Foreign Relations of the United States Diplomatic Papers, 1934, The Far East, Volume III

893.50A/100

The Consul at Geneva ( Gilbert ) to the Secretary of State

No. 958 Political

Geneva , July 13, 1934.
[Received July 25.]

Sir: I have the honor to recall that during the years 1933 and 1934 I transmitted to the Department a number of despatches respecting the League project for technical assistance to China as viewed from the Geneva angle. Certain of these despatches described the details of such technical assistance in specific fields. Many of these plans were placed in operation in China while others were merely tentative projects which were later abandoned. The precise status of the entire program for technical assistance to China on the part of the League was, however, summed up in a report submitted by Dr. Rajchman to the Council Committee on Technical Cooperation with China. Copies of this report were transmitted to the Department with my despatch No. 908 Political, dated May 15, 1934.⁷² In view of the content of that report, it would not seem necessary to submit any further data on the technical side of the question, particularly since in a recent conversation with Dr. Rajchman he stated that there was nothing of significance to add to the material set forth therein.

However, in the conversation which I had with Dr. Rajchman, he gave an outline in general terms of what he considered to be the present status of this project of technical assistance as well as of the course, as he planned it, that the matter should follow in the future. He also at the same time gave his views concerning the political situation in the Far East, which I feel may be of interest to the Department. Dr. Rajchman told me that in returning to Geneva from China he had made a stay in Washington and had had a conversation with the Chief of the Division of Far Eastern Affairs of the Department. I have no doubt but that much which Dr. Rajchman had to say to me he also expressed in his conversation with Dr. Hornbeck. At the same time, certain events have transpired since Dr. Rajchman was in Washington which have had a bearing upon the questions he presumably discussed there, and I am therefore setting forth the substance of what he had to say to me.

The Relation of Technical Assistance To Japanese Policy In the Far East

Dr. Rajchman first approached the subject of technical assistance to China from the angle of Japanese policy in the Far East enunciated in the declarations of the Japanese Government in April last. This aspect of the matter seemed to be uppermost in his mind, and naturally so, both because of the important influence which Japanese policy might have on the League’s program of technical assistance and because of his personal concern due to the fact that his name was so prominently linked with the Japanese allegations of the political aims of this work. Dr. Rajchman attributed Japan’s policy in issuing these declarations to a combination of five causes:

(1) China was not receptive to what Japan wanted, that is, Japan’s desire to arrange for an exclusively Japanese loan to China and to obtain from China a preferential trade treaty.

(2) Japan was alarmed by American and Italian aviation establishments in China, seeing in these not only a promotion of trade between these countries and China in aviation material, but also seeing in the consequent development of Chinese aviation a means of strengthening China’s central government.

(3) The Japanese were startled by the British placing the postal question on the agenda of the League Advisory Committee, particularly as it is understood that the British did not discuss this with Tokyo in advance. They felt that this was very much more than a technical procedure and would turn out to be a political move.

(4) The Japanese noted with apprehension the Monnet and Salter loan projects. They saw in it the re-entry of foreign capital to China and the building up of a Chinese financial organization. They felt that much more might lie behind this.

(5) There were current in the East a great deal of speculation and rumor concerning the nature of Rajchman’s report and the action which the Technical Committee of the Council might take thereon.

In this connection the Department will recall that such rumors were current in Geneva also and the question was discussed as to whether Rajchman would be repudiated by the League if it were shown that he had engaged in political activities in China, the press being prepared to make an issue of the matter if the League should “sacrifice” Rajchman to appease the Japanese. I informed the Department concerning the feeling aroused here at that time in my telegrams No. 61 of April 28, 11 a.m.⁷³ and No. 64 of May 1, 2 p.m.⁷⁴

Although Dr. Rajchman mentioned this point last, it does not necessarily follow that he intended to leave the impression that it was the least important of the factors mentioned above in determining Japan’s policy. On the other hand, it was evident that he did not wish this factor to be isolated, as might naturally occur in the minds of persons at Geneva, who would in many cases doubtless have the League’s position in this matter uppermost in their minds, particularly in view of the declarations made by the Japanese Consul General on April 23 and his subsequent call on Avenol,⁷⁵ which were unmistakably intended as a warning to the League not to allow its technical assistance to be used for political purposes. It would be only natural, however, for Rajchman, in view of his personal implication in the alleged political activities, to lay stress upon the other factors in the situation.

