893.00/12513: Telegram
The Counselor of Legation in China (Gauss) to the Secretary of State
[Received November 11—5:47 a.m.]
847. My 844, November 9, 11 a.m. Following from the Minister at Nanking dated November 10, 3 p.m.:
“I have had conversations with Wang Ching-wei and Chen Kung-po. From statements made by them and others situation appears to be as follows:
Central Political Council became excited over rumors of settle-! ments either contemplated or arrived at between Huang Fu and Okamura at Peiping and forced Wang Ching-wei and Chiang Kai-shek to reaffirm policy of avoidance of trouble and no negotiations capable of interpretation as recognition of Japanese position in Man-churia. Wang Ching-wei stated that Government intended to pur-sue discussions with extreme caution. Chen Kung-po stated that no settlements could be reached until a commission already appointed, consisting of Communications, Foreign Affairs, Railways and Finance, had come into existence and could consider and approve settlements.
I infer that Chinese leaders are convinced that hostilities between Japan and Soviet Russia are inevitable in the near future and are confronted with the question of China’s conduct in the presence of such hostilities, which they realize must be conducted or at least based [Page 452] on Chinese soil. They realize that China stands to lose whatever the outcome and must find some method to reduce their loss. It would appear that they intend to prolong discussions with the Japanese avoiding settlements in the hope that hostilities will still find questions unsettled and no commitments made. I am informed that Sino-Soviet negotiations regarding nonaggression agreement are deadlocked over insistence of Chinese upon a clause committing Soviet Russia to nonrecognition of “Manchukuo”. Soviets are insisting on elimination of such clause.”