OUTWARD TELEGRAM
[This Document is the Property of His Britannic Majesty's Government, and should be kept under Lock and Key.]
32
(F 12813/6457/10)
GENERAL DISTRIBUTION.
To JAPAN.
Cypher telegram to Sir R. Craigie (Tokyo)
Foreign Office, 19th December, 1939, 11.50 p.m.
No. 866.
Your telegram No. 1642 [of 16th December:
at Tientsin].
currency question
I think we should be clear in our minds as to the difference
between what the Japanese may reasonably expect of us and what
may be intended by them to impair the administrative integrity
of the concession and to undermine the position of the National
Government in North China or the principles underlying the
policy of His Majesty's Government.
2. It is clear from Tientsin telegrams Nos. 470 and 480
[of 31st October and 24th November] that the use of fapi is by
no means confined to the British concession. There is, moreover,
some reason to suppose that gambling and smuggling are carried
on elsewhere, with Japanese connivance.
3. Apart from the fact that we have never recognised the
formula of 22nd July as covering a recognition of the illegality
of fapi, I am not convinced that the Japanese insistence upon
the clauses affecting currency is actuated only by the aims
outlined in that formula. The basic fact remains that as long
as the Japanese are only in partial control of North China the Chinese national currency is likely to continue in use, while
there is to be some kind of exchange must exist if any interchange of goods between occupied and unoccupied
areas/