793.94/13515: Telegram
The Ambassador in China (Johnson) to the Secretary of State
[Received July 20—2:24 p.m.]
362. The statement in my 355, July 16, 10 a.m.14 that the Japanese intend to use the capture of Hankow as a symbol to their people of the end of the military phase of their campaign in China calls for an estimate of the possible effect of the loss of Hankow upon the future ability of the Chinese Government to continue its resistance to the Japanese. To that end I have asked McHugh, Jenkins, Dorn15 and the Consulate General for their opinions. The following estimate is based upon their study of the situation.
From a military point of view Hankow forms the third corner of a great triangle which to date has circumscribed the hostilities—as Peiping, Shanghai, Hankow area. Until Hankow is taken the Japanese forces are continually being stretched farther and farther from the base of this triangle—the Peiping-Shanghai line and down its hypotenuse from Peiping toward Chengchow. The strain on the Japanese lines of communication has therefore been constantly increasing. The merging of the two segments of the base with the capture of Hsuchow was an alleviating factor but was largely vitiated when the Chinese blocked the advance on Chengchow by breaching the Yellow River dykes. By holding the Hankow–[Chengchow?] segment of the hypotenuse, the Chinese have maintained contact with a vast area to the north and northwest which has been a constant menace to the whole right flank of the Japanese area, safeguarding their Sian–Lanchow route of supply from Russia.
When Hankow falls into Japanese hands a considerable part of this tension is bound to be relieved. The opening of the river will greatly simplify the question of supply for the Japanese Army. Not only will it be less susceptible to interruption by guerrilla warfare, as in the case of the railroads, but by establishing their advanced base at Hankow the Japanese will be able to support their troops on the Peiping-Hankow hypotenuse from two directions, thereby facilitating any operations to the westward.
[Page 231]It is not yet clear just how the Japanese intend to proceed in their attack on Hankow, except that their original main effort from the northeast now appears definitely to have been abandoned, and that an advance up the river will figure largely in the present effort. Presumably they will first attempt to take Nanchang, thus depriving the Chinese of control of the largest air base in China and securing it for themselves from which they can conduct aerial operations against the whole of Central China. This will restore to them complete air superiority for their advance on Hankow, the lack of which seems to have handicapped them to some extent during their recent river operations around [Kiukiang?], and will be an important factor in the coming campaign.
In their advance upon Hankow the Japanese may adopt either of the following moves, and the nature of the resultant situation is largely dependent upon how they proceed. They may rely on (1) a direct thrust up the river of combined military and naval operation, or (2) they may elect to drive overland from Nanchang either to Wuchang or straight to Changsha.
There has been some speculation in fact that they might coordinate this second move with one from the north through southern Shansi and down the Han River valley in a gigantic pincers movement. It seems more likely at present however that their present operations in western Honan and southern Shansi will keep them fully occupied in those regions for some weeks to come and probably will eventually lead them against the Sian–Lanchow area rather than down the Han River valley. In fact, if they choose the latter, then a new and separate force will have to deal with the former.
The Chinese actually occupy very strong positions in the areas they are now holding and they will be further assisted during the next few weeks by the summer floods. It remains to be seen however how successful they will be in their defense, observers are now looking for the blind spots, for experience has proved that the Chinese have never been able to coordinate their defense. The efforts of the majority have consistently been nullified by the negligence, stupidity, failure to obey orders or failure to fight on the part of a few.
If the Japanese take Hankow by a direct push up the river, they obviously will still have to cope with the Nanchang–Shanghai–Wuchang area as well as some very extensive mopping up operations to the north of Hankow. Hunan is actually the strategic center of China, and the Japanese can never really control it and the continuous areas to the westward until they take Hengyang, a junction point south of Changsha on the Canton–Hankow Railway where roads and rivers connect with the west and southwest.
