Office of the Historian

793.94/8943: Telegram

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

Nanking, July 23, 1937—5 p.m.
[Received July 23—3:16 p.m.]

326. 1. Reuter has circulated this afternoon an information bulletin confirming by implication news from Tokyo that a settlement has been reached in Hopei. The Chinese Government insists that it is ignorant of the terms of the settlement. Assuming that a settlement has been reached and hostilities between the Japanese forces and the 29th Army avoided, the Chinese Government may still face serious internal difficulties. Such a settlement may seriously affect its prestige and even its continuance because (firstly) the Japanese will have flouted the authority of the Government in Hopei and (secondly) the Chinese public will hold the Government responsible for failing to prevent the strengthening of Japanese control over Hopei which will inevitably result from this so-called “local settlement.” The settlement will obviously appear to the Chinese public to be local only in the sense that it was forced by the Japanese Government and the Chinese Government was excluded from participation.

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2. It seems probable in Nanking that a settlement of this nature will be viewed by the Chinese public as a political victory of the Japanese Government over the Chinese Government and that the Chinese Government will suffer the more humiliation because as in the case of the loss of Manchuria the victory was practically uncontested. It is doubtful whether the political and military leaders who advocate resistance to Japan will ignore so favorable an opportunity to attack General Chiang and the present administration and it is possible that General Chiang may be forced in defense of the Government to continue the controversy even though he might prefer to accept the reverse rather than resist Japanese advance prematurely. Many Chinese believe that a major object of Japan’s policy is to weaken the National Government by promoting internal dissension. (For a description of the Government’s predicament by a responsible official see the first half of my 293, July 17, 7 p.m.).

Sent to the Department and Peiping.

Peck