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

No. 728

Sir: I have the honor to enclose for the information of the Department a copy of a report prepared by Colonel David D. Barrett, USA, Assistant Military Attaché at Peiping, giving his impressions with regard to conditions in China as they appeared to him upon his return from four months’ leave in the United States.

Colonel Barrett needs no introduction to officers of the Department and the Foreign Service who have served in China during the past ten years, and the Embassy has read his report with great interest and finds itself in substantial agreement therewith. Colonel Barrett offers little that is new to observers of the China scene, but his report is an honest recapitulation of the views of an American official who has served many years in China. It will be noted that Colonel Barrett’s [Page 121] comments again bring to the fore the points which have had an effect upon the situation in China for many decades and have shown little, if any, change within recent years. Colonel Barrett points out the long suffering nature of the Chinese people but also finds growing discontent because their sufferings have not been ameliorated by the termination of the war of resistance,90 but have actually been increased. The increasing burden of taxation adds to this discontent and to the general disillusionment of the Chinese people with their rulers.

The Embassy does not agree completely with Colonel Barrett in his paragraphs 15 and 16 wherein he finds that there is little, if any, anti-American feeling in China. As the Embassy has already reported to the Department, the anti-American student demonstrations of last year in Shanghai, Nanking and Peiping were predominantly anti-Government and were only anti-American in character in so far as certain incidents, such as the Peiping rape case, offered an unassailable excuse for calling demonstrations. Since that time, however, the Embassy considers that anti-American feeling has been increasing. Of course, the most outspoken anti-Americanism emanates from the Chinese Communists, but even in certain Government quarters it is believed that anti-American feeling is present but veiled in many cases merely because there is still the hope that the United States will come to the support of the present regime as it is now constituted. The tendency to blame current ills upon American interference rather than on administrative ineptitude is becoming increasingly apparent in official quarters. Xenophobia in China is difficult to estimate or to assess, but it is always latent and, as has occurred on many occasions in the past, can be turned into a political weapon to serve the purposes of any group. At the present time the United States is in a favored position in China, but this situation may not always prevail and we should not allow ourselves to become wedded to the conviction that merely because the present regime is anti-Communist it is therefore pro-American.

In general the Embassy agrees with Colonel Barrett’s final paragraph to the effect that developments in the situation in China will probably continue to be slow. Facile predictions of economic or political collapse have too often in the past tended to give substance to the trite remark that things are never so bad in China but that they can not get worse. Events may well continue to end with whispers rather than bangs, but during the past few months the process of deterioration has shown signs of marked acceleration and, as Colonel Barrett points out, the present Government has thus far [Page 122] shown itself “totally incapable of arresting the course of this steady deterioration”. Events in China are now governed largely by the civil war situation and accelerated economic and political deterioration resulting therefrom has already developed beyond the stage indicated by Colonel Barrett.

Respectfully yours,

For the Ambassador:
W. Walton Butterworth

Minister-Counselor of Embassy

Report by the Assistant Military Attaché in China (Barrett)

