893.00/8–844
The Second Secretary of Embassy in China (Rice) to the Secretary of State 28
[Received September 7.]
Sir: I have the honor to refer to Secretary Drumright’s despatch from Sian no. 28, June 28, 194429 on the subject of conditions in Shansi province and to report as follows miscellaneous information in regard to that province obtained, except where otherwise indicated, from James W. Schneider and Vaughn Meisling, respectively a captain and a major in the U. S. Army, who from July 17 to 20, 1944 visited the headquarters at Konanpo, Shansi, of General Yen Hsi-shan, Commander-in-Chief of the Second War Zone.
Summary: Chinese forces of the Second War Zone in central western and southwestern Shansi comprise eight armies; the Japanese have in that province a portion of one division around Tatung and various elements of the Japanese First Army in other sections of the province. Yen Hsi-shan is opposing the Chinese Communists militarily and through the application of policies similar to those which they enforce in northern Shensi. A number of Yen’s former subordinates now serve the Japanese but supply him with a certain amount of [Page 503] military intelligence. To judge from his reports, the Japanese have torn up a portion of the Sin-Yao Railway north of Taiyuan (Yangkü) but are shipping large quantities of wheat and other foodstuffs and raw materials from Shansi to Manchuria and (probably) Japan over the Cheng-Tai Railway. Yen Hsi-shan gave visitors the impression of a Chinese full of ideas, some good and some childish, who grumbles against the Central Government authorities but who is genuinely anxious to cooperate with the American military authorities in the war against Japan. (End of Summary.)
[Here follows report on military matters.]
Yen Hsi-shan’s Economic Policies: In Captain Schneider’s opinion General Yen is fighting the Chinese Communists not only militarily but also by himself putting into practice a form of communism. He states that private capitalists cannot operate in the area controlled by General Yen. Stores are run by the government (the people may buy goods from these stores up to certain monthly amounts; they must pay double prices for any goods bought in excess of their monthly quotas). Landlords have been deprived of land over and above the amounts they are able themselves to till. As in the Communist areas, everybody must cultivate a vegetable plot and importation and use of goods from other areas is restricted and governmentally controlled. (Thus nobody may smoke cigarettes, which are not manufactured in the area controlled by Yen Hsi-shan, but people may smoke pipes.)
Yen Hsi-shan explained to Captain Schneider the differences between his own land policies and those of the Communists. This explanation was made in terms similar to those used for the same purpose on the occasion of the visit to Konanpo in May, 1944 by a group of Chinese and foreign journalists. (See the attached translation of General Yen’s statements.30) After hearing General Yen’s explanation, Captain Schneider decided that he could see no essential differences between the land policies of the two regimes (the Communists’ and General Yen’s).
General Yen’s Relations with the Communists: The Chinese Communists maintain a liaison office near General Yen’s headquarters. Relations between him and the Communists appear, however, to be bad. As will be noted from portions of the afore-mentioned press account, he considers revolution to be the Communist’s stock in trade and does not believe they can be expected to give up their attempts to seize governmental authority. He and his Chief of Staff accused them of having failed to obey the orders of his headquarters ever since September, 1937, of launching attacks on his forces while the latter were engaged in fighting the Japanese, of avoiding conflicts with the enemy and of engaging in eighty-six clashes with his forces in three early months of 1944 alone.
[Page 504]General Yen also stated to Captain Schneider and to the newsmen that he has an academy for the reformation of Communist agents whom he captures, that after three months in this school those who say they still believe in Communism are sent back to Yenan but the rest are given work to do in his own area. Yen added that 95% state, after finishing the course, that they believe in his policies.
General Yen informed Major Meisling that he had received information from one of his agents in Peking purporting to show that there had occurred in July, 1944 a change in the Japanese official attitude toward the Chinese Communists. According to this report, a Japanese headquarters at Peking had ordered that thenceforth the Chinese Communists should not be referred to as Communist bandits as theretofore but as members of the Yenan regime—thus treating them, as to nomenclature, the same as adherents of the Chungking Government.
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Respectfully yours,