893.00/11040: Telegram

The Consul at Nanking (Adams) to the Secretary of State

25. As of interest, I respectfully submit the following estimate of certain conditions and possibilities in middle China from the coast to Ichang:

There is amongst higher civil officials in Nanking an appreciation of the menace contained in existing widespread banditry and the so-called communist army, such as that temporarily disturbing Changsha. But I did not find evidence that the military authorities in Nanking consider disturbances such as that at Changsha of first importance as an immediate military problem.

It is reasonable to expect an increased expression of lawlessness in territories denuded of regular garrisons by war concentration, but I believe that when the troops now fighting return to their customary garrisons they may themselves be a source of danger. Every resource is now being strained by the Government to keep the troops paid, but, when the present military emergency is over, there is bound to be the relaxation of exhaustion in the financial efforts of the Government, assuming that the present Government will continue to exist. The [Page 26]Treasury of the Government has been subjected to enormous military drains during recent months. When this is considered in conjunction with the financial position of the Government on June 30th, 1929, as described in my political report for March,23 some idea of the present financial straits of the Government may be obtained. Failing to receive their pay from exhausted provincial and national treasuries, the troops will in most places be confronted with an impoverished countryside. The soldiers will also have been rendered savage by unusually prolonged campaign hardships. If the temper of wounded soldiers already returned from the war fronts is an indication of the state of mind of the armies concentrated in Honan and Shantung, there is some cause for uneasiness.

There is now promise of excellent crops throughout the whole of the Yangtze Valley and adjacent agricultural regions but lawlessness in large areas and military operations threaten to curtail harvesting and marketing of the main crops that will mature in late August and September. Such curtailment would be particularly unfortunate. It would minimize recovery from starvation conditions existing in large areas. It would also increase Chinese purchases with depreciated silver currency of foodstuffs from foreign territories with currencies having a fixed relation to gold. Further increase in cost to Chinese of food would give additional impetus to disorders.

Without taking into account the possibilities of disturbance that would be involved in the collapse of the National Government, I should say that the extent to which the Yangtze Valley regions may reasonably be expected to return to comparative order in the near future depends considerably upon:

(1)
The extent to which farmers are able to harvest their crops, and
(2)
The ability of the responsible military leaders after the termination of the present war to pay and maintain discipline amongst troops affected by war hardships.

Legation informed.

Adams
  1. Not printed.