I chanced to meet the Administrative Vice Minister at a social function
held at the Japanese Consulate General recently and he told me that he
wished to have another private conversation with me within the next few
days. This conversation, at Mr. Tang’s request, took place in the
reception building of the Ministry of Foreign Affairs on February 14,
1934. There is enclosed herewith a memorandum of that conversation which
I dictated immediately on my return.
On one or two previous occasions Dr. Wang Ching-wei, President of the
Executive Yuan and Acting Minister for Foreign Affairs, has told me that
Mr. Tang, the Vice Minister, has held these conversations with me at
his, Dr. Wang’s, instruction. There is, therefore, reason to think that
Dr. Wang was responsible for the confidential conference which I now
have the honor to report and that Dr. Wang’s motive in arranging it was
to maintain active and intimate contact with the American Legation.
As the Department is aware, Vice Minister Tang is popularly regarded as
“pro-Japanese”. Nevertheless, the tone of his conversation gave me the
impression that he is pro-Japanese only to the extent of recognizing the
unavoidable importance of Japan’s attitude toward
[Page 40]
China and Japan’s ability to carry out its
policies. I did not receive the impression that Mr. Tang is any the less
patriotic because of these convictions.
[Enclosure—Extract]
Memorandum by the Counselor of Legation in
China (Peck)
[Nanking,] February 14, 1934.
. . . . . . . . . . . . . .
The mention of North China led Mr. Tang to speak of China’s relations
with Japan. He observed that to understand Japan’s attitude toward
China, one must take into account two or three facts. One of these
facts is that subordinate military officers in the field often take
the initiative and sometimes do not carry out faithfully the orders
they receive from their superiors. Moreover, there are many
disorderly Japanese characters, “Ronins”, smugglers, etc. These
military subordinates and adventurers sometimes lead Japan further
than the Japanese Government has determined in advance to go.
A more important fact, however, is that the Japanese activities in
Manchuria were, in effect, a manifestation of a peaceful revolution
in Japan. The Japanese Army felt that Japan was being menaced by
financial exploiters and by other economic and political factors.
The Army wished to eradicate these dangers, but if it attempted to
do so within Japan itself, it might be necessary to remove the
Emperor. This the Army did not desire to do. The exploits of the
Army in Manchuria were deliberately entered into as a means of
increasing the prestige of the Army and obtaining popular
leadership, without resorting to an actual revolution in Japan
itself.
It is not necessary to suppose that Japan has hostile intentions
toward China, since, as has been seen, the Japanese Army has its own
internal ends in view in taking the steps which it has taken in
Chinese territory.
The circumstance that Japan’s aggressive acts toward China have an
internal objective does not, of course, make the situation any
easier for China. Mr. Tang said that Japanese friends had pleaded
with him for friendly sentiments on the part of China toward Japan.
Mr. Tang remarked to them that it would be impossible for China to
entertain a friendly sentiment toward Japan, so long as Japan
remained in occupation of Chinese territory. If Japan really desired
China’s friendship, it should remove the factor which rendered such
friendship impossible.
[Page 41]
Mr. Tang said that he had pointed out to these same Japanese that it
would be quite useless from Japan’s standpoint, for China to
“recognize” Manchukuo, as the Japanese desired. The creation of
Manchukuo had placed Japan in a dangerous position, internationally,
but this danger would not be obviated by China’s recognition of
Manchukuo. Japan’s real danger, arising from the creation of the new
state, is caused by the fear and misgivings aroused in the United
States, in Soviet Russia, in Great Britain and other countries by
Japan’s action. This fear would in no way be allayed if China were
to recognize Manchukuo.
Mr. Tang invited Mr. Peck’s attention to the fact that China had
never conceded any legality to Japan’s aggressive actions. The
National Government is determined, he said, never to take any such
action and even to enter into discussions with Japan, in view of
Japan’s objectives, is an impossibility.
With specific reference to the anti-Japanese boycott, Mr. Tang said
that in point of fact this boycott had practically ceased, although
not in theory. The increase in the import tariff which went into
effect in May, 1933, was aimed particularly at Japan. Mr. Tang
returned a non-committal reply when Mr. Peck asked whether another
early increase in the import tariff was contemplated. He said merely
that further increase of the import tariff would be of doubtful
advantage, since it had been found that China’s industries did not
respond to such protective measures, smuggling increased, and a
greater burden was placed on the consuming public, while even the
anticipated increase in revenue often failed to materialize.
Commercial relations between Japan and China are, moreover, not a
matter of indifference to China, since China would be very unwilling
to lose the market in Japan for various Chinese exports which are
important in amount.
Mr. Tang said that China would be very glad to be freed from such
degree of economic dependence on Japan as arose from its present
relations with that country. This could come about only if other
countries were able and willing to absorb the Chinese exports which
are now sold in Japan. He pointed out that the balance of trade and
commerce with Japan is now in favor of China. In the matter of
commerce with the United States, on the other hand, the balance of
trade is greatly in favor of the United States and he particularly
wondered whether anything could be done to alter that situation,
since it now seems to be generally recognized that profitable
commercial relations between two countries are predicated upon an
exchange of approximate equality between the exports of one country
to the other and its imports from the same country.
[Page 42]
Mr. Tang said that the Chinese Government is very anxious to increase
the strength of China’s relations with European and American
countries and at the present time such relations are generally much
more important in their economic aspects, rather than in their
political aspects. The strengthening of economic relations which he
mentioned would, he pointed out, free China from a great deal of its
present dependence on Japan. He observed that in the negotiation of
a new commercial treaty with the United States, these subjects would
doubtless receive particular attention.
Mr. Peck agreed with this supposition, and inquired whether the
Chinese Government regarded the negotiation of a new commercial
treaty with the United States as a very pressing matter.51 Mr. Peck said that in his opinion there were reasons
for not undertaking this task at the present moment but for
deferring it to a more suitable time. Mr. Tang said that the Chinese
Government did not consider it urgently necessary to negotiate a new
treaty at an early date, but the Government felt that there were
certainly aspects of the existing treaty which should be modified,
such as extraterritoriality, etc.
There ensued some discussion of the matter of Chinese exports to the
United States, such as silk, tea, wood oil, hides, bristles, etc.,
and Mr. Tang expressed regret that Japan seemed to have captured the
market in the United States for Chinese silk and tea. Mr. Peck
referred to the attempts of the Silk Association of America for some
years to improve the methods of Chinese silk production, in order to
make Chinese raw silk more suitable for America’s needs. Mr. Tang
said that matters of that sort, i. e. improving and maintaining
quality of Chinese exports, such as silk, could certainly be
attended to by the Government, especially if it solicited the
assistance of Chinese financiers.
Mr. Peck suggested that Mr. Tang converse on these subjects with Mr.
Julean Arnold, American Commercial Attaché at Shanghai.
