793.94/7701: Telegram

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

40. 1. Embassy’s 26, January 20, 3 p.m., paragraph 1. Local post office official states that he has been instructed by his Ministry to turn over to them as from January 1st 40 percent of revenue obtained from sale of revenue stamps. There is doubt whether the Council will be satisfied with this.

2. Embassy’s 25, January 19, noon. The Embassy has been reliably informed that customs revenues at Tientsin are not being remitted to the Council but are being sent daily to the Inspector General.

3. Reports are conflicting with regard to the situation existing at Changping which is about 30 miles northwest of Peiping on the Peiping-Suiyuan Railway and on the border of the demilitarized zone [Page 31]in area claimed by Yin Ju Keng. One informant with official sources states today that the magistrate opened the gates to a force which was variously reported as belonging to either Liu Kwei Tang or Yin Ju Keng and that some of Sung’s soldiers are outside the town. If the force within the town is being used as an instrument for extension of Yin’s or Manchukuo’s power, undisputed occupation of Changping would be a step toward gaining control of the railway and would make possible the separation of Sung’s troops in Hopei from his one division in Chahar which would probably prevent Sung’s taking early action to restrain Li Shou Hsin’s forces from taking Kalgan, a probability which is now being rumored.

4. The press reports bandits of Liu Kwei Tang numbering 500 out of a total force of 1,500, have entered the northern tip of Honan. In line with the statements in the Embassy’s 33, January 23, 5 p.m., with regard to the possible use of Sun Tien Ying and Shih Yu San to assist in the establishment of an autonomous North China, some observers are of the opinion that Liu may be used to effect the inclusion of Honan north of the Yellow River in such a regime. By mail to Tokyo.

Johnson