After enumerating what he considered to be the reasons behind these declarations of policy in regard to the Far East, Dr. Rajchman went on to explain his impressions concerning the object which Japan hoped to attain. He said that by these declarations Japan endeavored to create a new situation in the Far East in line with her general policy of retarding the development of China and the holding of that country within her influence. These declarations, in his opinion, although ostensibly addressed to the great powers, were directed principally at China herself. The Japanese hoped in this manner to intimidate China and at the same time by one blow to create a world situation in which China would cease to hope to obtain political assistance from the West, thus forcing her as a last resort to come to terms with Japan. In doing this, beyond the general content of these declarations, they attacked what they felt to be the most vulnerable point, that is the matter of technical collaboration and in particular the technical collaboration of the League of Nations.

With respect to the action of the Japanese Consul General here, Dr. Rajchman said that Yokoyama told the Secretary-General that he wanted the League’s collaboration with China brought in effect to a close and that he did not wish to have Rajchman reappointed. The Department will note that this is different from the accounts of the Avenol–Yokoyama interview given to me by both Avenol and Yokoyama (see my telegram No. 66, May 3, 9 a.m.⁷⁶). My reaction to this is that what Yokoyama said to Avenol was so general in nature that it could probably be reconstrued to mean a great many things. Moreover Rajchman’s reaction to the Yokoyama–Avenol conversation may be considered as the natural reaction of a man who has been under attack. In this connection I pointed out to Dr. Rajchman that my understanding was that none of the Japanese declarations had, as he had intimated, been specific. All had been couched in general terms and my impression was that Yokoyama, although he had formally presented the Japanese position to Avenol, had placed nothing on paper except the text of the general declaration which he had previously given to the press. This is, of course, in line with what I have described as the entire Japanese policy in this connection, that is, not to be drawn into any definite statement regarding their interpretation of what may or may not be political, or their specific attitude toward the League and China.

Dr. Rajchman went on to say that in regard to the first objective mentioned above which Yokoyama had envisaged in his conversation with the Secretary-General, namely that the League’s collaboration should be brought to a close, the Japanese did not succeed in this effort. He called attention to the circumstance that the meeting of the Technical Committee proceeded precisely as if the Japanese had taken no action whatever. As a matter of fact, in my own opinion, the meeting of the Technical Committee, once the non-political nature of Rajchman’s report was known, was staged in such a manner that it could but proceed quietly and without incident. As reported in my telegram No. 70, May 9, 5 p.m.,⁷⁷ the Chinese, on the advice of Avenol, adopted the policy of giving no attention in the meeting of the Technical Committee to the declaration of Japan and continued to proceed on the assumption that the assistance to China would be carried out according to plan. Moreover I understand that Rajchman himself was very careful to avoid in the Committee the raising of any controversial question, and that he read his report in a hurried, mechanical, matter of fact tone. The Committee then adopted a report laying down the general directives for the future. So, in fact, nothing occurred which in any way seemed to recall the recent Japanese declarations.

Respecting the question raised above of Rajchman’s reappointment, he stated that he had been appointed for one year and that his term would expire on August 1 of this year. He naturally made no commitments as to whether he was a candidate for reappointment or what action might be taken. He told me, however, that he thought the Committee would convene some time during the course of the present month to consider the matter of a new appointment or a reappointment of himself.

Broader Aspects of the Program of Technical Collaboration

Dr. Rajchman reaffirmed the very great difficulty in arriving at a definition as to what is technical and what is political. He asserted that the technical work would of necessity be very limited, but if it were found possible for the Chinese Government to rely on other governments in even limited technical work, it would have the immediate result of forming a link between China and the West with the incidental result of strengthening China’s central government. Such technical work would form a new point of approach even though it was not expected that the work itself would go beyond certain rather restricted limits, at least for some time to come, both on account of the financial difficulties involved as well as by reason of the lack of sufficient trained men in China to undertake this type of work.

