793.94/8008: Telegram

The First Secretary of Embassy in China (Merrell) to the Secretary of State

329. Embassy’s 313, June 20, 3 p.m.

1.
Major General Matsumuro has stated in private conversation that the conference of Japanese officers at Tientsin decided that the Kwantung army will confine its action to affairs north of the Great Wall and that the North China Garrison will direct affairs south of the Wall. The same statement was recently made to the press by a Japanese military spokesman. There is reason to believe, however, that the Kwantung army regards the policy of the North China Garrison as on trial and that the permanency of the improvement in the spheres of control dated [depends?] upon the success of the policy of the North China Garrison.
2.
The policy of the North China Garrison is not clearly known except that the Japanese military are determined to extend their control over North China. One well-informed Chinese source states that Sung is being pressed for a declaration of neutrality, that he will, in that event, be given control of Yin Ju Keng’s area, and that the Japanese military hope Shantung will join the new regime quickly and Shansi and Suiyuan subsequently. Major General Matsumuro, however, has recently stated in conversation that he is deeply dissatisfied with Sung and would like to see his regime replaced by an intelligent civilian regime. The creation of an intelligent civilian regime appears to be impossible, while the [removal?] of Sung could probably be accomplished only by the creation of disorders and would probably be accompanied by further disorders. The Japanese military seem to be in something of a quandary, especially as they maintain that they do not wish to use military force.
3.
Decision of Sung Che Yuan for or against further yielding to Japanese wishes seems to depend on the outcome of relations between the National Government and the Southwest. A military conflict in the South, which observers here regard now as probably unavoidable, will (if it is not a quick success for Chiang Kai Shek) greatly weaken Sung vis-à-vis the Japanese.
4.
Delegates from the Southwest are allegedly urging Northern leaders to take simultaneous military action against Chiang. Sung conferred with Han Fu Chu on June 20. It is now anticipated that, in case of conflict in the South, Sung and Han will declare neutrality. Yen Hsi Shan is said to have refused to participate with Sung and Han.

By mail to Tokyo.

Merrell