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trol of Kwangsi forces was purely routine matter confirming Pai's field command of expedition into Hunan and has no special significance as believed in some quarters.

3. Sent to the Department, Peiping, Nanking, Hankow and Shanghai.

SPIKER

761.9411/40: Telegram

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

TOKYO, June 22, 1936-6 p. m. [Received June 22-9:20 a. m.]

133. 1. It is possible that the American press may report a news despatch appearing in the Japanese press today to the effect that the Soviet Ambassador again recently proposed to Premier Hirota the conclusion of a Russo-Japanese non-aggression pact which was again refused by Hirota. The facts as ascertained by the Embassy from the Soviet Embassy today are as follows:

2. Yureneff who had obtained leave of absence but whose leave has since been postponed called on the Premier at the latter's request on June 10 to say farewell. In the course of a general discussion of Russo-Japanese affairs the Premier brought up the question of the large number of Soviet troops stationed on or near the SovietManchukuo-Korean borders. Yureneff stated that a political rather than a military solution might be found for this question and recalled the fact that the Soviet Union in 1931 had proposed a non-aggression pact. The Premier shrugged the suggestion aside with the statement "we shall find some other way".

3. The Counsellor of the Soviet Embassy stated that the Soviet Union will not remove its troops from the border unless a nonaggression pact is concluded; it will in such case move the troops further from the border but will not demolish the border fortifications. 4. It is not clear why the Japanese press gives publicity to this conversation today 12 days after it was held.

893.00/13568: Telegram

GREW

The Consul General at Canton (Spiker) to the Secretary of State

CANTON, June 23, 1936-noon. [Received 12:20 p. m.]

Referring to my telegram of June 22, 4 p. m., am reliably informed by official that at joint meeting of Southwest Political Council and Kuomintang Central Executive Committee yesterday it was decided

to demand satisfactory assurances from Nanking in relation to the following points as prerequisite to Southwest's participation in plenary session at Nanking in July: (1) severance of diplomatic relations with Japan; (2) declaration that all Sino-Japanese secret treaties including Tangku truce are null and void; (3) armed resistance to increase of Japanese troops in North China in violation of Boxer Protocol; (4) mobilization of strength of entire country in readiness for resistance to Japan; and (5) cancellation of all orders of the National Government suppressing freedom of speech, of assembly and of the right to form patriotic associations.

2. Informant states that such demands are expected to make the situation much more tense and serious than heretofore since if Nanking accepts it means hostilities with Japan while if Nanking declines its insincerity is established and the Southwest will probably take independent action, the nature of which has not yet been decided but which may be expected to mark a sharp break in relations of the Southwest leaders with the Japanese. Informant is closely connected with Southwest leaders and his views are colored accordingly although hitherto his information has proved generally reliable.

3. Local government-controlled press today publishes text of a further telegram allegedly sent on June 21st to Chiang Kai Shek by Marshals Chen and Li both of whom are becoming increasingly articulate against Chiang. Telegram taunts Nanking leaders with being brave toward their brethren and cowards toward the foreign foe, urges action without delay against the Japanese and promises that Kwangtung and Kwangsi leaders will follow Chiang "through fire and water, will go at his order to any theatre of war". Chen's sudden activity in issuing personal statements to local press after long period of silence is causing comment but is believed possibly indicative of no more than pressure to support secret bargaining with Nanking.

4. Kwangsi military headquarters which for weeks has repeatedly and most emphatically denied that Japanese advisers were employed by Kwangsi yesterday informed American press correspondent that all Japanese advisers left Kwangsi several days ago and that Kwangsi defied anybody to find a single Japanese adviser in that province. Reliable mail information from Kweilin under date of June 15th showed that city was held by militia only, that all troops had gone to the North, that wholesale conscription was proceeding and that students were very active spreading anti-Japanese propaganda throughout the area.

5. Sent to the Department, Peiping, Nanking, Hankow, Shanghai. SPIKER

793.94/7996: Telegram

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

NANKING, June 24, 1936-8 a. m. [Received June 24-7 a. m.]

198. 1. Foreign Office has issued a denial of Japanese press reports that Suma gave Chinese Minister of Foreign Affairs on June 19th a "stern warning" against the "continuation of malicious propaganda" against Japan.

2. To Department, by mail to Peiping and Tokyo.

PECK

793.94/7995: Telegram

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

TOKYO, June 24, 1936-6 p. m. [Received June 24-9:25 a. m.]

139. Embassy's 111, May 23, 11 a. m. The Military Attaché was informed today in conversation at the War Department that the movement of troops for the reenforcement of the North China Garrison has been completed and that the garrison now has a strength of slightly under 5,000 men of all branches of the army. Repeated to Peiping.

GREW

893.00/13573: Telegram

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

NANKING, June 25, 1936-noon. [Received 5:20 p. m.]

