Foreign Relations of the United States Diplomatic Papers, 1937, The Far East, Volume III

793.94/8587: Telegram

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

Nanking, April 19, 1937—noon.
[Received 12:10 p.m.]

167. 1. According to the press, Kawagoe will proceed May 2 to Tokyo to “report on Sino-Japanese negotiations of the past year.” He gave an interview to the semi-official Central News Agency, Nanking, April 15, which has caused some comment in vernacular papers and this, together with his forthcoming departure, is apparently responsible for Japanese press despatches from Nanking outlining a “six-point program” which he reputedly will place before the Japanese Foreign Office. The Embassy believes that these reports give a fairly accurate picture of the present state of Sino-Japanese negotiations and relations.

2. In the interview Kawagoe reputedly stated (1) while there is some ground for the Chinese stand that removal of political obstacles must precede discussion of Sino-Japanese economic rapprochement, economic cooperation may also lead to settlement of political differences; (2) there is no truth in the belief that Japan expects through an economic rapprochement to unfold her political program by acquiring necessary raw materials from China; (3) economic cooperation will benefit both countries and help maintain the people’s livelihood in China and Japan; (4) he had only newspaper information concerning possibility that Kodama (head of recent Japanese Economic Mission) might be appointed Ambassador to China but there were certain groups in Japan favoring the appointment of economic leaders to diplomatic posts and if this proposal is adopted Kodama would be an ideal choice for China; (5) outward smuggling of copper coins by Japanese subjects is a problem which can be settled if Chinese authorities in various localities approach Japanese officials for necessary assistance, but smuggling in North China is due to special conditions and cannot be regarded in this light; (6) the East Hopei régime is theoretically a domestic issue for China but personally he hoped that by the time general Sino-Japanese relations are amicably readjusted, Japan would be able to hold negotiations on the matter with China and give a certain degree of help.

3. The “six points”:

(1) Following liquidation of the Liangkuang⁷⁴ crisis and the Sian revolt the Chinese Government is driving with full force toward national unification;

(2) While there is no warrant for Chinese hopes of a complete removal of the existing deadlock in Sino-Japanese relations, Japan should concur in Chinese hopes to a certain extent while insisting on seeking practical benefits;

(3) Sino-British economic collaboration, proceeding with extraordinary tempo and magnitude, is an expression of British policy towards the Far East in general and China in particular, and hence should receive Japan’s full attention;

(4) Japan should not look upon China’s 5–year economic reconstruction plan with indifference;

(5) It is necessary to readjust and replenish the front of Japanese economic activities in the same manner, systematize the various organs established in China by different Japanese ministries and organize a sort of “economic embassy” as their controlling organ;

(6) Japan should negotiate sympathetically with China in connection with China’s expected demand for abolition of extraterritoriality.⁷⁵

4. The vernacular press criticizes Kawagoe’s statements on grounds that

(1) Japanese desire for national economic cooperation has as motive the avoidance of a wholesale settlement of political questions;

(2) an “American policy form” of economic penetration has already been fitted to Peiping, Tientsin, Shensi and Shantung and settlement of economic questions favorable to Japan (construction of the Tsangchow-Shihchiachuang Railway, exploitation of the Lungyen iron mines, establishment of air traffic between China and Japan, purchase of cotton mills, cultivation of cotton, development of harbors, purchase of Changlu salt at reduced prices, reduction of import tariff, et cetera) will give Japan a firm grip on China;

(3) the statement that smuggling in North China is a domestic problem is irresponsible since the motive behind organized smuggling is to force reduction of Chinese tariffs;

(4) similarly Japan is attempting to use the East Hopei régime as a lever to force settlement of Sino-Japanese relations “as a whole”;

(5) the statement that “special conditions” obtain in North China is untenable since North China is an integral part of China.

5. By mail to Peiping, Shanghai, Tokyo.

Johnson

74. The two Kwang provinces (Kwangtung, Kwangsi).
75. See also vol. iv, pp. 634 ff.