893.00/2929: Telegram

The Minister in China ( Reinsch ) to the Acting Secretary of State

Referring to my cable of October 30, 7 p.m.,9 December 27, 6 p.m.,10 and your January 4, 11[2?] p.m.11 The Chinese Government is in a critical position. The President desires to demobilize and disband military forces which had been accumulated for action in the South. The Government is, however, without the means necessary to defray back pay and demobilization expenses. An attempt to disband troop units without such payment would lead to rebellion, which the Government is not at present strong enough to face. Thus, the Government is [forced] by circumstances to continue a situation involving wasteful expense and the piling up of obligations.

The most reactionary and corrupt among the military governors are on the point of again effecting a combination to control the Government in their selfish interest. Their unconscionable methods have supplied them with money, giving them strength. The delay of the Southern Parliament in sending peace delegation plays into their hands. Unless financial support to the Chinese Government can become effective almost immediately, we must face the alternative of anarchy or renewed dominance of the most vicious elements among the military. Unfortunately, General Tuan is also opposed to the President’s peace policy and while both stand up for a higher level than the military bandits ruling in Anhui, Hunan, etc., they form his retinue and share with him the power conferred by Japanese loans to the War Participation Bureau.

The Chinese Government needs immediately $5,000,000 to effect demobilization and disbandment of one half the existing troops north and south. The Government is ready to effect this measure under the control of foreign military representatives to assure actual disbandment. [Page 294] Immediately, or within two months after disbandment, the Chinese Government needs a credit of $100,000,000 for the public works, roads, railways, canals and colonization. These are greatly needed in themselves but will also provide employment for disbanded troops, giving them livelihood and preventing growth of brigandage.

I have the honor to urge that [you] lay before the British and French Governments this critical situation which seriously threatens the peace of the world and prevail upon them to complete the consortium arrangements in order to make it possible for the United States in conjunction with Japan to advance the amounts needed by the Chinese Government to escape disaster and [put] Chinese affairs upon a sound basis. Even should the Internal Peace Conference not as yet have arrived at the settlement of all difficulties, it is essential that the abnormal expense and attendant evils consequent upon militarism should be lifted off the Chinese people without delay before conditions become again hopelessly involved and debauched. The execution of such a program will be welcomed by the Chinese people as God-sent relief.

It is also most important that Mr. Abbott12 should come without delay.

  1. Foreign Relations, 1918, p. 116.
  2. Post, p. 420.
  3. Post, p. 421.
  4. John Jay Abbott, Vice President, Continental & Commercial Trust & Savings Bank of Chicago, to represent American banking group in China.