203. 1. The Second Secretary was informed this morning by a responsible official of the Foreign Office that the Government's spirit of optimism in respect to the Southwestern situation has changed to one of considerable pessimism, due partly to the assumption by Chen Chi Tang on June 23 of the office of "Commander-in-Chief of the First Group Army of the Anti-Japanese National Salvation Forces" (see Canton's June 24, 9 p. m.37) and partly because of difficulties encountered in negotiations with Kwangsi. Another official of the Foreign Office told the Secretary that the Government's attempt to cause a split between Chen and the Kwangsi leaders which had been meeting success as evidenced by the adoption by Kwangtung of legal tender notes (see Canton's June 20, noon, and paragraph 2 of our 193, June 19, noon 38) has now apparently failed and General Chiang,

37 Not printed.

38 Neither printed.

who has been planning to attack Kwangsi, has therefore deemed it advisable to alter his plan and is attempting to avert a clash and look for a solution of the crisis in the forthcoming plenary session. The first mentioned informant confirmed reports (see paragraph 4 of our 200, June 24, 1 p. m.) that Kwangsi troops are between Kiyang and Hengyang and between Kwangsi and Paolang Shaoyang). He added his denial to previous official denials of Domei reports of June 21 and 22 of an exchange of ultimatums between Chiang and the Southwestern leaders (see paragraph 1 of our 200, June 24, 1 p. m.) and when the Secretary mentioned hearing a report that the Government controlled press in Canton had published the text of a telegram allegedly sent by Chen and Li to Chiang along the lines of the Domei report (see paragraph 3 of Canton's June 23, noon), he stated that he had access to all the telegrams exchanged and no such message had been received. He added that by means of anti-Japanese propaganda the Southwesterners were creating a Frankenstein's monster because the students and the people in the Southwest took this propaganda seriously and he wondered how they would be able to retreat from their position if and when a settlement with the National Government should be arranged.

2. According to the second mentioned informant, the Kwangsi leaders have now let their requirements for a settlement be known in general and of primary importance among them are (1) subsidies to meet the military and civil government expenses of the provinces and (2) the replacement of officials of the neighboring provinces with officials friendly to Kwangsi.

3. The Government appears to be undertaking a definite campaign in the press to place the Kwangsi leaders in an unpopular position both with a view to assisting its present negotiations and to strengthening itself politically if hostilities occur. The semiofficial Central News Agency reports that an association professedly "representing the vote of 30 million Kwangtungese" yesterday telegraphed to the Central Party Headquarters, the National Government and the Military Affairs Commission a demand for drastic action against the "rebellious Kwangtung and Kwangsi generals". The Central Daily News, official organ of the Kuomintang, editorially asked the Government to clarify the situation created by the Liang-Kwang," which it described as tantamount to rebellion, and urged the Government to take punitive action against the Southwestern leaders.

The Secretary was informed by a source close to high military officials that all of the Canton officers attending the Army War College

39 Not printed.

10 The two Kwang provinces (Kwangtung, Kwangsi).

of Nanking have within the last few days returned to Canton. These officers are of the grade of colonel or higher.

5. To the Department and Peiping. Repeated to Canton, Hankow. PECK

711.94/1115

Memorandum by the Chief of the Division of Far Eastern Affairs (Hornbeck)

[WASHINGTON,] June 25, 1936. In Tokyo's despatch No. 1798, April 30, 1936, Ambassador Grew reported as follows:

"On April 30, 1936, Mr. Shigeru Yoshida, recently appointed Japanese Ambassador to Great Britain, called and stated, in the course of our conversation, that the population problem in Japan was becoming increasingly difficult and that foreign countries should realize the seriousness of the situation and endeavor to help Japan in finding an adequate outlet. He said that it was principally a matter of finding outlets for Japan's trade, with opportunity for Japanese subjects to follow that trade. Upon being asked, he said that it meant peaceful penetration. Again upon being asked, he said that he thought that the 'blue-water school' (i. e., the school advocating expansion to the south) would win out eventually over the 'continental school'."

Under date May 20, 1936, Mr. Grew states in his diary that on that day Mr. Yoshida called on him and a conversation was held which covered approximately an hour. In the course of this, Yoshida stated that he was expounding a personal point of view: he said that it was necessary to solve Japan's problem of overpopulation, necessary to find some outlet, as well as important to acquire increased opportunities for obtaining raw materials and especially oil. Grew asked how Japan expected to acquire those things if they already belonged to other nations. Yoshida said he hoped that new sources of raw materials and oil could be exploited and possible contacts be made with countries which already possessed such sources. He said that Japan's thought was only one of peaceful penetration and that in developing this peaceful penetration he hoped that the United States might lend its cooperation and play the part of "honest broker". He said that the talk of war with Soviet Russia or with the United States or with Great Britain was utterly foolish and that Japan's aims and efforts were purely pacific. He wished that Japan and the United States together might solve the whole problem of permanent peace in the Pacific area.

Under date June 12, 1936, the Secretary of State made a memorandum of the conversation held between him and Mr. Yoshida on that day. Yoshida said that he was very desirous of promoting better

41

41 Foreign Relations, Japan, 1931-1941, vol. I, p. 241.

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