793.94/6829
The Chargé in China (Gauss) to the Secretary of State
[Received January 16, 1935.]
Sir: I have the honor to enclose a copy of a memorandum50 of a conversation which I had on December 17, 1934, with Lieutenant-Colonel Walter S. Drysdale, Military Attaché, when he informed me that, according to a man whom he considers one of his best sources of information, the Japanese had recently made a series of three demands or proposals to the Chinese and that these proposals were: (1) extension of the demilitarized area in North China to the Peiping-Suiyuan [Page 342] and Peiping-Liaoning Railways; (2) “military cooperation” by the appointment of at least five Japanese military advisers to each of the coastal provinces; and (3) “economic cooperation” by a Japanese loan for projects in the Yangtze River Valley and another loan for projects in the Northwest.
As the Military Attaché was not inclined to reveal the name of his informant, it is difficult for the Legation to evaluate this report. There have been, however, for some time rumors that the Japanese desired an extension of the demilitarized area and it has been thought that such demilitarization might be one of the reasons for the recent decision to transfer the capital of Hopei Province, together with its Chairman, General Yu Hsueh-chung, from Tientsin to Paoting. There have also occurred some troop movements which support this report to some extent. During the past two months, 8,000 troops, stationed northwest of Peiping and just north of the Peiping-Suiyuan Railway, who were formerly under General Chang Hsueh-liang, were transferred to Hankow, Hupeh Province, and another 8,000 troops, stationed at Hwailai, Chahar Province, on the Peiping-Suiyuan Railway, who were also formerly under Marshal Chang Hsueh-liang, were transferred to Honan Province, while apparently no new Chinese troops have been sent into this area during the same period. With regard to the alleged proposal dealing with Japanese loans, the Legation, as it has already reported, has heard reports that the Japanese were desirous of “economic cooperation” with the Chinese in China Proper, especially in North China. The Legation, however, has no exact knowledge of how this “economic cooperation” is progressing, although it is presumed that it will be accompanied with considerable use of Japanese money. With regard to the alleged proposal that Japanese military advisers be appointed to each of the coastal provinces, the Legation is without information.
Respectfully yours,
- Not printed.↩