793.94/8109

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

No. 618

Sir: I have the honor to submit information with regard to Japanese penetration in those areas in Chahar and Suiyuan Provinces which are occupied by Mongols and in those areas along the Peiping-–Suiyuan Railway which are under Chinese administration.

I. Japanese Penetration in Mongol Areas

a. Japanese interference with foreigners’ movements:

Travel by foreigners in territory north of the Great Wall in Chahar Province has been practically stopped by the Japanese military. Japanese military and consular representatives stationed at Kalgan, the Chahar provincial capital at the Great Wall, inform foreigners that they cannot travel north from Kalgan. Permission from the Japanese military officer resident at Kalgan for such travel is regarded as necessary; and such permission is now consistently refused. The Chinese authorities at Kalgan are extremely reluctant to visa foreigners’ passports for travel north of Kalgan, their expressed reason being their fear that foreigners may become involved in difficulties with [Page 256] Japanese military or with Japanese-directed Mongol military. Two foreigners, who went on July 29 north from Kalgan for thirty miles to Changpei on the main road to Outer Mongolia, were forced by the Japanese military to return on the same day to Kalgan. Earlier in July two other foreigners were detained for two days by Japanese authorities at Chapsur, which lies further north on the same road. There are reports from missionaries at work in that area of frequent interference by Japanese with the movements of foreigners. Two American missionaries, however, who left Kalgan on July 29, with only Chinese visas, to visit mission stations in Mongol territory in Chahar Province, passed through Changpei without hindrance, the inference being that foreigners who have work to do and who are well-known in the area are not yet prevented entry. These two foreigners expressed their intention of avoiding Chapsur, however, because of their belief that they would otherwise be interfered with at that point. Chinese are not yet restrained from travel.

With regard to travel by foreigners to Pailingmiao, which is in northeastern Suiyuan Province but under Japanese control, it is believed that the situation is similar. Chinese authorities in Kueihwa, the Suiyuan provincial capital on the Peiping–Suiyuan Railway, are most reluctant to permit foreigners to leave Kueihwa for Pailingmiao, maintaining that difficulties with Japanese would be encountered. It is understood, however, that foreigners who have long been associated with that part of Inner Mongolia in northeastern Suiyuan, where Pailingmiao is located, can still move about in that area.

b. Japanese control of Mongols:

Japanese are apparently in complete control of the Mongols inhabiting the areas referred to above. It is reliably reported that no foreigners are now permitted to see Prince Teh, the leading Mongol in Japanese-controlled Mongol territory and the Chairman of the Mongolian Local Autonomous Political Council, the headquarters of which were formally removed in June of this year from Pailingmiao in Suiyuan Province to Chapsur in Chahar Province on the Kalgan-Outer Mongolia road. The increasing curtailment of Prince Teh’s influence is indicated by a reliable report of his recent failure to persuade the Japanese to deal leniently in imposing export duties on goods exported by Prine Teh’s friend, “Duke” Larson, the well-known Swedish dealer who lives north of Chapsur. It would now seem that Prince Teh is no more than a puppet and that his former strength, which lay in being able to bargain both with Japanese and Chinese authorities, has been completely dissipated as a result of the action of the National Government and the Chinese provincial authorities which cut him off from China by their establishment of a council of Mongols living in Suiyuan Province.

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There are allegedly few Japanese in the Japanese-controlled Mongol area, it being said that there are only some ten or twenty Japanese at Pailingmiao and a similar number at Chapsur and at other important points. These Japanese exert their control through the military strength which is behind them in “Manchukuo” and through the presence in Mongol territory in Chahar and northeastern Suiyuan of Japanese-directed Mongol troops from Jehol Province. There are reputedly from one to two hundred such troops at Pailingmiao and a large force of one to two thousand men, under the Japanese-directed Jehol Mongol leader Li Shou-hsin, in the vicinity of Chang-pei, thirty miles north of Kalgan.

