File No. 893.01/101

Minister Reinsch to the Secretary of State


The state of uncertainty continues. Revolutions have no policy but to oust Yuan. The Government, on account of the stoppage of the salt income through the action of the Japanese bank and generally diminished revenue, will be without funds within a month; a very serious situation threatens unless unity and reorganization can be effected without delay. Reports from all parts indicate Japanese are actively encouraging revolution, for example, advising Fukien to declare independence. Assassinations and looting carried on in the name of revolutionists are not reassuring. The army of the President is holding out well but its behavior when funds are exhausted is uncertain. In Peking the struggle between Anhui and Canton parties continues. Military governor of Kiangsu assumes neutral position.