893.00 P.R./10

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

No. 1673

Sir: In accordance with the Department’s instruction No. 78, of October 9, 1925,61 I have the honor to submit the following summary, with index, of events and conditions in China during August, 1928:

The revolution having successfully brought most of China under the Kuomintang banner, a reintegration of the country along Nationalist lines theoretically has begun, although little progress in that direction was evident during the month under review. Expressed in a general way, the trend during August was toward the left, with Marshal Feng Yü-hsiang the cynosure of apprehensive interest on the part of the more conservative elements. By reason of his military strength and of his cynical attitude toward the hesitant functioning of the Nationalist Government, he remained, during the month, as he had been for some time, the great enigma of the future. As before, the possibility of an impending centralization of authority in his hands was envisaged, a step in that direction being seen in his mooted succession to the post of Garrison Commander of the Peking-Tientsin area, in place of General Yen Hsi-shan, who was absent in Taiyuanfu during August on the ground of illness.

The most noteworthy event of the period, from the point of view of internal politics, was the holding at Nanking of the Fifth Plenary Session of the Central Executive Committee of the Kuomintang. In the possibilities for definite achievement presented to the country’s [Page 164] leaders, this meeting constituted, as General Chiang Kai-shek expressed it, an opportunity of a thousand years. The opportunity, however, was allowed to pass. The conference assembled in discord and ended without having achieved concrete results, almost the only source of gratification involved being that it should have been possible, thanks to the mediation of General Chiang Kai-shek between the left and right wings, to hold the conference at all. No serious effort appears to have been made to arrive at a solution of the vexing problems of China. Reorganization of the transportation, educational, and judicial systems; readjustment of the moribund Salt Gabelle and of other public services; financial reforms involving a public accounting of monies, were left for a future time; nor was it found possible to devise ways and means of curbing the authority of the militarists. Evidence, in this latter relation, of the cost of military operations, was contained in the fact that of a total of disbursements of the Nationalist Government of some Mexican $150,000,000. and Taels 2,000,000. for the period June 1, 1927, to May 31, 1928, over Mexican $132,000,000. were spent for the army and navy.

Rail communications between Peking and Mukden were not resumed during August, nor was northeastern Chihli cleared of certain remnants of the Shantung-Chihli armies under Generals Chang Tsung-ch’ang and Chu Yu-pu, estimated to number 30,000 men. Minor skirmishes occurred between units of these forces and advance elements of a Nationalist expedition under General Pai Chung-hsi organized to free Chihli of these troops.

Trade and commerce in North China continued to be seriously affected by the lack of transportation facilities resulting from the seizure of rolling stock by the Fengtien Party at the time of its withdrawal into Manchuria, in June.

Kuomintang Conference

After a number of preliminary meetings held for the consideration of measures to be submitted to it, the Fifth Plenary Conference of the Central Executive Committee was formally opened at Nanking on August 10th. The opening was somewhat delayed by the lack of a quorum, certain radical members at first being unwilling to participate. Five of these seven members at length were won over, presumably through the personal intervention of General Chiang Kai-shek.

Serious friction developed, during its sessions, over the question of the abolition of the branch political councils. The radical or “Canton” group, composed of those holding no important local positions, strongly favored centralization, while the moderates and those locally influential, such as Li Chi-shen and Li Tsung-jen, favored the [Page 165] maintenance of the local branches. It was decided to close the branch political councils at the end of this year. A second important difference arose over the question of the “youth movement”, the moderates advocating the curbing of student activities and the inculcation of better discipline. It soon became apparent that these and other dissensions within the Kuomintang were sufficiently serious to jeopardize the carrying out of any genuine program of reconstruction and that General Chiang Kai-shek was being only partially successful in his attempts to maintain harmony.

The Conference closed on August 15th, the following being among the principal measures adopted:

A resolution for the Third National Congress of the Kuomintang to meet on January 1, 1929. The Law Codification Bureau recommended the formation of a committee to draft a provisional constitution for the Republic to be submitted to the Congress.
A resolution that the Central Political Council consist of 46 members to be appointed by the standing committee of the Central Executive Committee.
A resolution to proceed at once with the organization of the major branches of the Government. Under the executive branch will be established the Ministries of Foreign Affairs, Interior, Military Affairs, Finance, Education, Communications, Trade & Commerce, Agriculture & Mines. There will also be separate committees of reconstruction, emigration matters, Mongolian and Tibetan Affairs, a General Staff, a Board of Military Training, and a Military Council.
A resolution favoring unification of the military administration; adoption of a system of conscription; and reduction of the armies, so that the military expenditures will not exceed fifty percent of the annual receipts of the government; and conversion of all disbanded troops into laborers.

It is also reported that Mr. T. V. Soong’s bill for the unification of national finances was adopted. The main features of the bill are as follows:

All taxes hitherto collected by the Provincial Governments to be administered by the Central Government, the latter being responsible for the payment of all military and other expenditures belonging to it. The employment of personnel, and the regulation, administration, collection and expenditure of the revenue to be centralized.
Adoption of a national budget and the organization of a strong budget committee.

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Negotiations undertaken with the object of bringing about a reconciliation between the Fengtien Party and the Nationalists were suspended [Page 166] during the middle of July, when on the verge of completion, as a result of Japanese representations, presumably arising from the fear that a Nationalist ascendency would jeopardize Japan’s position in the Three Eastern Provinces.

An indication of the official Japanese view-point in the premises may be obtained from a statement by the Japanese Prime Minister at a general meeting of the Seiyukai, on the 9th of August. Baron Tanaka stated that, while the Japanese Government did not entertain, nor had it entertained in the past, an ambition to interfere in the domestic affairs of China, his Government, nevertheless, found itself compelled to give the most careful attention to the protection of acquired rights in Manchuria and to the maintenance of peace and order there. It followed, according to the Prime Minister’s statement, that the Japanese Government was not opposed in principle to the compromise between the Northerners and the Southerners, but that it looked with disfavor upon the extension over Manchuria of a régime incapable of exercising international good faith.

On August 13th, the Legation was informed that a compromise had been reached between the Japanese Government and the Mukden faction, whereby the latter had agreed not to fly the Nationalist flag for three months, on the understanding that there would be no objection thereto at the end of that period. It was reported that the Mukden-Nationalist accord was an accomplished fact at that time.

It is the Legation’s understanding, gained from reports emanating from Mukden, that the delays involved in the reconciliation negotiations between the Nationalists and the Fengtien Party were, in part at least, the result of an attempt to force General Chang Hsueh-liang to establish an autonomous Manchuria, in which position he would have been obliged to rely upon Japanese armed support to suppress opposition.

Mongol Uprising

During the middle of the month a series of raids took place in the Barga district of Inner Mongolia, organized by “Young Mongols” with communistic leanings. A small body of Outer Mongolian troops officered by Russians crossed the Barga frontier and clashed with Chinese troops near Arshan, and Mongol cavalry cut the western line of the Chinese Eastern Railway as far south as Barim. It is possible that there was here involved a movement instigated by Soviet agents for reasons not clear at this time, forcibly to bring about the union of Barga and Halha, or, in other words, an attempt to bring about the unification of the various Mongol tribes under the aegis of the red Mongolian Republic whose capital is at Urga.

[Page 167]

In a telegram of August 20th, the American Consul at Harbin informed the Legation62 that the movement apparently had been temporarily suppressed and that railway traffic had been resumed.

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I have [etc.]

Mahlon F. Perkins
  1. Not printed.
  2. Telegram not printed.