The Japanese have recently instituted military conscription among Mongols in certain parts of Chahar, apparently as an experiment, and there is at Changpei a school where several hundred Mongols are receiving primarily military training, although the Mongols attending were under the impression when they were enrolled that they were to receive other education. It is understood that the Mongols in the school numbered some 500 in the spring of this year but that the number has now decreased to about 300 because of Mongol dissatisfaction with the institution. According to a 27 year-old Mongol, who was forced to attend the school against his will but who recently obtained release through feigning simple-mindedness, the Mongol students are roughly treated; they are told, when they complain of the poor quality of the food, that the soldiers of Genghis Khan had worse food and yet conquered Europe; and every effort is being made to turn the students against Soviet Russia and communism.

c. Attitude of the Mongols under Japanese control:

All reports from Chinese and foreign sources are to the effect that the Mongols do not want to be under Japanese control and that they are treated badly by the Japanese. As stated in previous despatches, the present plight of the Mongols in Chahar Province and northeastern Suiyuan Province is the result of (1) their own weakness militarily, (2) the unjust and inept handling of the Mongol question by Chinese provincial and national authorities, (3) the military strength of Japan, and (4) the firm intention of the Japanese military to gain control of Inner Mongolia in preparation for a possible war with Soviet Russia and, less importantly, to exploit the area economically.

According to well-informed sources, the younger Mongols of the area under discussion are radical and are sympathetic toward Soviet Russia because of the latter’s comparative liberal treatment of Mongols in Outer Mongolia; and the Mongol princes in the area under discussion are still on friendly terms with those Mongols in Outer Mongolia who were princes prior to Soviet control and who are still regarded by Mongols as princes. From this information, it would appear that [Page 258] the Japanese could hope for little real support from the Mongols in Inner Mongolia in case of a conflict in which Outer Mongolia and Japan were on opposing sides.

d. Japanese intentions:

The strict control by the Japanese over the Mongol areas referred to above appears to be for the purpose of establishing themselves firmly there prior to extending their control over Mongol areas in Suiyuan Province. Whether the Japanese intend to extend at the same time their control over those parts of Chahar and Suiyuan Provinces which are under Chinese control is not known. (Japanese penetration in the Chinese areas will be discussed later in this despatch.)

There have been frequent reports during the past twelve months that the Japanese intend to cause the Japanese-directed Mongols in Chahar Province to move westward and take over Suiyuan, the latest rumor being that this will occur in September or October of this year and that Prince Teh will be made the puppet emperor of Inner Mongolia with his capital at Kueihwa, the provincial capital of Suiyuan.

Most observers are at present of the opinion, however, that such a forward movement will not occur in the immediate future. The reasons for the suspension of westward expansion are not known but are probably to be found among the following: (1) the Japanese military are awaiting developments in Sino-Japanese relations with respect to China south of the Great Wall; (2) the Kwantung Army is preoccupied with problems confronting them in “Manchukuo”; (3) westward expansion is not approved at present by the “moderate” military authorities at Tokyo who are now allegedly stronger than formerly; (4) the Kwantung Army is uncertain whether a westward movement might not involve them with unwanted military conflict with General Sung Che-yuan’s forces in southern Chahar and General Fu Tso-yi’s forces in Suiyuan; and (5) the Japanese wish first to regularize their position in the area in Chahar and northeastern Suiyuan which they already control.

In explanation of this fifth point, the Embassy has been informed that the Kwantung Army is disappointed with the decline of revenue in the area in Chahar Province which they control. For example, the Wostwag, a German company which has long traded with Inner Mongolia, has within the past few weeks entirely stopped trade with the Mongol area under Japanese control, the reason being that the Japanese assessed or caused to be assessed a duty of 11 per cent on goods which the Wostwag purchased in that area and that this was followed by a similar assessment by the Chinese provincial authorities when the goods reached territory under Chinese administration. Japanese [Page 259] have been discussing with Wostwag and with the Chahar Provincial authorities ways to adjust the situation so that the Wostwag will resume its former trade, but so far without success. (The Wostwag stopped all trade with Outer Mongolia in January of this year, and now all their shipments go by way of Tientsin to Vladivostok.)

II. Japanese Penetration Along the Peiping–Suiyuan Railway

The influence of the Japanese is constantly increasing along the Peiping–Suiyuan Railway, penetration being also facilitated by a Japanese weekly military plane service between Peiping and Paot’ou, the westernmost station of the Peiping–Suiyuan Railway. The plane (a 1928 Fokker) uses Chinese airfields at the various towns along the railway and is not open to the general public. Japanese planes, other than that on the weekly service, are also said to stop frequently at the Chinese airfields.

