893.00/13522: Telegram

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

173. This office’s 165, June 4, 11 a.m.

1.
Situation in Southwest and in respect to relations between Southwest and Nanking continues obscure. Definite information as to [Page 197] progress of events is lacking. Denials by both sides that civil war threatens appear in direct contradiction to military activities at least on part of the Southwest. Allegations of Japanese intrigue in Kwangsi, combined with fact that Kwangsi has for some time possessed arms including planes furnished by Japanese seems to produce the illogicality of an anti-Japanese expedition furthered by Japanese assistance.
2.
Following reports current here are credible:
(1)
Considerable number of National Government troops have been stationed along Kwangtung-Kwangsi borders, probably for more than 2 months, in Kiangsi and Hunan and Fukien;
(2)
A schism has been developing between Kwangtung military who have desired to maintain the status quo for selfish material reasons and Kwangsi military leaders who have,
(a)
felt threatened by proximity of National Government dictation and possibility that Chen Chi Tang might come to terms with Nanking, which possibility was increased by death of Hu Han Min;
(b)
[been] growing self-confident by reason of their improved military resources which have been the result of long and arduous effort assisted by Japanese supplies and training at least in aviation;
(c)
been subject for many months to pressure to break openly with Nanking exerted by Japanese military officers and possibly accompanied by Japanese loans or bribes;
(3)
Pai Chung Hsi and Li Tsung Jen engineered the June 2 declaration of the Southwest Political Council and Executive Committee taking by surprise Chen Chi Tang who has joined with them temporarily for the sake of expediency;
(4)
Following the declaration, Kwangsi and probably Kwangtung troops moved toward the Hunan border;
(5)
Discussions have since been proceeding by telegraph and through personal representatives between National Government’s Southwestern leaders.
3.
These circumstances make it appear that the proposed northern anti-Japanese expedition is a threat against Nanking being employed in the process of bargaining and that the Domei report of a Southwestern declaration of war against Nanking was a premature report of an intended act held in reserve for later use in bargaining if necessary. Possible explanations of the apparently contradictory developments in respect to the part which alleged Japanese intrigue has played are of:
(a)
Kwangsi’s anti-Japanese actions are with the consent of or by arrangement with the Japanese whose purpose is served if civil war breaks out;
(b)
Kwangsi has obtained as much assistance as possible from the Japanese and has now no compunction in turning against the Japanese the weapons which Japanese have provided;
(c)
lacking means or desire to pay the Japanese for assistance rendered, a “declaration of war” against Japan furnishes a convenient device to avoid payment. (The explanation under (a) seems the most credible.)
4.
A peaceful settlement is not unlikely. Chiang Kai Shek yesterday suggested calling the second plenary session of the Central Executive Committee which, if convened, can take steps such as postponement of enforcement of constitution which may plan to meet part way presumable dissatisfaction of Southwest with Chiang’s dictatorship and the dissatisfaction which Southwestern leaders are believed to feel with the constitution as a document devised in the proclaimed draft form legalizing that dictatorship by making Chiang President of the Republic. Meanwhile, discussions may lead to solution of specific pending issues including questions of finance and distribution important Government posts.
5.
By mail to Peiping and Tokyo.
Peck