793.94/7404: Telegram

The Counselor of Embassy in China (Lockhart) to the Secretary of State

161. Embassy’s 157, November 18, 6 p.m. Local United Press correspondent has reported information given him by Chinese press manager with regard to alleged interview of Hsiao Chen-ying yesterday [Page 425] with Chinese press during which Hsiao said that in his negotiations with Doihara the latter has insisted on the establishment of an autonomous government of North China functioning nominally under Nanking, Japan being prepared in return therefor: (1) to recognize Chinese sovereignty over this Northern province; (2) to recognize China’s territorial integrity; and (3) not to interfere with internal administration. Hsiao further said that the Japanese had agreed not to put into words agreement that Japanese advisers be employed; that Doihara had said that if the new regime were not declared by November 20, Japanese forces would enter Hopei and Shantung to establish an independent North China under Pu Yi; and that Doihara threatened the use of force if the National Government should take military action against new regime.

2.
Hsiao yesterday informed a Chinese official well known to the Embassy that the creation of a new organization had been decided upon by Northern leaders; that it will be called the Anticommunist Autonomous Commission of North China; that announcement of organization will be made November 20; that it will be headed by Han Fu-chu (who, it is reported, is to arrive at Peiping within a day or two); that the name of the organization is a compromise measure to attempt to hide the reality of an autonomous North China and that the Japanese have agreed in return to respect Chinese territorial integrity with reference to administration and nominal allegiance to the National Government. The Embassy’s informant, above mentioned, doubted that agreement on this had actually been reached among the Chinese especially on the part of Shansi and Suiyuan leaders.
3.
It is of interest that Hsiao’s press interview was published in substance by the Japanese press in Shanghai before Hsiao gave the alleged interview, thereby indicating perhaps that it was the intention of the Japanese to intimidate the Chinese into agreement.
4.
The Chinese press reports today concentration of Japanese forces at various passes of the Great Wall. However, the Chinese official in charge of customs offices along the Great Wall states that he has no information from those offices with regard to concentration (except at Shanhaikwan) and doubts if it has taken place.
5.
No information has as yet been obtained with regard to what the Japanese will desire of the new regime if formed in respect to financial and military affairs.
6.
The situation continues to be somewhat obscure but the Embassy doubts that the North China leaders have yet come to an agreement although important conversations are understood still to be in progress.

Repeated to Nanking and Shanghai, by mail to Tokyo.

Lockhart