There are more than 300 Japanese and Koreans resident at Kalgan, the Chahar provincial capital, the number at the beginning of this year having been 180; there are from 50 to 100 Japanese and Koreans resident at Kueihwa, the Suiyuan provincial capital; and about ten at Paot’ou, the end of the line.

There is a Japanese military mission at each of those cities, and each mission has its own short-wave radio outfit for sending and receiving messages. According to the local Japanese Embassy, those military officers are under the Kwantung Army; according to the local Japanese Assistant Military Attaché, those officers are under the North China Garrison; according to a Chinese official, it is stated on the calling-cards of those officers that they are under the North China Garrison although they claim to be under the Kwantung Army when it suits their convenience. There is also a Japanese civilian resident at Kalgan who is in the employ of the Kwantung Army and who is referred to as “in charge of Mongolian affairs in Kalgan”.

There is a Japanese consulate at Kalgan, and within the past few months there has been established at Kueihwa a consulate of peculiar status. A Chinese official who participated in the negotiations for the establishment of this consulate has stated that the Chinese authorities objected to the establishment of a Japanese consulate at Kueihwa and that a compromise was finally arrived at whereby the Chinese authorities agreed to the residence at Kueihwa of Japanese consular representatives provided no Japanese flag were flown over the building occupied and no designation as consulate were on the entrance. (A member of my staff who visited Kueihwa on July 28 found the Japanese consular people housed in a rather wretched Chinese building with no name at the entrance and no flag flying.)

There are representatives of the South Manchuria Railway Company resident at Kalgan and at Kueihwa, allegedly pursuing economic [Page 260] investigations. Those at Kueihwa are housed in the nameless quarters of the Japanese consular representatives.

The presence of Japanese is most noticeable in Kalgan. In one short street near the railway station are the following Japanese establishments: several inns, several restaurants and cafes, a motor-bus company, a toy shop, a printers’ and stationery shop, and a manufactory of washing powder. These last two mentioned establishments are presumed to be the two manufactories of heroin which are commonly said to be in Kalgan under Japanese or Korean management.

The situation at Tat’ung, on the Peiping–Suiyuan Railway in northern Shansi Province, is not so clear. There are neither consular nor military representatives resident there, and the principal activity of Japanese dealers appears to be the sale of heroin. It is understood that two Chinese inns near the Tat’ung railway station were recently taken over by Japanese nationals for the promotion of this illicit business.

As for the sale of Japanese products along the Peiping–Suiyuan Railway, no information is obtainable. It is believed, however, that considerable business is done in that area in smuggled Japanese goods, especially since the market in Hopei Province and in places to the south of that province has become glutted.

III. Attitude of Chinese Toward Japanese Penetration

The Chinese authorities along the Peiping–Suiyuan Railway are evidently uneasy with regard to the growing Japanese penetration and with regard to ultimate Japanese intentions. One hears that the Chinese provincial authorities have recently been promised aid by the National Government in case of need in resisting the Japanese and that preparations for resistance are being made in northern Shansi and in Suiyuan Province. The accuracy and the significance of such reports are open, however, to doubt. It seems improbable that Japanese penetration by the present gradual means or by actual military force will receive any real check at the hands of the Chinese provincial authorities concerned whether or not they receive aid from the National Government.

IV. Narcotics Along the Peiping–Suiyuan Railwat

There seems to be no doubt that there is at least one heroin factory (probably two) in Kalgan conducted by Japanese or Koreans and that heroin is being sold by Japanese nationals or their Chinese employees in cities and towns along the railway in increasing amounts. Figures in regard to this trade, however, are unobtainable because of the secrecy surrounding the business.

As for opium, considerable areas along the railway between Kueihwa and Paot’ou are planted with poppies, notwithstanding the new regulation [Page 261] of this year that poppies may not be grown within a space of about seven miles on either side of the railway. It is said that the area under such cultivation this year is considerably larger than last year, although only a three mile limit with respect to the railway was fixed by the provincial authorities last year. The trade of the Suiyuan authorities in Kansu and Ningsia opium allegedly continues unabated. Disinterested observers resident in the principal cities along the Peiping–Suiyuan Railway estimate invariably more than half the population smokes opium, some estimates being that 90 per cent of the population are addicted. There is no evidence that the opium trade is in other than Chinese hands.

Respectfully yours,

Nelson Trusler Johnson