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(These remarks seemed to be in part a repetition also of those reported in telegram number 97, April 3, from the American Ambassador at Moscow to the Department.)

3. The Minister for Foreign Affairs was noncommittal but indicated general concurrence in the Ambassador's description of Japan's attitude and the correctness of the Soviet attitude toward Japan. He said to me that he thought the best way to settle difficulties in the Far East would be to convene a conference of the interested powers including China, the Soviet Union and the United States but he supposed the American Government would not be willing to exclude Japan. I observed that the Washington Conference on Far Eastern Affairs had included nine nations. The Minister for Foreign Affairs and the Ambassador asked me to express my personal opinion concerning the advisability of a conference but I evaded this. The conversation then terminated and the observation of the Minister for Foreign Affairs concerning a conference seemed to have been merely a chance remark and not premeditated.

4. To Department and Peiping.

PECK

893.108 Manchuria/43

The Ambassador in China (Johnson) to the Secretary of State No. 477

PEIPING, May 22, 1936. [Received June 15.]

SIR: I have the honor to enclose a copy of despatch No. 261 of May 12, 1936, from the Consulate General at Mukden, on the subject of native communist armies in Manchuria.94

Although there have from time to time been reports of communists among the "bandits" of Manchuria, this is the most concrete information yet received in regard to them and their organization. No reports have been received of large-scale encounters between these alleged communist armies and the Japanese military, and it is therefore assumed that if such armies actually exist they have been skillful in avoiding clashes with Japanese military patrols.

Respectfully yours,

793.94/7913: Telegram

NELSON TRUSLER JOHNSON

The Ambassador in Japan (Grew) to the Secretary of State

TOKYO, May 23, 1936-11 a. m. [Received May 23-2:25 a. m.]

111. According to the best information available to the Military Attaché, the Japanese Garrison in North China will be increased to

"Not printed.

about 4300 officers and men, or to 4675 if additional field artillery is to be sent. Japanese officers here deny that an army division is to be organized in North China.

Repeated to Peiping.

GREW

793.94/7915: Telegram

The Ambassador in China (Johnson) to the Secretary of State

PEIPING, May 25, 1936-noon. [Received May 25-10:30 a. m.]

259. 1. Chinese officials continue to deny that General Sung Che Yuan has entered into any important agreement with the Japanese. They claim that the Japanese are asking for permission to station troops at Fengtai, as well as at Changsintien on the Peiping-Hankow Railway. However, the Japanese military have already taken over a large tract of land at Fengtai and are rapidly constructing buildings on it. It is possible that Hsiao Chen Ying has presumed to make an agreement with the Japanese without reference to Sung.

2. A serious split has allegedly occurred among subordinates of Sung. Sung's division commanders have long disliked Sung's civilian subordinates who negotiated with the Japanese. This feeling has come to a head with the resignation of General Shih Ching Ting from the post of Chief Counselor of the Hopei-Chahar pacification headquarters. (Reference paragraph 2 of Embassy's 201, April 20, 2 p. m.; and subdivision C of paragraph 3 [2] of Embassy's 243, May 15, 3 p. m.) The divisional commanders are favorably disposed toward Shih and partly for this reason Hsiao Chen Ying, Chen Chueh Sheng, and other members of what is now referred to as the Kirin clique brought about Shih's resignation through making misrepresentations to Sung. One official believes that the outcome must be that either (1) Sung will rid himself of these civilians or, (2) the civilians will effect the removal of Sung and act for the Japanese in establishing a regime. This second possibility may have motivated Hsiao in entering into agreements with the Japanese of which Sung is unaware. Sung is said to be attempting now to quiet the dissatisfaction of his military subordinates.

3. The attitude of these civilians is indicated by Chen Chueh Sheng's interview on May 22 to the United Press correspondent in which he said that the National Government is wholly to blame for the smuggling situation in North China, and by an address made a few days ago to Hopei Province magistrates by Pan Yuan Kuei, Chief of the Department of Political Affairs of the Hopei-Chahar Political Council, the address being primarily a veiled attack on Chiang Kai Shek.