No. R–263–47
Before departing from China for temporary duty and leave in the United States in December of last year, I had been serving continuously in China for over ten years. Consequently, I had become so thoroughly accustomed to conditions in this country that some of my impressions of the general situation were probably not as clear or accurate as those of a person who had not been here so long. In other words, I had been in China so long that I could not see the woods for the trees.
Since my return to China last month, with at least a part of the cobwebs swept from my brain by duty, travel, and leave in the United States, I feel that my impressions concerning the situation are clearer than they would be had I not been for a time away from this distressful country. I hope, accordingly, that I am able to see things not only with a fresh and open mind, but that with a background of almost nineteen years’ service in the Orient, I can see the general picture with some degree of accuracy and understanding.
One of the first things I noticed on arriving in Shanghai was the people on the street look worried. Always before it seemed to me that the Chinese, no matter with what trials and tribulations they may be beset, in general appear carefree and happy. Even refugees fleeing before an advancing Japanese Army always appeared to me much less wretched than one would expect under such circumstances. During the bombings of Chungking in the summers of 1939, 1940, and 1941, I was constantly astonished at the equanimity, not to say apparent unconcern, with which large numbers of the population faced the loss of their families and destruction of their property. Now, however, the ordinary people on the streets of Shanghai and Nanking look definitely worried to me. After talking to a number of Chinese in various walks of life, I am convinced that they are not only worried but discouraged to the point of apathy. During [Page 123] all the years I have served in China, I have been hearing the Chinese people cry “Mei yu pan fa,” over the political, military and economic situation. They are still crying “Mei yu pan fa,” but with a depth of despair that I have never heard before.
As is to be expected, the condition which most alarms the average Chinese is the skyrocketing of commodity prices. During the war, commodities were terrifically expensive, and this of course caused an untold amount of hardship and suffering. Bad as was the situation at that time, however, the people could take some comfort in the thought that their troubles were the inevitable result of war, and there was always the hope that after the dwarf slaves had been defeated, things would get back again to normal. Now China has won the war, but prices are rising to heights never dreamed of during the darkest hours of the conflict. This situation has the Chinese people terribly worried, because there is apparently no relief in sight.
The people with whom I have talked since my return to China (and I have tried to obtain the views of as representative a group as possible, excluding Communists and those with extreme leftist tendencies) are open and bitter in their condemnation of the Government. No one with whom I talked has criticized the Generalissimo, except to say that he is completely out of touch with the real situation in China, and that among the people closest to him are bad characters by whom he is considerably influenced. One conservative and open-minded Chinese said to me, “It has probably been at least twenty-five years since anyone has dared to talk to the Generalissimo frankly and openly, without an axe to grind or without fear of the consequences if he should incur the easily aroused anger of the Generalissimo. It has probably been even longer since the Generalissimo has walked on the streets and mingled with the people like an ordinary man. How can he be expected to understand the real situation in China?”
No one with whom I have talked since my return to China has had the slightest hope that the Generalissimo will ever effect a real reorganization of the government. “Huan t’ang, pu huan yao” (“Change the solution in which the ingredients are suspended without changing the ingredients.”) is the comment I have invariably heard on this subject. A Chinese general who holds an important military post and is absolutely loyal to the Government told me that it made no difference whom the Generalissimo placed in the position of Chairman of the Executive Yuan, as the Generalissimo himself completely dominated this office and would brook no real interference in administering it.
Those with whom I have discussed the present situation agree that the Generalissimo undoubtedly sincerely desires to do right by China, but because of his stubbornness, desire to continue in power, isolation from the people, and influence of certain bad men around him, [Page 124] he has no conception of what steps should be taken to bring about an improvement in the distressing conditions which now prevail.
Observers of the Chinese people have long agreed that ability to eat bitterness is one of their strongest points, but also one of their weakest in that they are too much inclined to resign themselves to conditions as they are without putting up a struggle to improve them. Consequently, they have been accustomed for centuries to enduring the miseries of corrupt and incompetent government without doing anything about it. Never before, however, have I seen the Chinese people so thoroughly fed up with the present all-pervading rottenness of the government as they are now. Those with whom I have discussed this subject admit that since no Chinese official is paid enough to live on, he must either be corrupt or starve. They complain bitterly, however, about the unlimited rapacity of many persons in high places who have already made their pile, and therefore might reasonably be expected to keep their hands somewhat cleaner than the run-of-the-mill official whose opportunities for attaining any degree of economic independence are limited.
I find the ordinary people of China tremendously embittered by the multitude of burdensome taxes which they must pay without seeing the slightest evidence that the money goes anywhere except into the pockets of officials. Examples of these exactions are the “feast tax” in Peking on all restaurant meals costing over three hundred dollars, when three hundred dollars will not buy a single ball of steamed bread; the heavy “sanitation tax” which is supposed to raise money to buy trucks in which to cart away garbage, while in fact garbage is collected in the carts of farmers impressed for forced labor; and the “education tax” on hotel bills and other items, while school teachers starve and school buildings, in the last stages of dilapidation, are frequently occupied by the military. Over these and a myriad of other taxes, the Chinese people are furious. Taxes, they say, they have always had and always will have, but never before have taxes been so burdensome or produced such little results.
The owner of a watch and clock shop told me that if his business paid all the taxes levied on it by the government, he could not keep it going. The only recourse, he said, was to grease the palms of the tax collectors, who for due consideration would forego the collection of the levies which it was their duty to gather.
