The Minister in China (Johnson) to the Secretary of State
[Received June 24—4:48 a.m.]
554. Tientsin’s May 31, 6 p.m., reporting the text of Sino-Japanese truce agreement, with reference to article 4 of the agreement, my information is that situation in the evacuated area from Miyun to [Page 364] the east remains obscure. Japanese retirement continues; presence of Li Chi-chun continues to be difficult factor; Li has received at least 1,500 recruits from Manchuria. It is probable that Chinese in the course of negotiations orally agreed to take over Li. This is borne out by what Huang Fu told me, reported in my 499, June 3, 11 a.m. Since then Chinese have found that Li has more men than they thought and in addition it would appear that Japanese are supporting Li in his demand that he be given control of military police force Tangshan-Shanhaikwan area and along railway. This Chinese are naturally unwilling to do. It is estimated that there are some 30,000 Manchukuo troops between Tangshan and north of Miyun. It is also believed that Japanese plan is to keep Li on railway with Shih Yu-san north of Li and between Li and some other general further north. This plan if carried out would effectively establish a buffer between Nationalist China and Manchukuo controlled by Chinese leaders subservient to and dependent on the Japanese.
Japanese are retaining military control of railway between Tangshan and Shanhaikwan and it is believed that Manchukuo Fengtien-Shanhaikwan Railway is using presence of Japanese military to extend its control over section of railway between Tangshan and Shanhaikwan.