793.94/8105: Telegram
The Ambassador in China (Johnson) to the Secretary of State
410. Reference paragraph 3 of Embassy’s 405, August 17, 5 [4] p.m.85
- 1.
- The Japanese Ambassador visited Peiping from the evening of August 18th to the afternoon of August 20th. He is now in Tientsin to confer with Japanese diplomatic and military officers, including three representatives of the Ministries of Foreign Affairs, Army and Navy.
- 2.
- The Japanese Ambassador informed foreign pressmen yesterday that he had expressed the hope to Sung Che Yuan that Sung would suppress Communism in his two provinces; that he had discussed economic questions in principle with Sung; that he had advised Sung to ask for financial and technical assistance for Japan in the “exploitation of resources”; that Sung had agreed with these views; that he (the Japanese Ambassador) hoped that it would be possible to use Chinese capital although Japan would be prepared to help; that the present conditions in North China were tending toward stability; that he would inform the National Government that the Economic developments of North China was purely a local question; that the National Government was understood to be considering the question of lowering tariffs; and that Japan was prepared if necessary to open negotiations with the National Government whether or not it accepted Hirota’s three principles.
- 3.
- A member of my staff in confidential conversation with the competent Third Secretary accompanying the Japanese Ambassador received certain information which is contained in paragraphs 4 and 5, together with certain inferences based on that conversation.
- 4.
- Japanese diplomats are apparently pessimistic about the future of Sino-Japanese relations. They would like to see two or three agreements [Page 270] of an economic character entered into, not so much for the economic advantages involved, as economic development of North China will be a liability for Japan, but for the purpose of improving the feeling of the people. Chiang Kai Shek is expected to make agreements of an economic nature with the Japanese. He is strong enough to do this because his success in the Southwest weakens opposition to such agreements. The situation in Suiyuan not known to Japanese diplomats, but the Japanese Army definitely intends for strategic reasons to extend its control over Inner Mongolia. It is feared that if the Kwantung army acts in Suiyuan in the near future it will react unfavorably on Sino-Japanese negotiations with regard to North China. The question is asked whether Chiang could not enter into some agreement with the Japanese whereby the aid of the Japanese military with respect to Inner Mongolia could be satisfied and legitimatized. It is evident that the diplomats and the military are not yet united.
- 5.
- Not one pound of Changlu salt has yet been shipped to Japan because the Chinese do not yet refine the salt sufficiently and because the tax is still too high.86 The route of the proposed Shihkiachwang-Tsangchow Railway has not yet been decided on. The development of iron in North China is not regarded hopefully at present because the ingredients needed for the manufacture of steel are too widely scattered and communications are lacking.
- 6.
- It seems possible to this Embassy that the Japanese Ambassador hopes that he can persuade the Japanese military to remain quiet for the time being and to suspend political activities, such as those looking toward an amalgamation of Sung’s and Han’s regimes, in order that he may effect some agreements of an economic nature, perhaps including reduction of the Chinese tariff, which will improve the general Sino-Japanese situation. It is not known whether the successful carrying out of such a program will be permitted by the Japanese military and the opponents of Chiang Kai Shek’s compromise.
By mail to Tokyo.
Johnson