Chinese who know the truth about Formosa have been outspoken to me in their condemnation of the manner in which the Generalissimo has allowed the affairs of that once prosperous island to be woefully mismanaged. They say they cannot understand why the Generalissimo would give to Chen Yi, a man whom he would not allow to be [Page 125] a provincial chairman during the war, the biggest plum which could possibly fall to an official since the Japanese surrendered and then not check up to see how this man was carrying out his trust. A young, well informed, and by no means leftist-inclined Chinese who has, or did have before the island was virtually ruined by Chen Yi’s beneficent administration, financial interests in Formosa, told me he feared it would never recover from the blows which it has recently been dealt. All he could see for the future was a slow but certain process of deterioration, with the Soviet Union and Chinese Communists taking every advantage of the opportunities presented for fishing in troubled waters.
Not one Chinese with whom I have talked since my return (it must be admitted that I have not discussed the subject with any high civil official) has expressed any criticism of the United States for not granting China a loan. All have frankly stated that the United States cannot reasonably be expected to lend money to China while she is carrying on a civil war; and that the past record of China in spending loans has not been one to inspire the United States with a desire to grant another one. When I have asked if China would accept a loan with strings attached concerning the manner in which the money is to be spent, the answer has been in the affirmative. The opinion has been generally expressed, however, that both the government and certain groups in the United States would undoubtedly raise the cry that the attaching of strings constituted an unwarranted interference in the affairs of a friendly sovereign nation.
The Chinese general to whom I have referred above, whom I consider one of the best informed and most fairminded Chinese I have ever met, expressed the belief that the only thing which keeps the Kuomintang in power is the bayonets of the Chinese Army, which still has but one loyalty, the Generalissimo. He stated that the power of the secret police had decreased considerably since the death of Tai Li,92 but the people were very definitely held in line by the Army. When I asked the General how long he thought the Kuomintang could stay in power without the Army behind it, he did not reply, but only laughed.
The general opined, and others with whom I have talked agree with him, that the Kuomintang will never relax its grip on China unless it is driven out by force of arms. The general was not unduly pessimistic about the new Constitution, but he was doubtful if through it the people will ever be allowed to exercise real suffrage until the power of the Kuomintang is broken. Asked when he thought this would be brought about, he said it was very difficult to make a prediction. [Page 126] He thought it unlikely that it would come in the near future, and it might not happen for many years.
Both before leaving China last year and while I was in the United States, I heard a great deal about anti-American feeling in this country, particularly among the students. It was my good fortune to miss the anti-American demonstrations last year in Shanghai, Nanking and Peiping, and my opinions on this subject must be judged accordingly, but as far as I am concerned, I have never at any time personally seen any evidence of anti-Americanism in China. In my opinion, the anti-American demonstrations were engineered by a hard core of Communists and professional agitators working under a group which in every country is volatile and easily aroused to mass action. I doubt if a fraction of the individuals who took part in the demonstrations really had any hard feelings toward America. This opinion is supported to some extent by the statements of Americans who witnessed the demonstrations who have told me that while the attitude of the participants in general was decidedly hostile, and many inscriptions on banners and shouted slogans were insulting, whenever one talked to an individual demonstrator or a small group, the attitude of the persons addressed was reasonable and their language polite.
Both before leaving China and since my return, I have asked many Chinese about the feeling of the Chinese people toward America and the consensus of their statements was alwavs that the United States is the best friend China ever had or ever will have. Allowing for Chinese politeness, I think this is the real feeling of all thinking Chinese, except the Communists and a percentage of those under the control or influence of Communists. In other words, I do not believe our reservoir of goodwill in China has been drained or will be in the near future.
In view of what I have written above, it is unnecessary for me to say that the present situation in China appears to me extremely bad. The most alarming feature is undoubtedly the sky-rocketing of commodity prices caused by the steady depreciation of the Chinese currency in terms of the U. S. dollar. The recent dismal failure of the attempt to hold the Chinese dollar to a pegged rate of 11900 demonstrates clearly the inability of the government to control the black market in United States dollars. Here in Peking, U. S. dollars are being bought today more or less openly at about 22,000. Since the most recent break in the Chinese dollar, prices of commodities have been revised upward, sometimes as often as twice a day, almost exactly paralleling the rise of the U. S. dollar, or if one prefers to put it the other way around, the fall in Chinese currency. To cite an [Page 127] example, for a brief period in which the currency was being held fairly steady at the present official rate, a bag of flour in Peking costs about CNC 120,000 (I remember well the time when the local populace cried to heaven when the price rose to CNC $3.00). Now that the black market rate for the U. S. dollar is around 22,000, the price of flour has risen about one hundred percent.
Rise in the price of flour works the same hardship in North China that soaring rice prices do in Shanghai. In North China another important factor, the price of coal, is injected into the situation, as it is almost impossible to get along in the North during the winter without some heat other than that needed for cooking. In my opinion, the Chinese people can stand almost any degree of rotten government provided they can keep from starving and freezing. From the present look of things, the time when a large percentage of the population will no longer be able to get enough to eat, and come winter may freeze to death, is not far off.
In the face of the conditions in which I have commented above, what is likely to happen? From the experience of seventeen years’ service in China, I would say probably nothing, at least not for a long time. Since 1924, when I first began to study the situation in this country, China has frequently appeared on the brink of complete economic collapse and sometimes even a peasant revolution. These disasters have not yet come, and even though China appears at the moment to be facing the worst crisis in many years, they may not come now or, at the worst, for a long long time. What I expect to see is a steady deterioration in the over-all situation until some day even the Chinese cannot stand it any longer and the lid will blow off. Long before that time, however, some outside power may have taken a hand in the China situation. In my opinion, the present government of China, without help from the outside, is totally incapable of arresting the course of this steady deterioration.
David D. Barrett
  1. With Japan, 1937–1945.
  2. Former head of the secret police system.