Dr. Rajchman then discussed what he described as the philosophy of this project in its broader aspects. He saw the League’s relation to China as falling into three distinct stages or phases.

(1) The first efforts, which began several years ago, were intended to “gain China for the League”. The Department will recall that on account of a number of factors which had been in play since the world war, the relations between China and the League at that time were not very cordial (see Consulate’s despatch No. 471 Political, dated January 17, 1933⁷⁸). While the first efforts in the technical field centered in matters of health and sanitation, it had behind it this aim of “winning China” which may perhaps be characterized as fundamentally political.

(2) The next state after the explorations in respect to health was to assist the Chinese Government to build up a national organization to carry out work in technical domains—the aim also being political, in that it would help to strengthen China’s central government. At the meeting of the Council in May 1931, an agreement looking toward this end was ratified. Dr. Rajchman stated that Yoshizawa, the Japanese representative on the Council at that time, tried to block this movement, but he was instructed in unequivocal terms by Shidehara⁷⁹ to support it.

Dr. Rajchman went to China in September 1931. On his way he passed through Japan and talked in Tokyo with the Vice Minister of Foreign Affairs, who stated that the Japanese Government favored the League’s cooperation with China which Rajchman had explained in his talk with him. Then suddenly, without any warning, came the Japanese attack on Mukden. A natural inference to be drawn from this was, he felt, that the civil authorities were probably not aware of the plans of the military.

(3) On his arrival in China, Dr. Rajchman found that the Chinese technical organization had already been created. The League’s task was thus changed. It was no longer necessary to create an organization, but merely to assist in maintaining an existing organization.

Thus at the present juncture the League’s task is to help China’s endeavors to carry out its own program as efficiently as possible.

In carrying this out, a question of primary importance was whether it was preferable to send foreigners to China as advisers or to have Chinese come to Europe and America for training and experience. Dr. Rajchman felt that the latter method served an infinitely more useful purpose inasmuch as foreigners’ help to China could be only ephemeral, while, if the Chinese themselves were trained in the West, thus creating through individual Chinese a link between China and the West, the results would be more far-reaching and permanent. He advised the policy therefore of having Chinese come to the West for training and observation and it was his plan to recruit for this purpose mature and responsible men. In fact, he wished to obtain for this service some twenty or thirty of China’s leading men, who would be in a position on returning to China to assume the active direction of affairs. It would by no means serve the purpose merely to send abroad a group of young students, no matter how intelligent, nor how technically efficient they might be.

With respect to sending foreigners to China, Dr. Rajchman said that his program envisaged the sending of a very few whose mandate would be limited to specific and relatively brief consultations. (This subject is discussed fully in the conclusions of his report to the Technical Committee referred to above).

Dr. Rajchman described his present occupation as that of explaining to the members of the technical organizations of the League what they must do towards the fulfilment of the League’s program. In this Rajchman is carrying out the instructions given to him by the Technical Committee at its last meeting in accordance with the suggestions contained in Rajchman’s own report. This is a natural phase of his work, but, as I shall point out later, it has a very important bearing on the furtherance of the League’s program which in this way can be linked up with the League’s financial organization.

Dr. Rajchman described his present occupation as that of explaining capitals in order to explain this matter to the Foreign Offices. His ostensible purpose in doing this is to arrange the program in the various countries for the visiting Chinese according to the plan described above. He is also desirous of obtaining the support of the League governments for the program of the Technical Committee.

Incidentally, he stated that in visiting the Foreign Office at Rome he hoped to obtain full Italian support by appealing to their interests in their aviation work in China. He said that he understood that this interest was indeed in fact very keen. Moreover he hoped that the general situation with respect to the relations of Japan and Italy would incline the Italian Government to support the League’s program. In this connection he pointed out that Italy is greatly concerned with Japanese commercial competition in the Mediterranean. He felt that this divergence of interests between Japan and Italy was indeed a very favorable factor in promoting the League’s technical assistance to China, because Italy would be less likely to raise any opposition in the Council, as she has frequently done with respect to other League action.