Three weeks ago it appeared that the Chinese High Command did not intend to make a serious effort to hold Hankow. This attitude [Page 232] now seems to have changed as present indications are that the Chinese intend to make the taking of Hankow as expensive as possible. To this end large numbers of troop[s] have recently been sent to the Nanchang area. Moreover, Chiang Kai Shek has been making extensive preparations for a long time to hold western Hunan. One of his most trusted lieutenants Chang Chih Chung was installed there as Governor early this year and 25 divisions of fresh troops have been in training there under younger officers who are themselves products of the Generalissimo’s own schools and are intensely loyal to him. Reliable foreigners state that a large majority of the war supplies which have come up over the Canton Railway in recent months have been cached in western Hunan.
The loss of Hankow will without doubt be a serious blow to the Chinese strategically as well as politically and economically. The strategic effect has already been indicated. Politically it will separate the Government from access to the North where fighting and defense measures are now in the hands of the former Communists and the remains of the northern provincial troops. How serious this effect will be only time can tell. It is not expected that it will greatly affect the activities of the guerrillas in the northern areas as the Government has never really been in very close touch with them. And there has been no evidence yet of a tendency on the part of the forces left in these areas to desert the cause. From a political point of view the Government will be thrown into closer contact with the southern areas where a tendency toward opposition to the Government has for a long time been more than evident. The consolidation of supplies in western Hunan mentioned above has been in anticipation of this as well as of invasion by Japan of Hunan, Kweichow, Kwangsi area, backed by Szechwan and Yunnan, promises to continue perfectly active for a considerable time.16 In some respects the Government will be strengthened politically by the loss of some of the provincial levies which will be left behind in the north to fight as guerrillas. The mere existence of this strongly nationalistic government center to the south will in itself make it difficult for the Japanese military machine to stop at Hankow.
Economically the loss of Hankow will be a much more severe blow than a military or political one. When the Government loses Hankow it will lose all of the revenue that the trade of Hankow during recent months has been able to give it. Such statistics as are available indicate that exports from Hankow during the past few months have [Page 233] averaged about Chinese currency dollars 5 million per month. It is estimated that under the present exchange control set up by the Government this trade has given the Government control over about United States dollars 1,475,000 per month of foreign exchange which has been useful in its foreign transactions. Most, if not all of this, will be lost to the Government with the loss of Hankow and the interruption of traffic on the Canton–Hankow Railway. In addition there will be the loss of revenue from customs (Hankow receipt being estimated at Chinese dollars 1,000,000 per month) salt taxes and consolidated taxes, Hankow being a manufacturing center producing large quantities of cigarettes. An indirect loss will result from the opening up of the river and the revival of trade at Shanghai for the blocking of the Yangtze has practically halted the trade of Shanghai. The loss of Hankow means the loss of the last great Chinese industrial center with its cotton mills and other factories and of the revenues which this industry has brought to the Government. It has been said that this will have its effect upon the financial stability of the Chinese Government. However, there is reason to think that a collapse of Chinese currency will have a far more serious effect in the occupied areas and the economic position of Japan than upon the Chinese, for in the areas under their control Chinese currency will continue to serve the Government and the people as a medium of exchange for domestic transactions.
It is our conclusion that serious as the loss of Hankow will be it does not mean the collapse of Chinese resistance. We find it difficult to believe that the taking of Hankow will enable the Japanese to call a halt to Japanese military campaign in China or even materially to reduce the number of Japanese troops that will be necessary to garrison and hold the areas of occupation. The task of eliminating the irregular guerrilla forces scattered all over and around the area of occupation will constitute a major command and it is believed that the Japanese military will find sufficient threat left in the Chinese Government that remains to make them feel impelled to continue the campaign westward—Hankow thus resulting in another and more expensive Nanking rather than a final victory marking the end of hostilities.
McHugh and Dorn would like substance of the above to be communicated to their Departments.
Repeated to Shanghai, Peiping. Shanghai please repeat to Tokyo.