793.94/6567

The Counselor of Legation in China (Peck) to the Secretary of State

Sir: I have the honor to refer to my despatch of November 15, 1933,50 entitled “Sino-Japanese Relations; Interviews with Tang Yu-jen, Administrative Vice Minister for Foreign Affairs” with which despatch I enclosed accounts of conversations with Mr. Tang held by the American Minister and by me.

I chanced to meet the Administrative Vice Minister at a social function held at the Japanese Consulate General recently and he told me that he wished to have another private conversation with me within the next few days. This conversation, at Mr. Tang’s request, took place in the reception building of the Ministry of Foreign Affairs on February 14, 1934. There is enclosed herewith a memorandum of that conversation which I dictated immediately on my return.

On one or two previous occasions Dr. Wang Ching-wei, President of the Executive Yuan and Acting Minister for Foreign Affairs, has told me that Mr. Tang, the Vice Minister, has held these conversations with me at his, Dr. Wang’s, instruction. There is, therefore, reason to think that Dr. Wang was responsible for the confidential conference which I now have the honor to report and that Dr. Wang’s motive in arranging it was to maintain active and intimate contact with the American Legation.

As the Department is aware, Vice Minister Tang is popularly regarded as “pro-Japanese”. Nevertheless, the tone of his conversation gave me the impression that he is pro-Japanese only to the extent of recognizing the unavoidable importance of Japan’s attitude toward [Page 40] China and Japan’s ability to carry out its policies. I did not receive the impression that Mr. Tang is any the less patriotic because of these convictions.

Very respectfully yours,

Willys R. Peck
[Enclosure—Extract]

Memorandum by the Counselor of Legation in China (Peck)

. . . . . . . . . . . . . .

The mention of North China led Mr. Tang to speak of China’s relations with Japan. He observed that to understand Japan’s attitude toward China, one must take into account two or three facts. One of these facts is that subordinate military officers in the field often take the initiative and sometimes do not carry out faithfully the orders they receive from their superiors. Moreover, there are many disorderly Japanese characters, “Ronins”, smugglers, etc. These military subordinates and adventurers sometimes lead Japan further than the Japanese Government has determined in advance to go.

A more important fact, however, is that the Japanese activities in Manchuria were, in effect, a manifestation of a peaceful revolution in Japan. The Japanese Army felt that Japan was being menaced by financial exploiters and by other economic and political factors. The Army wished to eradicate these dangers, but if it attempted to do so within Japan itself, it might be necessary to remove the Emperor. This the Army did not desire to do. The exploits of the Army in Manchuria were deliberately entered into as a means of increasing the prestige of the Army and obtaining popular leadership, without resorting to an actual revolution in Japan itself.

It is not necessary to suppose that Japan has hostile intentions toward China, since, as has been seen, the Japanese Army has its own internal ends in view in taking the steps which it has taken in Chinese territory.

The circumstance that Japan’s aggressive acts toward China have an internal objective does not, of course, make the situation any easier for China. Mr. Tang said that Japanese friends had pleaded with him for friendly sentiments on the part of China toward Japan. Mr. Tang remarked to them that it would be impossible for China to entertain a friendly sentiment toward Japan, so long as Japan remained in occupation of Chinese territory. If Japan really desired China’s friendship, it should remove the factor which rendered such friendship impossible.

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Mr. Tang said that he had pointed out to these same Japanese that it would be quite useless from Japan’s standpoint, for China to “recognize” Manchukuo, as the Japanese desired. The creation of Manchukuo had placed Japan in a dangerous position, internationally, but this danger would not be obviated by China’s recognition of Manchukuo. Japan’s real danger, arising from the creation of the new state, is caused by the fear and misgivings aroused in the United States, in Soviet Russia, in Great Britain and other countries by Japan’s action. This fear would in no way be allayed if China were to recognize Manchukuo.

Mr. Tang invited Mr. Peck’s attention to the fact that China had never conceded any legality to Japan’s aggressive actions. The National Government is determined, he said, never to take any such action and even to enter into discussions with Japan, in view of Japan’s objectives, is an impossibility.

With specific reference to the anti-Japanese boycott, Mr. Tang said that in point of fact this boycott had practically ceased, although not in theory. The increase in the import tariff which went into effect in May, 1933, was aimed particularly at Japan. Mr. Tang returned a non-committal reply when Mr. Peck asked whether another early increase in the import tariff was contemplated. He said merely that further increase of the import tariff would be of doubtful advantage, since it had been found that China’s industries did not respond to such protective measures, smuggling increased, and a greater burden was placed on the consuming public, while even the anticipated increase in revenue often failed to materialize.

Commercial relations between Japan and China are, moreover, not a matter of indifference to China, since China would be very unwilling to lose the market in Japan for various Chinese exports which are important in amount.

Mr. Tang said that China would be very glad to be freed from such degree of economic dependence on Japan as arose from its present relations with that country. This could come about only if other countries were able and willing to absorb the Chinese exports which are now sold in Japan. He pointed out that the balance of trade and commerce with Japan is now in favor of China. In the matter of commerce with the United States, on the other hand, the balance of trade is greatly in favor of the United States and he particularly wondered whether anything could be done to alter that situation, since it now seems to be generally recognized that profitable commercial relations between two countries are predicated upon an exchange of approximate equality between the exports of one country to the other and its imports from the same country.

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Mr. Tang said that the Chinese Government is very anxious to increase the strength of China’s relations with European and American countries and at the present time such relations are generally much more important in their economic aspects, rather than in their political aspects. The strengthening of economic relations which he mentioned would, he pointed out, free China from a great deal of its present dependence on Japan. He observed that in the negotiation of a new commercial treaty with the United States, these subjects would doubtless receive particular attention.

Mr. Peck agreed with this supposition, and inquired whether the Chinese Government regarded the negotiation of a new commercial treaty with the United States as a very pressing matter.51 Mr. Peck said that in his opinion there were reasons for not undertaking this task at the present moment but for deferring it to a more suitable time. Mr. Tang said that the Chinese Government did not consider it urgently necessary to negotiate a new treaty at an early date, but the Government felt that there were certainly aspects of the existing treaty which should be modified, such as extraterritoriality, etc.

There ensued some discussion of the matter of Chinese exports to the United States, such as silk, tea, wood oil, hides, bristles, etc., and Mr. Tang expressed regret that Japan seemed to have captured the market in the United States for Chinese silk and tea. Mr. Peck referred to the attempts of the Silk Association of America for some years to improve the methods of Chinese silk production, in order to make Chinese raw silk more suitable for America’s needs. Mr. Tang said that matters of that sort, i. e. improving and maintaining quality of Chinese exports, such as silk, could certainly be attended to by the Government, especially if it solicited the assistance of Chinese financiers.

Mr. Peck suggested that Mr. Tang converse on these subjects with Mr. Julean Arnold, American Commercial Attaché at Shanghai.

  1. Despatch not printed; for its enclosure, see memorandum dated November 14, 1933, Foreign Relations, 1933, vol. iii, p. 452.
  2. See pp. 523 ff.