793.94/7901: Telegram
The Ambassador in China (Johnson) to the Secretary of State
[Received 7:45 p.m.]
243. 1. Embassy’s 229, May 6, 11 a.m. Sung Che Yuan, who has been in Tientsin since the latter part of March, is expected to return to Peiping within a day or two. Available information indicates that his conversations at Tientsin with Japanese military have not yet resulted [Page 152] in any signed agreement. It is now anticipated that negotiations await the arrival of Tashiro, the new commander of the North China Garrison, who has already left Tokyo for Tientsin.
2. Notwithstanding Sung’s continuing delay in entering into the agreement presumably desired by the Japanese military, he continues to increase the autonomy of his regime step by step. Recent developments in this direction are given below:
- A.
- Supposedly as the outcome of Japanese representations, Sung has effected the suspension of all military training in Government and private universities and higher schools in Peiping and the dismissal of their military instructors. This training was instituted reputedly as a result of Japanese seizure of Manchuria and the instructors were mostly military men of the National Government.
- B.
- (Reference paragraph 3 of Embassy’s 191, April 16, 3 p.m.) The Communications Committee of the Hopei-Chahar Political Council was inaugurated May 14 with Chen Chueh Sheng, Managing Director of the Peiping–Mukden Railway, as Chairman. The committee will allegedly deal with affairs relating to roads, railways, airways, navigation, posts, and telegraphs. Presumably, it will gradually take over functions heretofore of the appropriate ministries at Nanking.
- C.
- General Teng Che Hsi, a Kuominchun leader, was appointed May 15 on Sung’s recommendation as President of the Hopei High Court, a post heretofore occupied by a Nanking official. Teng continues to be Chief of Court Martial. (Reference Embassy’s 201, April 20, 2 p.m.) Shih Ching Ting has resigned as Chief Counselor because of a difference with Sung over an internal matter. Lu Chung Lin is understood to have gone to Tsinanfu to see Han Fu Chu. General Liu Chi, a Kuominchun leader, arrived May 14 at Peiping from Shanghai. The significance of movements of these generals formerly senior to Sung and notwithstanding the influence of the views of anti-Japanese Feng Yu Hsiang with respect to the Kuominchun as a unit is still speculative.
- D.
- The Hopei political bank which is under Sung’s control has now a note issue reputedly totaling $1,000,000. Confidence in its notes is allegedly good in Peiping and Tientsin but lacking in the countryside. The Hopei Silver Currency Bureau, which is under Sung’s control, has issued copper coin notes to an extent of more than $500,000. Sung’s Hsing Yeh Currency Bureau in Chahar has a note issue of allegedly about $600,000, including copper certified notes. Hsi Yi Chu money shop in Peiping acts as a clearing house for the notes of the Chahar Bureau. This situation is inimical to the monetary policy of the National Government.
- E.
- The post of Special Inspector of Foreign Affairs for Hopei and Chahar has been abolished by the Nanking Ministry for Foreign [Page 153] Affairs and its duties will be carried out by the Foreign Affairs Committee of the Hopei-Chahar Political Council.
3. The proposed East Hopei Bank of Yin Ju Keng’s regime has not yet been organized. A competent informant stated that the Ta Ching Bank, which has its head office in Tientsin, has come to an agreement with Yin’s regime whereby the bank has supplied Yin’s regime with $2,000,000 in notes for use in East Hopei in return for an unstated amount of notes of the Central Government The standing of the Ta Ching Bank is allegedly not good and it is believed that there is little if any collateral for its note issue.
By mail to Tokyo.