861.77 Chinese Eastern/285
The Naval Attaché in China (Powell) to the Minister in China (MacMurray)29
Notes on Interview with Tupan Lu Jung-huan, Chinese Eastern Railway.
Tupan Lu stated that while Chinese official and public opinion of the CER incident were well known to all, and therefore not necessary [Page 256] for him to discuss, he would, however, be pleased to tell something of just what had compelled action on the part of the Chinese. These reasons were contained in his own official report to the Government.
It would first be well to clear any misunderstanding concerning Chinese “seizure” of the Chinese Eastern Railway, as steps had merely been taken to protect Chinese interests and to take back their own rights as defined in original and succeeding agreements. It was never intended to seize the railway. The Tupan stated that he had been connected with the CER for a period of five years and had been instrumental in concluding the Peking-Mukden agreement of 1924, which distinctly stated that the railway was to be a purely commercial enterprise. It was since clear to all that politics and propaganda had been introduced by the Soviets.
Lu further mentioned that the Manager of the Railway had held great powers on account of the peculiar constitution of the Board of Directors, a majority of the Board being required to check any illegal activities on the part of the Manager. In this way the Soviets were able to control finances, appropriations, and employees. Reference was made at this point to the documents found in the Soviet Consulate raid, Harbin, which clearly showed that the railway was being used for the purpose of carrying on Bolshevist propaganda in China.
Endless negotiations were carried on to obtain parity and equal rights of employees but all attempts were met with passive resistance on the part of the Soviet railway officials. Directors failed to attend meetings preventing a quorum necessary for a Board of Directors’ decision. There was flat refusal on the part of the Soviet vice-president concerning the question of employees. Many efforts were made to adjust disputes, none of which succeeded. When peaceful means failed it was necessary to use other means to protect the safety of the state. Therefore, based on protection and the carrying out of the Peking-Mukden agreement, it was necessary to act. Since the assistant manager had merely been appointed Acting Manager, the Chinese were within legal rights in their temporary appointment. He, Lu, hoped that when negotiations were held that the Soviets will appoint a new General Manager.
Although attempts had been made to interrupt traffic on the CER since the “incident” it was the Chinese desire to maintain normal conditions on the railroad. Proper precautions had been taken and the Soviet employees would not be molested so long as they do keep within their rights. Few arrests had been made although instructions had been given to accept no resignations unless reasons were sufficient to justify resignation under ordinary circumstances. Continuing, the Tupan stated that yesterday at Cbalanor30 station, 39 kilometers from [Page 257] Manchouli, a Soviet [agent?] had been caught trying to “open” a switch, one of the few acts of sabotage reported. Some 400 cars belonging to the CER have been seized and held over the border by the Soviet authorities (eastern end).
Questioned concerning other matters, Mr. Lu said that there were approximately 12,000 Soviet employees on the railway, 11,000 Chinese and a few Whites. Under the provision of Order #94, issued four years ago, Ivanoff, under the pretext of carrying out the terms of the agreement, ordered all people employed without Russian or Chinese passports to resign. This has resulted in the Whites having to obtain Chinese passports and therefore the number employed on the railway is small.
Concerning the exportation from the Northeastern provinces, the Tupan admitted that the Japanese port of Dairen would benefit by the diversion of shipping over the South Manchurian Railway. Formerly the freight was divided equally between Dairen and Vladivostok, the shorter haul being adjusted by charging equal rates over the two routes. That is, the rate per mile over the route to Dairen would be higher than the per mile rate to Vladivostok, but the total charges would be equal. So long as the present interruption of traffic continues, the Japanese, through their port of Dairen, would naturally benefit.
Captain, U. S. Navy