4. This so-called Kirin clique is understood not yet formally organized. It allegedly includes General Chin Teh Chun, the Mayor of Peiping, General Men Chih Chun, Chairman of the Reconstruction Committee, and General Fu Chan Kuei, Chief of Staff of the HopeiChahar pacification headquarters, presumably because they fear they could not otherwise hold their jobs.

5. Reference subdivision D of paragraph 2 of Embassy's 243, May 15, 3 p. m., the Hopei-Chahar Political Council issued an order May 23 designating the Hopei Provincial Bank as the sole bank of issue in Hopei and Chahar. This runs counter to the monetary policy of the National Government.

[6.] The Embassy has no information about increase of Japanese forces in addition to that contained in Embassy's 252, May 20, 5 p. m. Lieutenant General Tashiro, commanding North China Garrison, arrived at Tientsin, May 19.

7. Many rumors are current and the situation is not clear. Leading educators of Peiping met May 22 to discuss the desirability of a public expression of opinion on the situation but did not act because of their feeling that they did not know enough of the facts about the situation.

8. According to one report, the Japanese are threatening Sung Che Yuan with a new "autonomy movement" if he does not more quickly meet their wishes, the new movement to be an extension of Yin Ju Keng's sphere to include Peiping and Tientsin.

9. According to an informed official, Japanese recently visited post offices in Kueihwa and Paotow in Suiyuan to investigate the organization and administration of those offices. There are unconfirmed reports of a concentration of Japanese Manchukuo troops in northern Chahar.

By mail to Tokyo.

JOHNSON

793.94/7917: Telegram

The Counselor of Embassy in China (Peck) to the Secretary of State

NANKING, May 25, 1936-5 p. m. [Received May 26-2:25 p. m.95]

157. 1. Embassy has obtained from Foreign Office translation of address on Sino-Japanese relations delivered at weekly memorial service this morning by Minister for Foreign Affairs as follows:

2. "In view of our persistent efforts towards cultivating friendly relations with our neighboring countries, [I] need not emphasize here the importance which we attach to the question of cooperation between China and Japan, which besides being neighbors are also united by 95 Telegram in seven sections.

the ties of racial and cultural affinities. Since the Mukden 'incident' of September 1931, however, an endless succession of crises of unprecedented gravity have resulted in the estrangement of the two peoples and increased their suspicions. The present abnormal state of their relations has been a cause of deep concern to farsighted persons in both countries, and it has been their common desire to restore the friendly feelings which should exist between the peoples and the Governments of the two countries.

3. "Speaking at the Sixty-Eighth Session of the Imperial Diet held over a year ago, Mr. Koki Hirota, then Foreign Minister in the Japanese Government, enunciated the principle of 'nonaggression and no[n]-menace' towards neighboring countries. Although no clear and concrete measures materialized to give effect to this idea of improving Sino-Japanese relations and no practical results were obtained, his efforts in the case [cause?] of peace created a deep impression abroad. With the assumption of the premiership by Mr. Hirota about a month ago and the subsequent appointment of Mr. Hachiro Arita to the post of Foreign Minister, there did not seem to be any fundamental change in Japan's foreign policy. At the recent Sixty-Ninth Session of the Imperial Diet, the new Foreign Minister declared that it was Japan's national policy 'to insure the stability of East Asia, contributing thereby to the cause of world peace, and at the same time to promote the happiness and welfare of Nanking by upholding firmly international justice!' In other words, Mr. Arita not only stated what he declared to be the policy of his Government but also expressed the common aspirations of the various peoples in eastern Asia.