At this point Rajchman disclosed more of his philosophy in handling this question in the following manner. He stated that Ministers of Foreign Affairs are chiefly interested in trade and finance. His project was to demonstrate to these Foreign Ministers that for China to have trade with their countries she must have foreign capital, i. e. fresh money. His project in this respect is that China must have a financial organization which would not be governmental but would be under the aegis of the government. He stated that such an organization had in fact been created which was composed of all of the leading banks of China and in which the Chinese Government was deeply interested (he did not state to just what extent this organization had proceeded).

Rajchman continuing his exposition of his philosophy of the situation, then explained the relationship between the technical services and the question of financial assistance; (1) with the Chinese Government’s technical service the League was associated and assisted, (2) with China’s financial organization the League was in no way associated. The two, however, were associated for natural and practical reasons. Thus consultations between the two were likewise natural, practical, and to be expected. With the establishment of the Chinese technical organization and the 100% Chinese financial organization, the matter would develop with consultation and thus with de facto association.

He took as an example of the foregoing the question of railroads. Any development of the Chinese railroads could not be considered apart from the financial aspects of the question.

Returning to the question of his mandate from the Technical Committee to consult with the League Organizations, he stated that it was thus only proper that he should consult with the League Financial Organization. Referring in this connection to the rumors which had been current in the Far East and in Geneva concerning his alleged activities in connection with a loan to China, Dr. Rajchman said that while in China he had in fact had nothing to do with any question of a loan to China. When any Chinese broached financial matters to him, it was always his practice, he said, to refer them to Monnet. This was very convenient for him, as it relieved him of any responsibility in the matter. He had only to refer the Chinese to experts in finance on the spot. Nevertheless, he added, that it was not true that he would have gone beyond his mandate if he had found it expedient to discuss financial matters and had done so. He went on to explain that the technical work of China depended so directly upon the question of obtaining the money to carry the work out, that he would have been entirely justified under his terms of reference (which he quoted to me) in discussing with the Chinese the financial aspects of the work and the best method of procuring the money to carry it out.

In commenting on this to the Department, I may say that in my opinion the tactics displayed by Rajchman in this matter of consulting with the League Financial Organization show how he is very cleverly keeping within his mandate, but is actually associating the technical endeavors with financial endeavors extending beyond the mere technical field, despite anything that the Secretary-General may say to the Japanese or anything the Japanese may say.

My reaction to this whole matter is that Rajchman’s policy and that of any other agent which the League may appoint to go to China, and the policy of the League itself, will be to proceed as quietly as possible and as effectively as possible with the program of technical assistance which will ostensibly have no relation to political questions, but which will in effect in the very nature of things be linked with political questions, since it has as an underlying objective the strengthening of the central government of China and of China as a nation.

At the conclusion of our conversation I asked Dr. Rajchman what he expected the Japanese to do. He said that no one knew. He pointed, however, to the blow at Mukden at the time the League’s plan had progressed to a certain point and he also pointed to the Japanese demands respecting the disappearance of a Japanese Vice Consul,⁸⁰ which had taken place a short time prior to my conversation with him. Dr. Rajchman’s general idea as to what the Japanese might do is that they might easily endeavor to create a local incident and attack the whole matter from such a point of departure.

In this connection I have read with interest the despatch to the Department from our Nanking office under date of December 29, 1933⁸¹ in which are set forth the views of Mr. Bryan R. Dyer, an American who is a member of the Chinese National Economic Council. If Mr. Dyer’s estimate of the situation is correct, I should be inclined to the opinion that the real danger to the League’s plan of assistance arises not so much from the probability of some single incident instigated by the Japanese, but rather from internal dissension among the Chinese and even among the foreign experts themselves, the diversion of public funds by Chiang Kai-Chek for military purposes, and the careful and systematic placing of Japanese money to the end of suborning Chinese officials.

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

Respectfully yours,

Prentiss B. Gilbert

72. Not printed; see footnote 52, p. 382.
73. Ante, p. 145.
74. Ante, p. 150.
75. Joseph Avenol (French), Secretary General of the League of Nations.
76. Ante, p. 154.
77. Ante, p. 172.
78. Not printed.
79. Baron Kijuro Shidehara, then Japanese Minister for Foreign Affairs.
80. The missing officer was found unharmed.
81. Not printed.