861.77/2489: Telegram

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


118. I have talked over Chinese Eastern affairs thoroughly with Dr. C. C. Wang. The following is not an official expression of opinion by the Chinese Government but are Dr. Wang’s personal views which he believes are generally shared by interested Chinese and Russians, both people and officials.

As concerns criticisms of management engaged in reorganization.
Too big a staff. He will make careful investigation of this.
Concerning treatment of Russians in the Railway Zone, Dr. Wang said that although in the past Russians had harshly treated the Chinese, the Chinese officials harbor no spirit of revenge. Besides, the railway is not directly concerned in the matter as the railway is a purely commercial enterprise since the agreement of October, 1920, and such things are in the hands of the appropriate Chinese Government officials.
Policing of railway system. Munthe, who had been approached by Dr. Wang, says that he can not undertake task because of age and physical inability. Colonel Wenwhat who has served in the forces of Chang Tso-lin has been secured by Dr. Wang to assume charge of the police and to reorganize the force. A subordinate of Munthe will serve as assistant. Hereafter the regular railway paymaster will pay the police who up to now have been paid through the office of the president of the railway. The stability and efficiency of the police should be increased by this change.
Dr. Wang says he will be glad to receive specific criticisms and suggestions on any other points for the improvement of the railway management.
When I questioned Dr. Wang closely as to why China was reluctant to invite foreign nations to cooperate, he emphasized two points.
A. Relations between China and Russia. The Chinese Eastern is a Russo-Chinese enterprise. Russian rights are now in the custody of China. The present status should be retained as nearly as possible [Page 890] as the attitude of the future Russia can be foreseen with difficulty, if at all. The best course is to keep the Chinese Eastern going as it now is and to leave China unembarrassed in coming to an agreement with Russia, which will be accomplished before very long, probably within a year or two. The railway can in the meantime struggle along without financial aid even from China, although it does need money.
Unless there is sufficient reason, Chinese and Russian officials are opposed to further changes. No such reason is now apparent. To be sure, conditions are not ideal, but the Chinese Eastern is vastly better off than the Amur, Ussuri, and other railways in Siberia, and the Powers make no representation about them. During the chaotic conditions which existed a few years ago the Chinese would have welcomed foreign cooperation or even the avowed internationalization of the Chinese Eastern Railway, but at that time the Powers were silent and the situation was met by China.
It is now too late, for so many things have developed in Sino-Russian relations and in the jurisdiction of China over the railway territory. Also Chang Tso-lin is master of Manchuria and his susceptibilities can not be ignored. It is unfortunate that in China the railway matter to be considered at the Washington Conference was represented as internationalization. To Chinese and Russians, therefore, any suggestion as to the reorganization of the status and powers of the Inter-Allied Technical Board connotes internationalization, thus stirring up the greatest opposition. They ask why it is that at this late date changes are proposed when conditions are getting better and when the influence of foreign nations and of the Technical Board in the railway situation are less powerful.
If it be assumed that the interest of foreign countries in the railway is a reason for change, Dr. Wang’s reply is that these countries have no formal interest but only an interest based on the fact that through the Technical Board, not through regular railway channels, they have expended money on the railway. He points out that these funds were used not for the Chinese Eastern alone but also for the Siberian railways and that in any event the debts due to the railway for transporting the Czechs, etc., constitute an offset to these advances.
If it be assumed that the danger of Japanese control constitutes another reason for change, Dr. Wang contends that for the following reasons this danger does not exist:
The Japanese have, at least for the present, given up their extremely aggressive policy toward China. It is not likely that in the future she will encroach more than in the past. The Japanese have found out in Siberia that the use of the mailed fist is not profitable.
Japan has already advanced funds to the Chinese Eastern through the Technical Board. She is not trying to make capital of this to gain control of the railway. Why, therefore, should action of this kind in the future be feared.
The present Government of China is not subservient to the Japanese and Chang Tso-lin is distinctly hostile to the Japanese.
It has been distinctly understood in all the discussions which the Chinese authorities have had with regard to a bond [Page 891] issue, that only Chinese and Russians would be permitted to purchase such bonds, in case of issue such a provision being sure to be inserted.
Russia and China would unite to eject the Japanese even should they try to gain control. In Siberia the power of the Bolsheviki is increasing.
If worse came to worst and Japan should seize the Chinese Eastern, she could only hold it for a time and would have to withdraw as she did from Shantung.

Dr. Wang has reached the general conclusion that at least for the present the suggestion of international cooperation should not be favorably regarded by China. There was some possibility, he intimated, that if financial circumstances made it impossible to avoid a loan this feeling would change. He again recommended that the present status be continued and that time be given for Chinese and Russian anxiety and suspicion regarding internationalization to subside.

The above are statements made by Dr. Wang. I gain the impression that it is possible that the chief reason for Chinese reluctance to seek cooperation is their desire to remain free from entering into political, territorial or other arrangements as to their rights in the Chinese Eastern Railway and that the Chinese are about to enter into informal discussions with the Russians looking to an agreement, if such conversations are not already taking place.

I have informed Johnson.