4. "The situation between China and Japan being what it is today, further failure to achieve a thorough readjustment would not only be detrimental to the interests of the two countries, but concerns the whole question of peace in eastern Asia. Therefore, immediately after the assumption of my duties as Foreign Minister, I made up my mind to do my best to effect the readjustment of Sino-Japanese relations through diplomatic channels, and I am happy to say that a similar desire seems to exist in Japan. Nevertheless, it is a matter for regret that concrete discussions have not yet started as regards the scope of the desired readjustment and the manner in which it is to be brought about. So far as China is concerned, any problems, the solution of which will redound to the mutual welfare of the two countries and the security of peace in eastern Asia, are considered as coming within the scope of readjustment, and any formulas based on equality and reciprocity as well as mutual respect for sovereign rights are regarded helpful means towards achieving our end. The readjustment, which it is our intention to bring about, should not be confined to any local question, or to any particular issues. It is desired not as a temporary policy to ease the present situation, but with the object of ensuring the peaceful coexistence of the two peoples for generations to come.

5. "Nations, as individuals, may become the subjects of deep hatreds and animosities, but, as the Chinese saying goes, no lasting fuel ever lasts a century. The will to restore peace and harmony is bound to triumph, provided it is strong enough. It cannot be denied by seeming obstacles. Such being my firm belief, I consider the task of establishing friendly intercourse between China and Japan an im

mediate challenge to practical statesmanship in both countries. I appeal to the political foresight of the responsible authorities of both sides, and earnestly hope that they will make a strong effort to remove the cause of hostility and establish a lasting understanding. It is particularly urgent for them to appreciate each other's standpoint and difficulties and to enter promptly into sincere discussions through the proper channels. It does not avail matters to indulge in mutual recriminations, to harp on vague principles, or to utter under [sic] threats of coercion or of reprisals. What is important is to face concrete problems bearing on the mutual interests of the two countries with an honest and sincere resolve to find equitable solutions.

6. "In the furtherance of her national economy, especially in the field of foreign trade, Japan has complained that she is being surrounded by the so-called economic blocs and the artificial barrier of economic nationalism. Now, in view of the intimate economic relations between China and Japan, any true consideration of the latter's economic interests would presuppose a genuine sympathy with China in any situation tending to wreck her economic structure, as well as a desire to see such a situation ameliorated. At present the smuggling in North China has assumed amazing proportions. The flood of contrabands has paralyzed the market and killed the business of legitimate trade, both Chinese and foreign. Apart from the huge loss of revenue, the situation threatens the very foundation of our economic structure. The Customs Preventive Service, on account of the serious obstacles placed in its way, has been powerless to deal with this orgy of smuggling, but we believe that, if it is the real desire of Japan to cooperate with this country, a simple move on her part will instantly put an end to such a deplorable situation.

7. "Japan has frequently professed her concern over the Communist disturbances in certain parts of this country; and such concern is well understood by us inasmuch as the effects of internal agitations in one country are bound to be felt by its neighbors, due to the close interdependence of modern nations. During the last few years the Chinese Government has waged a relentless struggle against the Red menace, and the situation has been pacified to such a large extent that we are confident in the early liquidation of the whole trouble. Under whatever circumstances, China is determined not to relinquish even temporarily her firm hand against the Communists, nor to tolerate within her territory the subversive activities of any organization aiming at the overthrow of the existing political institutions by force.

8. "During the last few years the Chinese people have concentrated their efforts on the rebuilding of their country strictly on the basis of self-salvation and self-help. We are confident in our own strength to bring about a national renaissance. We have never contemplated the possibilities of political alliance, nor have we attempted in the least manner to play off distant powers against neighboring countries. The basis of our policy is: live and let live. In other words, we want the right of national existence for ourselves, as well as the establishment of the principle of coexistence and coprosperity in the comity of nations. While we are making a supreme effort to ensure our own security, we also earnestly desire that all interested powers will jointly strive for the consolidation of peace in eastern Asia."

9. By mail to Peiping and Tokyo.

PECK

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