893.00/3385: Telegram

The Minister in China (Crane) to the Secretary of State

171. Your July 8, 5 p.m.15 Replying to the Department’s desire for background of the present situation. The Anfu Party while hitherto controlling Ministries of Finance and Communication and other important posts in the Capital has had as powerful adversaries provincial military governors notably Tsao Kun of Chihli Province, Li Shun of Kiangsu Province, Chang Tso-lin of Manchuria and their subsidiary provinces, about eight in all. Provincial troops and revenues have largely been controlled by above in spite of Anfu intrigues. Lu Yung-hsiang, military governor of Chekiang Province is an Anfu man instigating attacks on Li Shun while Anhui, Fukien, and Shantung Provinces [have] Anfu governor[s] also. Reported Japanese threaten Chang Tso-lin with trouble in Manchuria if he is not neutral. It is, of course, uncertain whether military governor coalition will continue since leading persons will probably seek to join winning side thus making operations between Peking and Paotingfu crucial. While himself a Chihli man and having personal support of powerful provincial leaders President Hsu has perhaps adopted neutral attitude between these factions. Cabinet and Parliament controlled by Anfu Party.

It is necessary to state that Japanese influence is clearly and strongly behind the Anfus and in this connection it seems very probable that the initiation of the consortium has been purposely delayed by the Japanese so that no considerations of joint action may limit them in the present crisis which they have anticipated.

Military Government at Canton has not declared its position but probably favors military governor[s], as indicated by Wu Pei Fu’s evacuation of Hunan in apparent collusion with advancing Southern General Tan; while seceders from Canton Government, Sun Yat Sen and others have been intriguing with Tuan. Position of Tang Chi-yao, military governor of Yunnan, also not declared but he has been supporting seceders against present heads of Canton Government.

No question of popular government or of constitutionality is involved in this struggle which left alone would necessarily soon terminate through lack of funds. Vice Minister of Finance states National Treasury absolutely empty. Consequently funds for present preparations must be from outside sources which are universally [Page 440]believed to be Japanese. The military governors are popularly condemned as rapacious autocrats but Anfu Party carries the stigma which is extremely strong of [pledging?] all available Chinese resources to Japan. Tuan commands great personal loyalty among prominent military leaders in the North but Wu Pei Fu is almost the only leader on either side except President Hsu who seems commands [sic] considerable popular support and approval.

Outlook for formation in the near future of a strong united democratic government appears most discouraging since China has never been more demoralized since [the] nineties. Foreign administered customs and salt administrations provide only national revenues and era of ruinous loans to provide military funds may be anticipated which Japanese will doubtless utilize as already reported. Close international cooperation in financial matters desirable as basis fundamental reconstruction. It may therefore be absurd to consider the present avowed policy of making internal peace and a united government, conditions precedent to action by the consortium.

Repeat[ed] to Tokyo.

  1. Not printed.