese and Customs authorities (as the Japanese wanted), and, furthermore, they still hoped that the service of internal loans might be provided for.25 The situation was further complicated by the establishment, on December 14, 1937, of the Japanese-sponsored Peking Provisional Government for the north, under lj'ang Keh-min. This body announced a series of tariff reductions on January 21, 1938, and, not surprisingly, Japan was the chief beneficiary. American and British protests had no effect, and Maze wanted to neutralize the action by recommending to Kung that China lower her own rates from the high 1931 level then in force to the lower tariff of 1931, to prevent a diversion of trade to the north." Nor was this all hlaze had to worry about from Peking. On January 8 he wrote the British, French, and American representatives in Shanghai that TZ'ang might "appoint" him inspector-general, and, when he refuwd, would "dismiss" him and put someone Inore pliant in his place. The Unitetl States did not reply, the French ga\e a general assurance of support, and ?:, Iljiil., pp. 381-82; Lawford to Maze, Jan. 20, 1938, P.C., Jfay-Oct. 1939; minute of interview bv Hall-Patch. Feb. 1, 1938, P.C., Jan.-June 1938; FIi177, 1938. 111, 632-33, 635-36. 2C R,G. EIowe to Maze, Jan. 28, 1938, Br.Emb., Yol. I, So. 11; 3Iaze to Kung, Jan. 25, 1938, ibid., No. 8; FKCrS, 1938, 111, 634-40. the British refused to comment or a "hypothetical" situation, althouglChargC R. G. Howe did transmit Lon don's promise of support, "provided you keep us informed and are guided by OUT advice."27 For Maze the situation wa: more than hypothetical; it embodied the whole question of what his relations hi^ to the puppets should be, and the possi. bility of the establishment of a separate Customs for occupied China continued to haunt him until Pearl Harbor. For the moment, however, nothing came of the threat. In early February 1938 Maze met Icung in Hongkong and once more talked him out of withdraw. ing- the Customs service from the occupied areas, while securing the minister's tacit agreement to Raze's retaining a working contact with the Japanesea policy which, the inspector-general later commented, "excited mixed comments and adverse reaction" in the Chinese capital.'s Otherwise, however, Kung refused to give him much freedom 01 action, refused to introduce the 1931 tariff, contintled his opposition to depcsit in the Yokohama Specie Bank, and refused to authorize payment of the Boxer Indemnity arrears to Kung himself was torn in two directions; he was at once a member of a government understandably more concerned with the prosecution of the war than with the claims of foreign bondholders, and yet he recognized the validity of 27 3Iaze to Kaggiar, Jan. 8, 1938, Br.Emb., Vol. I, KO. 4; I<. G. Howe to hIazc, Jan. 19, 1938 ibiii., So. 5; FKU.9, 1938, 111, 627-28, 632-39 Rightly or wrongly it was rumored that hfyer! might be offered the post (FIIC'S, 1937, 111, 906- 8), and there was a strong hint of this in K. E. Jordan's long report of his trip to the north (Jordan to JIa7e, Dec. 31, 1937-Jan. 5, 1935 P.C., Jan.-Jur~e 1938). 23"Thc 'Chitla Incident' to 'Pearl Harbour, 1937-1941," C.L., XV, 180-81. 23 Knng to hlaze, Feb. 10, 1938, Br.Emb., Vol. I, No. 3Ga