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

No. 2582

Sir: In connection with my despatch No. 2572 of December [March] 7th,37 I have the honor further to report concerning the Shanghai Peace Conference. As the daily progress of affairs at Shanghai is reported to the Department by the Consul General there, who also forwards to you copies of the Intelligence Bulletins published by the “Constitutional Government”, I shall confine myself to brief general comment. The personal relation between the Northern and Southern delegates composing the Conference seems to be one of cordiality and confidence. This is particularly true of the two principal delegates, Mr. Tang Shao-yi and Mr. Chu Chi-chien. A certain feeling of solidarity seems to have grown up which is very healthy and bodes good for a continued future understanding.

As Chinese political affairs are intensely complicated, it was not surprising that the Conference approached the actual problem somewhat gingerly. It must be recognized that the militarists, North and South, control a very strong organization. While they are not formidable from a purely military point of view, their control of finance and the fact that vast contingent[s] of troops are dependent [Page 318] upon them and would cause at least local trouble and disturbances if they are not effectively handled, makes the question of the military the principal and at the same time the most difficult one. There are great differences and rivalries among the military; if the matter were not handled carefully, enough of the military might form a combination to offer resistance to any reform proposed. While it is easy enough to see what the reform should be: namely, a radical reduction and reorganization of the army, with elimination of the hopelessly corrupt and inefficient, yet the execution of this universally desired reform requires: in the first place, financial support; and in the second, the selection from among military leaders of those who can be usefully retained and formed into a new and better army organization. In a country where things go so much by custom and where so much consideration has to be taken of livelihood, personal relations, etc. this is a formidable task which may in the end require the authority of friendly financial support from without.

The Conference which had been busying itself with preliminaries was suddenly brought to a standstill on March 1st when it adjourned in protest against the disregard of the armistice by the Northern forces in Shensi. That the Northern forces were actually to blame in this matter is indicated by independent information which both the British and this Legation have received; particularly of the fact, that the Southern headquarters in Shensi, at Sanyuan were attacked and that the “constitutionalist forces” were surprised—having relied on the armistice. The above conclusion is also borne out by the fact that the Northern delegates had sent in their resignation during the last week in February as they could not satisfactorily account for the Shensi situation to the Southern delegates.

Another strong source of dissatisfaction on the part of the Southern delegation is the continued development of the forces which were originally enlisted by the War Participation Bureau. This matter has taken on a very considerable complexity. The name of the War Participation Bureau itself has been changed into National Defense Bureau. The three divisions originally raised by it are under the command of General Ching Yun-peng who acts in the double capacity of Minister of War and representative of the National Defense Bureau of which General Tuan is the head. Further troops which were enlisted for the War Participation Bureau to the number of four brigades (it is stated that they are now being increased to eight brigades) are under the command of General Hsu Shu-chen (little Hsu), whose organization is known as the Northwest Defense Bureau. He, also, is an associate and follower of General Tuan, but the relations between him and General Ching contain a certain rivalry.

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The funds resulting from the Yen 20,000,000 War Participation Loan are carried in the name of General Ching Yun-peng. General Hsu solemnly assured me that he was taking no foreign money but was supporting his troops with Chinese funds. I am, however, informed that General Hsu laid aside several million dollars from former Japanese loans which he is now using: besides he is levying upon the corrupt Northern Tuchuns, who are trembling somewhat for their positions and are hoping for support from him. He, himself, assures me that his troops and those of General Ching Yun-peng are the only good troops in China; that the others are hopeless because they will not obey a command unless they are especially rewarded each time and unless it suits them in general; and yet that they would cause a general uproar should the Government desire to disband them without having at hand a reliable force to inspire them with wholesome respect. He avows the greatest devotion to President Hsu and a desire to obey the Government and to make its command valid. The people in South and Central China and, largely North China as well, however, seem to consider General Hsu the greatest danger to China. They credit him with boundless ambition and consider that he is building up this new force merely for the purpose of again attempting General Tuan’s policy of military coercion against the South and of securing supreme power for General Tuan and himself. It is against him that the objections made by the Shanghai Peace Conference are chiefly directed and yet it will be seen from the above that he is so intrenched that even a cancellation of the War Participation Loan and the dissolution of the National Defense Bureau would not touch him. These facts are now becoming known and attacks are more directly leveled at this General and his troops. The disposal of this question will be first on the program when the Peace Conference resumes its work.

There are indications that a brief intermission in the labors of the Government is not unwelcome to the chief delegates. It is believed that they each have certain recalcitrant elements to take care of and that the intermission will give them a chance to consolidate their support. The best opinion is generally that the program for army disbandment and re-organization should be taken up immediately upon the re-convention of the Conference.

Notwithstanding the formidable difficulties which I have referred to above, it is believed and is quite certain, that if the Conference should lay down a policy for the President to execute, which would provide a real remedy of the situation, the execution would be feasible if the necessary funds could be obtained without delay; because it would then be possible immediately to lay off the unnecessary soldiers and to form a nucleus of efficient generals to carry [Page 320] through the new organization. The disbandment cannot begin before funds are available because under immemorial Chinese custom, soldiers will not yield up their arms before arrears due them are paid.

The delegates at Shanghai seem to be convinced that this is the main question which must be taken up immediately. It seems, however, that Mr. Tang Shao-yi will insist, as the first step, upon the disbandment of the War Participation troops, particularly those of General Hsu. This would be hitting at the center of the military system and a hard fight may be expected.

The feeling is very strong among the representatives at Shanghai, as well as throughout the country, that the Japanese military organization is in no sense abating its support of the Northern militarists. The Hara Cabinet has indeed announced that it would discontinue the furnishing of arms and ammunition. But it is well known that the ammunition is already furnished and is in the hands of the Northern militarists, particularly those connected with the War Participation Bureau, which is sufficient to give them an enormous advantage should hostilities be renewed. The Hara Cabinet has declared that it could not modify the War Participation Loan but it has caused the Japanese Minister to express the opinion that it might be well for the Chinese Government, under present circumstances, not to draw these funds. It was, however, generally understood that no more serious objection would be raised to the use by the militarists of the funds in question; and until the associated Ministers had taken up the Japanese expression and emphasized it, no attention seems to have been given to it. The opinion has been expressed to me by several representative Chinese that irritating obstacles such as the breach of the armistice in Shensi have covertly received encouragement from the Japanese militarists and that, in short, the plan is to delay the Conference and meanwhile to build up a strong military force in North China, dependent upon Japan with which to defeat any policy of the Conference that may be hostile to the maintenance of militarist ascendency in China.

In the conferences of the associated Ministers, the Japanese Minister has opposed saying anything to the North concerning the Shensi armistice, on the ground that it would be interfering in internal affairs. Before the people of China, the Japanese can purge themselves of the suspicion of giving a friendly hand to the militarists for the creation of a dependent militarist system in China, only through a frank and candid policy of giving full moral support to the Shanghai Conference and abstaining from encouraging any condition that would constitute an obstacle to its work.

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I have the honor to enclose copies of a memorandum on the Peace Conference which I drew up on February 8th as a summary of my judgment and opinion as it was at that time and as they still continue in essence.38

There are also enclosed the following Consular reports:38

  • Despatch No. 558, February 10th from Nanking,
  • Despatch No. 66, February 18, from Canton,

and newspaper articles containing more or less authoritative statements concerning the above matters.38

I have [etc.]

Paul S. Reinsch
  1. Ante, p. 310.
  2. Not printed.
  3. Not printed.
  4. Not printed.