793.94/14304: Telegram

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

526. All types of intelligent Chinese are keenly appreciative of the popular sympathy shown throughout the United States for the [Page 364] Chinese people in their desperate struggle for independence and against Japanese domination. It would be useless to deny, however, that the Chinese are at a loss to explain why this sympathy does not find expression in practical form (1) by refusing to supply war essentials to Japan and (2) by extending credits to China for such commodities. Thinking Chinese would doubtless argue that self-interest alone would incline the United States to refrain from assisting the Japanese Army to invade the rights of American citizens as set forth in our note of October 6 to the Japanese Foreign Office. With reference to the matter of credits Peck87 November 3 inquired of Tsiang, lately Chinese Ambassador in Moscow and now Director General of Political Affairs of the Executive Yuan, what assistance was being given by other countries and was told in confidence as follows: France has sold the Chinese Government 2 lots of 30 military planes each on 6 years credit. The planes are not entirely satisfactory since on arrival parts were missing and during the crisis before the Munich Agreement the Government of Indo-China temporarily detained some planes for possible use by France. On the whole this arrangement and the attitude of France are regarded as liberal and friendly. Great Britain has not extended credit but has given great assistance by permitting the passage of munitions through Hong Kong. The capture of Canton having closed this route, the British are continuing cooperation in establishing the Burma motor road which is practically completed. He said that both this route and through Indo-China are expensive, the cost per ton from the sea to Yunnanfu being about Chinese dollars 1300 and 700 respectively or roughly American dollars 200 and 100 but the Burma cost of 200 dollars may in future be decreased by improvement in details of shipping. Informant thought that the building of railways through Burma or Chinese Turkestan had no practical bearing on present needs which are urgent and immediate.

In connection with the non-aggression pact of August 1937, China obtained from the Soviet Union an unconditioned credit of 1,000,000 Chinese dollars and in the following December a credit of 200,000,000 to be repaid in Chinese commodities without time limit. China refused a Soviet request that China share its available foreign exchange. This money has all been sent [spent?] by the Chinese Government. Informant thought Stalin was invincibly opposed to military intervention on behalf of China although Voroshilov and Blucher88 are both thought to advocate war against Japan. Germany has supplied China with munitions through the medium of the first barter agreement [Page 365] and a second barter agreement was concluded just before the capture of Canton which event made the shipment of German goods into China almost impossible. This second agreement is more liberal than the first in that purchases may be negotiated with individual firms instead of only with the German Government and the firms look to the German Government for payment. Informant felt that the German attitude toward this conflict is ambiguous but he discredits a rumor he reported as coming from Europe to the effect that Germany has extended a loan equivalent to 10,000,000 pounds to Japan with which to purchase 1500 planes on the condition that Japan proceed to attack the Soviet Union simultaneously with a German attack in Europe. Italian aid to China has been negligible in value. Informant made no mention of a refusal by any nation to supply to Japan commodities it needs and he seemed fully conversant with the economic conditions which would make it extremely difficult to comply with the popular Chinese desire that the United States curtail such exports. (Assistance given by the United States was not discussed, otherwise the director would undoubtedly have acknowledged gratefully the silver purchases as other informed officials have done.)

Questioned in regard to the possibility of compromise with Japan, Tsiang stated that of course the so-called Communist faction would refuse short of victory to cease fighting the Japanese invasion but he thought the general attitude of the representatives in the People’s Political Council now meeting and probably of the country at large was adequately expressed by a member of the “Youth Movement” at the meeting of the second instant in saying that he would give unquestioning obedience to Chiang Kai Shek whether the latter decided for prolonged resistance or a compromise for peace. Questioned whether he thought any terms of compromise could be devised possible of acceptance by both sides, informant refrained from discussing the matter beyond observing that such terms would be very difficult to frame.

My inference from informant’s statements and other circumstances is that it can hardly be believed that in practical matters any League member is seeking to implement the League resolution of October 6, 193789 recommending that it refrain from action likely to weaken China’s power of resistance and that it consider extending aid to China (with which resolution the United States expressed itself in general accord90), since I understand League members have not refused to supply Japan with the mechanized equipment or materials [Page 366] therefor that are undermining China’s ability to resist. My opinion is the European nations that have assisted China including Germany and Italy, which did not join in the resolution, are convinced that the victory of the Japanese Army would result in their partial or complete exclusion from trade with China and that they privately would prefer failure of the Japanese attempt to dominate China although their aid to China is nicely proportioned to avoid provoking war with Japan. Much less can I discern any initiative among them in practical matters on behalf of the “more fundamental interest” of orderly processes referred to in the Secretary’s letter to the Vice President of January 8.91 I should say that while the United States is popularly regarded in China as being a more pronounced champion of China’s independence than any European nation, nevertheless Great Britain, Russia and France are thought to be more powerful factors in the Far Eastern situation because whatever their motives their aid to China has been more widely known and more publicly opposed by Japan.

  1. Willys R. Peck, Counselor of Embassy in China.
  2. Soviet Commissar for Defense and Red Army Marshal, respectively, in the Soviet Far East.
  3. See paragraph 13 of report adopted October 6, 1937, Foreign Relations, Japan, 1931–1941, vol. i, pp. 394, 396.
  4. See press release issued by the Department of State, October 6, 1937, ibid., p. 396.
  5. Foreign Relations, Japan, 1931–1941, vol. i, p. 429.