793.94/7381: Telegram

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

80. 1. In a careful and frank statement today Vice Minister for Foreign Affairs, Tang Yu-jen, informed me that the rumors that the Japanese Government has presented numerous demands to the Chinese Government are incorrect but that the whole matter of Sino-Japanese relations has now reached a critical stage because of insistence by the Japanese Government that the Chinese Government agree to implement three policies: (1) to cease relying upon support from nations other than Japan; (2) to remove all obstacles to free intercourse between the people of “Manchukuo” and China; and (3) to take joint action with Japanese to combat the communistic menace in North China.

2. Tang explained that Japan’s suspicions in connection with policy (1) have been acutely aroused by the monetary measures promulgated on November 3.

The Japanese argue that the Chinese would not have embarked on the nationalization of silver without having first received a promise of a loan because they believe the measure cannot be carried out without such loan and the Japanese suspect the British of having promised this assistance. Chinese and British denials that such a loan has been arranged do not convince the Japanese and the latter, according to Mr. Tang, now believe that they must, in their own protection, set to work to eradicate British influence in East Asia. Tang expressed the fear that Japanese suspicions aroused by the monetary measures of November 3 contained seeds of serious future international trouble.

3. Tang said that the Japanese are not asking that China officially recognize “Manchukuo” and that the Chinese Government will probably be able to reach an understanding with Japanese providing for resumption of communications and other normal relations between the people of Manchuria and China.

4. Consent by the Chinese Government to Japanese military operations in North China against the communistic forces, according to Tang, offers serious problems because it would involve that [the?] presence of large Japanese forces there. He said incidentally that the Japanese Government had not officially broached the subject of an autonomous state in North China and there is no danger of Japanese official action in that connection but that Japanese are constantly intriguing with individual Chinese in North China and the latter may become tools of the Japanese in the autonomous movement. On this point Tang expressed great anxiety. Tang said that the Japanese [Page 418] have a deep suspicion that the Chinese Government has a military understanding with the Soviet Government and although the Chinese Government has categorically denied this the Japanese are insisting that direct proof be given in the form of military cooperation with Japan against the communist forces.

5. Tang said that the Chinese Government was insisting first that Japan treat it as a sovereign state and that whereas China might agree to the principles underlying these three policies, without some concrete proposals as to how these principles might be carried out the Chinese Government could do nothing. The Japanese, he said, had presented no concrete proposals because although the several departments of the Japanese Government might be agreed on the principles themselves there was a divergence of views among the Japanese as to the way in which the principles themselves should be interpreted. He said the forthcoming election of new party and Government leaders will not affect the Japanese issue since the Government’s policy toward Japan has long been formulated and moreover the personnel of the Government will remain practically unchanged.

Paraphrase by mail to Peiping and Tokyo.

Johnson