893.00/4220: Telegram

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

38. Morning papers publish circular telegram sent by Foreign Office to the provinces regarding present status Shantung negotiations which is described under 11 heads, namely, restoration of Kiaochou, Chinese control of customs, Japanese relinquishment of German-acquired rights, return of public property, China’s opening of Kiaochou as commercial and residential port, financing railways by international consortium (two heads), withdrawal of Japanese troops and guards, disposition Tsingtau cables and wireless station, Chinese-Japanese control of three mines opened by Germans, and lastly redemption of railway, description of which begins as follows: “After long negotiations and with mediation Messrs. Hughes and Balfour the following stage has been reached”, then follows description.

Tuchuns, Shanghai [Kiangsu?] and Hupeh have telegraphed Ministry of Communications approving arrangement for return railway. Morning papers also report these Tuchuns and also Chang Tso-lin and Tsao Kun will contribute from their Provinces 3.000,000 [Page 686] each toward reestablishing [redeeming?] railway and Tuchuns, Honan, Kiangsi and Shensi, 1,000,000 each.

Reaction setting in in favor of Liang Shih-yi as against Wu Pei-fu. Chang Tso-lin out with effective statement demanding proof of Wu’s charges against Liang with covert thrusts at Wu and President and assertion that if every new premier is attacked and driven out of office Central Government will cease to exist and Chinese Nation will perish. Statement of similar purport made by Tuchun [apparent omission]. Business in precarious condition. Shanghai Tls. 38,000,000 behind in New York settlement which is worst showing in its history. Shanghai authorities sent delegate with friendly suggestions this week to Liang Shih-yi whom they had previously opposed on the Wu Pei-fu’s charges. Liang told this delegate, who subsequently dined with me, he would not resign and that if he were not dismissed by the President he would grapple with Government’s overdrafts which are primary cause of Shanghai troubles. Addis,13 who arrives here in a few days, dined privately in Tientsin with Liang, the other guests having been named by the Peking manager of the Hongkong-Shanghai Bank.

I learn from inside and absolutely reliable source that Liang and his friends early this week contemplated program of re-unification of Nation, assembling of old Constitutional Parliament and ousting of President Hsu. These planks would all have been acceptable to Canton, and Liang told my informant he was in communication with Chen Chiung-ming, and the pile of telegrams on his table were from him. Immediate radical program seems to have been abandoned in the last few days in favor of program which will save everybody’s face …

Liang’s sick leave extended. Liang was highly incensed because President in granting first sick leave did not express usual good wishes for his speedy recovery but brusquely stated he had secured substitute. If he returns to office events will have strengthened him and weakened President.

  1. Sir Charles Addis, representative of British banking group.