893.101 Tientsin/16

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

No. 3156

Sir: I have the honor to report that certain changes, which are expected to affect Sino-Japanese relations, have occurred in the Hopei Provincial Government and in the Municipality of Tientsin. These changes include five new members and three new commissioners for the Provincial Government and a new mayor for Tientsin. (Details with regard to these appointments are given in an enclosure31 to this despatch.) It is also stated by local Chinese officials that the status of Tientsin will be changed from that of a municipality under the Provincial Government to that of a special municipality under the direct control of the National Government and that the seat of the provincial government will be moved from Tientsin to Paoting, which is about ninety miles south of Peiping on the Peiping-Hankow Railway.

These changes are believed to be due (1) to Japanese dissatisfaction with General Yu Hsueh-chung, Chairman of the Hopei Provincial Government, and with certain of his subordinates and (2) to the desire of General Huang Fu, Chairman of the Peiping Political Affairs Readjustment Council and principal Chinese negotiator with the Japanese authorities over the questions affecting North China, to remove obstacles to those negotiations and to the smooth conduct of affairs in northern Hopei Province. By the appointment of new officials, those subordinates of General Yu Hsueh-chung whom the Japanese military did not like have presumably been removed. By the transfer of the provincial capital from Tientsin to Paoting, General Yu Hsueh-chung will probably be effectively restrained from interference. By the change in the status of the Municipality of Tientsin, the officials of that city will enjoy a higher rank than heretofore, which will supposedly enable them to treat more effectively with the Japanese authorities. It may be mentioned that certain Chinese officials claim that General Huang Fu was more anxious for these changes to be made than were the Japanese, due to his desire to enhance his prestige and his effectiveness in dealing with them. Whether this is true or not, it seems certain that these changes are, in general, in line with Japanese desires.

What the effect of these changes may be, except insofar as General Huang Fu’s relations with the Japanese authorities are concerned, it is impossible to state with any degree of certainty. Notwithstanding [Page 319] the improvement of the position of General Huang Fu and his followers vis-à-vis the Japanese authorities, it would seem that any agreement of importance relating to matters affecting North China would presumably have to be approved by the National Government. A part of the National Government is still, however, opposed to further concession to the Japanese. For example, I was recently informed by the local foreign Postal Commissioner that the question of resumption of postal service between Manchuria and China Proper has reached a deadlock notwithstanding the fact that it was recently believed—and the Japanese Minister so stated—that through postal communications would be resumed by the end of 1934. According to Dr. Chiang Monlin, Chancellor of the National University of Peking, who is in close touch with leading politicians, this deadlock was the result of severe opposition which arose on November 14 at a meeting of the Central Political Council of the Kuomintang, a number of its members insisting that China should not yield another step to Japan.

It is also too early as yet to attempt to foretell what effect the strengthened position of General Huang Fu will have on Japanese economic penetration in North China. The Legation is at present unable to obtain information with regard to progress in this respect. However, comment of Dr. Chiang Monlin on this subject may be of interest. Dr. Chiang expressed the opinion a day or two ago that such penetration—other than in the form of extension of trade—will probably await that time when the Japanese military decide that it is desirable to make a forward movement simultaneously in both North and South China for the purpose of (1) strengthening its prestige at home, (2) preparing for a conflict with Soviet Russia, or (3) trying to obtain financial and economic rewards from China proper. He does not believe that these forward movements will occur until after the conclusion of the London Naval Conference.

The changes reported above have caused, in conjunction with the visit to North China of General Chiang Kai-shek, a number of rumors to become current. One of these is that which was reported in despatch No. 821 of November 16 to the Legation from the Consulate General at Tientsin32 to the effect that a secret Sino-Japanese agreement had been reached by which the demilitarized area will be extended southward to include all the territory lying north of the Peiping-Liaoning Railway and to include the municipalities of Tientsin and Peiping. The Legation has been unable to obtain any confirmation of this report, although it is given some support by certain southward movements of Chinese troops in North China, by reports that the limits of the municipality of Peiping may be extended [Page 320] until they reach the border of the demilitarized area, and by various Japanese press items. Other rumors are: (1) the non-return to North China of General Ho Ying-ch’in, Minister of War and Chairman of the Peiping Branch Military Council; (2) the coming to Peiping of General Yen Hsi-shan, warlord of Shansi Province, to take General Ho’s place, a rumor now emphatically denied by various officials; and (3) an understanding by General Chiang Kai-shek with the Japanese and the various Chinese militarists of North China which will leave him free to deal with the Southwest after the elimination of the buffer communist state in Kiangsi Province.

In short, recent developments in Hopei Province indicate a strengthening of the positions of the Japanese and of General Huang Fu and a weakening of the Chinese elements in the northern part of the province which are opposed to concessions to the Japanese. These developments have naturally given rise to a considerable number of rumors of doubtful reliability.

Respectfully yours,

C. E. Gauss
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