893.00/13205: Telegram

The Minister in China (Johnson) to the Secretary of State

457. My 447, August 30, 5 p.m. I am reliably informed that the Japanese military are not now favorably disposed towards the proposed Hopei Economic Association because of its origin. They have learned, it is alleged, that its organization is the result of a secret telegraphic instruction sent by Chiang Kai-shek to Wang Keh-min following Chiang’s arrival at Nanking. This competent informant believes the Association to be already practically impotent because of this and because of false Chinese press reports with regard to Japanese participation which displeased the Japanese military.

The contest by Chinese of inferior mentality and anarchistic outlook for positions and spheres of power in North China is continuing. It is becoming evident that the Chahar clique while extending its control over the Peiping-Tientsin area will retain its control of Chahar. Acting Chairman Chin was appointed Chairman of Chahar August 28 and it is understood that Sung Che-yuan who has not yet assumed office as garrison commander of Tientsin and Peiping will soon bring one more division from Chahar to the Tientsin area following which Shang Chen’s troops in the Tientsin area will go to Paoting. (This will mean that two of Sung’s four divisions will be in Hopei and two in Southern Chahar.) The press published September 3 a statement attributed to Sung of a pro-Japanese character.
Wang Keh-min has been appointed a member of the National Economic Council which may or may not result in his leaving North China. The reported transfer of Yin Tung from the post of managing director of the Peiping-Mukden Railway to the Railway Ministry at Nanking is regarded as without significance, the transfer being due to the fact that he is a follower of Huang Fu who no longer has a post in North China.
There are indications that the Japanese military are comparatively satisfied with recent changes in the situation both at Nanking and in North China. It may be expected that Sino-Japanese army negotiations will be increasingly centered at Nanking as (1) there is no Chinese of adequate authority or calibre representing North China even nominally; (2) the Peiping Political Committee has been abolished; and (3) the Peiping Branch Military Council is practically impotent. However, the Japanese military will probably endeavor to effect further economic and political extension in North China through dealing with Sung Che-yuan and other military leaders.
Responsible Chinese officials deny rumors that the Peiping Branch Military Council will be abolished in the immediate future notwithstanding the facts that it has no competent head in North China, that it has no real control over Sung and other war lords of the northern provinces and that the Japanese do not regard it highly. The chief difficulty in abolishing it is said to be the finding of satisfactory posts for its members many of whom are Chang Hsueh-liang men.
The moderated attitude of the Japanese military may be indicated by the fact that it was the Japanese Consul General at Tientsin and not the military who presented the demands with regard to the robbery on August 15 of the Peiping-Mukden train and who made written representations to the Hopei Chairman on September 2. These latter representations demanded (as the military did in May) the elimination of secret societies in North China and of the activities of their members working through other organizations failing which it would be extremely difficult to create a genuinely peaceful atmosphere. What restraint is being exercised by Tokyo is not yet known but there are reports that three trouble-making officers, Takahashi, Sakai and Matsui, are to be transferred by the end of this year.
The Chinese reply to the above-mentioned train robbery has been published. It purports [to] undertake responsibility for medical expenses of the injured, improved guarding of the trains and efforts to apprehend perpetrators but it is not making mention of apology or compensation for property losses.
The press has announced abolition of all Kuomintang offices in Suiyuan. Chinese officials stating this effected last spring.

By mail to Nanking and Tokyo.