The Chargé in China ( Mayer ) to the Secretary of State

No. 1204

Sir: In accordance with the Department’s Instruction No. 78, of October 9, 1925,21 I have the honor to submit the following summary of events and conditions in China during August, 1927:

Interest, during the month under review, largely centered around the activities of the Nanking Nationalist Régime, the outstanding event, in this relation, being the resignation of General Chiang Kai-shek on August 11th.

An anticipated consequence of his abrupt withdrawal was the apparent disintegration of the Nanking government which, from the beginning, had been characterized by the lack of any real cohesion and which had been weakened by military reversals and by military and political intrigue fomented by the Wuhan Régime and by Marshal Feng Yu-hsiang. Chiang Kai-shek’s resignation was in fact considered to foreshadow a union of the Hankow and Nanking governments and of Feng Yu-hsiang, although no clear cut regroupment of that nature occurred during the period covered by this report. It was likewise thought to involve a reorientation of Soviet policy in China, under the aegis of the Christian General,22 with emphasis on military rather than on communistic activity, since the latter was apparently becoming increasingly distasteful to the majority of the Chinese people. In this general relation, it also seemed certain that the effort made first at Canton and later at Hankow to set up a liberal but authoritative civil government had failed and that the militarists were again firmly in the saddle.

As indicated in a despatch of August 17th from the Consulate General in Shanghai, General Chiang Kai-shek proceeded to that port, following his resignation in Nanking. He arrived, with a special bodyguard of four hundred and fifty men, on August 13th, and left the same day for Ningpo. During his brief stay in Shanghai, he is reported to have had a long conference with Chang Ching-chiang, his chief political adviser, although he also received the visits of a number of friends, many of whom were opponents of the Nanking Régime. Various reports as to his future course of action were current, one of them being that he would remain in Ningpo until he had perfected certain unspecified arrangements with General Tan Shuchin of Fukien, who claimed control over a force of 80,000 men prepared to support Chiang in any further activities.

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In a parting manifesto which General Chiang Kai-shek submitted to a party meeting at Nanking on August 11th, he stated that he held the success of the Kuomintang cause above all else. He stated further that he was resigning to eliminate dissention (inferentially with the Wuhan group, which he felt should join with Nanking in party councils). Concluding the manifesto, General Chiang urged, first, party unity at all costs; second, an immediate united drive against Peking; and, third, the elimination of the last vestiges of Communism.

At the time of the departure of Chiang Kai-shek, it appeared that, with the possible exception of Wang Chung-hui, the General’s civilian colleagues had resigned with him. Subsequently, however, Mr. Cunningham telegraphed the Legation that Mr. C. C. Wu and the other Nanking cabinet ministers had not resigned and were reported to be functioning as usual.

Military Activity

The military activity of the month was mainly characterized by an advance on the part of the Ankuochun and its allies along the Tsinpu Railway and the Grand Canal, until, on August 25th, Sun Ch’uanfang effected crossings of the Yangtze and made a desperate but abortive attempt to take Nanking.

Pengpu fell on August 8th and Mingkuan a few days later. By August 15th, as indicated in a report of the Military Attaché, the Northerners had reached beyond the line Mingkuan-Chingkiangpu, while, along the Lunghai Railway, Feng’s detachments had been forced back on Kweiteh.

From the 15th to the end of the month, active military operations were confined in general to Anhwei and Kiangsu. The Ankuochun offensive continued down the Tsinpu Railway and Pukow was captured on August 17th. “This front,” in the words of the Military Attaché, “was then turned over to Sun Ch’uan-fang, who initiated efforts to reconquer his old territory.”

