861.77 Chinese Eastern/285
The Naval Attaché in China (Powell) to the Minister in China (MacMurray)28
Subject: Notes on the Chinese Eastern Railway Situation obtained in Mukden and Harbin.
1. The following resume of pertinent items is forwarded for the information of the American Minister, having been obtained through observation, contacts and sources herein mentioned.
Perhaps the most outstanding impression received in Mukden and Harbin from all sources is that the present situation is not an overnight development but has been expected by the Russians and planned for by the Chinese for some months. Since January of the [Page 253] present year W. H. Donald and Boris Oustroumoff have advised the Mukden Government to demand a committee of investigation to look into the affairs of the Chinese Eastern Railway.
The following notes and information obtained from W. H. Donald. For seven months past there has been much excitement amongst the Russians in Harbin regarding the taking over of the Chinese Eastern Railway. During January and on till April this, though at that time unwarranted, was intensified, and rumors were rife that immediate action was contemplated.
The Soviet citizens were obviously frightened and in fact made no effort to conceal their fear. From April onward their fear subsided somewhat but always there was great expectancy of action on the part of the Chinese.
On their part the official Chinese were making no move to take over the railway, though they were approached from time to time by groups of Chinese with the argument that the railway should be taken over. One group agitating for confiscation of the line was particularly active in the early part of the year. They based their assurance of success and nonresistance by the Soviet on the acceptance by the Russians of previous assumption of control by China of the land department, the telephones, the Navigation service, etc.
Seeing the extent of the agitation and realizing the dangers into which the Mukden government might be forced, Donald wrote a memo in January urging care in any steps taken and argued that if conditions compelled some kind of action that the idea of confiscating the line be discarded, and that an investigation be made to ascertain if bad management and maladministration on the part of the Russians justified action. If so, then action should be confined to taking control of the line as trustees both for the Chinese and Russian interests. Oustroumoff joined in this recommendation.
After the raid on the Soviet Consulate in May the agitation was intensified.
Oustroumoff worked very hard with the head of the railway commission to have an investigation by a body comprising neutral experts before any action was taken. Memoranda were prepared showing where bad management and maladministration could be shown by analysis of the accounts issued by the railway, and also where the agreements signed at Peking and Mukden had been violated. Strenuous efforts were made by Donald and Oustroumoff to prevent any idea of confiscation taking root in the official mind. Eventually Dr. Lo Wenkan joined with them to this end.
On June second, General Kao Chi-yi, Chief of the Railway Commission of the Northeastern Provinces, Lo Wen-kan, and Boris Oustroumoff lunched at Donald’s and there the dangers of confiscation were [Page 254] impressed upon Kao, who accepted the advice that an investigation should be made, and that if any steps were taken they should be in accordance with agreements and facts, and that control alone should be assumed providing facts justified such action. Kao asked that a memorandum be prepared, and all that night Donald and Oustroumoff worked on one providing for assumption of control as Trustees in the event of investigation disclosing that such a step was justified. Prior to this Kao had agreed to try and institute inquiries but he found that his overtures to the Tupan (Lu Yung-huan) were not received with any enthusiasm—in fact were resented.
On June third General Kao was at Donald’s house and read through the memorandum, said he was leaving for Nanking the next day and would take the material with him. On June sixth Donald further discussed the matter with Kao, who left that evening for Nanking.
Kao said he had discussed the memorandum with Marshal Chang.
After the raid on the Soviet Consulate in May Marshal Chang declared to Donald that no drastic action would be taken, and no extremes would be gone to either with regard to the Soviets or the railway.
During the first week in June, Tupan Lu of the railway came to Mukden solely to insist that the CER be kept apart from the railway commission, this action being taken as a result of the inquiries that had gone to him from the Commission for information. The interviews with the Marshal were, it is reported, not as Tupan Lu wished, but he closed them by giving an ultimatum that if the CER was not allowed to continue its status outside the Railway Commission he would resign. It is reported that the Marshal then discontinued discussions, apparently acquiescing in Lu’s demands.
Lu returned to Harbin, Kao was on his way to Nanking, and shortly after, the Marshal left for Peking.
Soon after his return to Harbin Tupan Lu apparently decided that the way to retain his position on the CER and prevent any investigation was to take action to remove the Soviet plotters and endeavor to take control into his own hands. No doubt he believed this would accord with the ideas of the authorities and effect a fait accompli for which he would gain merit, though it was known that sometime before he was against taking any action of this kind.
While Marshal Chang was at Peking Lu suddenly acted and produced the situation now existing. It is certain that neither the Marshal nor Nanking knew what was contemplated, but were compelled by circumstances to accept the conditions and do their best to shoulder the responsibility.
It is known that the Marshal did not contemplate any seizure without justification, and even now he does not contemplate any action leading to hostilities. In fact, he returned to Mukden reluctantly [Page 255] from Peitaiho, not realizing the war talk that was agitating every other part of the globe but this region, but determined to have the matter settled in accordance with the Peking and Mukden agreements. Nanking, however, has the task of dealing with the Soviet[s] on the matter, and the Marshal is content to leave it to Nanking. Faced with a difficult situation [it?] is justifying the action taken on the determination to eliminate Bolshevist propaganda.
In Mukden there was a distinct and general feeling that there would be no war, that neither side wanted war. Various reasons were given why neither side could afford a war and by those few who thought conflict possible just as strong reasons were advanced why it could not be avoided. The Chinese said they would not fight and the Young Marshal made an official statement to that effect. The Japanese Consul General said he felt there could surely be no fighting and Lo Wenkan said the same thing. When I called on him on July 23 he showed me the translation of the Young Marshal’s announcement in which he stated “The Chinese Government expected the Board of Directors to select suitable men as their successors”. I asked Lo if Moscow or anyone else were informed of this at the time China seized control or had been informed since. His reply was that this announcement would serve this purpose. In Harbin I asked Chang Ching-hui the same question. He evaded, and I think, somewhat resented the question.
It seems to me that Russia must feel that she is gaining a very strong point for later negotiations by avoiding war, otherwise she would take the two railheads, Manchouli and Pogranitchnaya, and have these to negotiate with. She would have no trouble in taking possession of them.
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Reference my telegram concerning the firing at Manchouli it is now said that this report originated from Russian airplanes bombing on their own territory (presumably practice) and that there had been no firing.
- Copy transmitted to the Department by the Minister in his despatch No. 2243, August 2; received August 31, 1929.↩