On August 23rd, the American Vice Consul in charge at Nanking, in a wireless message despatched from the U. S. S. Preble, eightyeight miles above Woosung, reported that practically all the high authorities of Nanking had then left the city, while large numbers of troops had been withdrawn from the Tsinpu line and from up river to that point. The north bank of the Yangtze being held at the time by Northern troops, the military authorities at Nanking were concentrating large forces there in preparation for open hostilities, should the Northerners cross the river. Active military operations in the vicinity of Nanking appeared probable; the water front from Kiangyin to Wuhu was guarded by Southern soldiers; and martial law had been declared throughout the region.

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As already stated, a part of Sun Ch’uan-fang’s forces did in fact succeed in crossing the Yangtze on August 25th, and there then ensued a week of very heavy fighting, the invaders coming closest to Nanking on August 31st, and being driven back across the river, during the first days of September, with very considerable losses.

. . . . . . . . . . . . . .

Conditions in Hankow

The retirement of Chiang Kai-shek, during the middle of August, seemed momentarily to infuse new hope into the Hankow Régime, but no very tangible results came of it.

Prior to the General’s withdrawal, the American Consul General at Hankow, in a telegram of August 12th, had reported that the Hankow government was as near a financial and political collapse as it was possible to be, short of complete disintegration. Only the military, whose numerical strength had been considerably impaired as a result of the defection of rebellious troops, remained relatively powerful. Former leaders were departing every day, their destination frequently not being disclosed, due to fear for their lives.

In a telegram despatched shortly after Chiang Kai-shek’s resignation, Mr. Lockhart stated that, as a result of it, the Chinese populace of Hankow was thrown into a very unsettled state of mind, not knowing in which way it would be swept by the changed political, military, and financial currents, but feeling that far-reaching consequences were certain to ensue. T’ang Sheng-chih was at that time making preparations to oppose Feng Yu-hsiang, who had advanced some distance down the Peking-Hankow Railway. The money market was completely demoralized, Central Bank notes being quoted at 2.35 for one silver dollar, and Treasury Notes being unacceptable at any figure. The whereabouts of Mr. Eugene Chen was unknown.

On August 19th the Hankow Nationalist government and the central Kuomintang made a joint proclamation ordering the removal of the capital to Nanking. On the same day, the Hankow Ministry of Finance issued an order that all inland taxes and the two and one-half per cent and one per cent surtaxes were to be paid in hard silver, which, in effect, constituted a repudiation of Central Bank notes and of all Treasury Certificates. Inasmuch as the embargo on silver was still in force and since there was an acute shortage of silver dollars, the new order worked great hardship on both Chinese and foreign merchants.

On August 23rd, a responsible officer attached to the Hankow Ministry of Foreign Affairs informed the Consul General that Eugene Chen had either left Shanghai or would do so in a day or two for Geneva “to explain the aims of the Nationalist government to the [Page 25] League of Nations”, and that he had not resigned, but had been given a three months’ leave of absence.* Mr. Lockhart’s informant added that the government would not be removed to Nanking until Hsuchowfu was retaken or until the military situation at Nanking had cleared.

On August 27th, the Hankow government claimed to possess a definite assurance from Feng Yu-hsiang that he would not invade that area, this being substantiated by his consent to effect a partial restoration of traffic on the Peking-Hankow Railway. Preparations under way at that time tended, furthermore, to confirm the announcement of a contemplated joint drive northward by Feng Yu-hsiang and the combined Hankow and Nanking factions. However, this movement, as has already been stated, was not undertaken on any significant scale, during August.

At the end of the month, certain preliminary arrangements had already been initiated for the removal of the government offices to Nanking while conferences continued between Nanking and Hankow leaders at Kiukiang. Practically all the government agencies at Hankow, including the post offices, continued to accept only silver dollars. A slight improvement in the food situation was noticeable, but no improvement in currency matters or in the employment problem.

. . . . . . . . . . . . . .

I have [etc.]

Ferdinand Mayer
  1. Not printed.
  2. Feng Yu-hsiang.
  3. According to local press reports of the end of the month, Eugene Chen and Mrs. Sun Yat-sen reached Vladivostok on August 29th, on their way to Moscow. [Footnote in the original.]