893.00/11–1847
The Vice Consul at Dairen (Patch) to the Ambassador in China (Stuart)90
Sir: I have the honor to submit a summary of political developments in Dairen and the Port Arthur Naval Base Area during the past six months, and to enclose a list91 of reference despatches and telegrams on the subjects discussed.
Sino-Soviet Relations
Since the failure last June of the negotiations between the Soviet and Chinese authorities over the takeover of Dairen there has been no evidence that further progress has been made in this direction. Occasionally it has been mentioned over the radio that the Chinese are negotiating with the Russians, and that they consider the question [Page 540] still open, but there is nothing from local sources to indicate that these negotiations are meeting with any success.
Five months have elapsed since that time, giving the Soviets considerable opportunity to strengthen their position. Under their tutelage, the Chinese Communist Government in the Area has been able to establish itself on firmer ground, and is operating more efficiently. Communist leaders have arrived from Chefoo and elsewhere and new appointees have been made in the government. Last spring, with the news of the imminent arrival of the Chinese commission, many Communists departed, believing negotiations would soon be completed. However, such was not the case, and their position now is stronger than ever before. When the Chinese Government does take over Dairen and the civil administration of the Area they will find it even more difficult than it would have been previously to oust the present puppet Kwantung Government, which will be handed to them on a platter by the Soviet authorities. In Dairen itself it will also be difficult for the Chinese National Government to assume an equal status with the Soviets in the operation of the railway, port etc., in accordance with the Sino-Soviet Treaty of 1945.
Chinese Communist-Soviet Relations
In the furthering and consolidating of their aims and position in the Dairen Area, the Soviet authorities have utilized the Chinese Communists. Chinese with communist beliefs have been chosen to occupy the leading posts in the local government, most of whom would naturally accept this opportunity, even under Soviet jurisdiction, to aid in their struggle against the Nationalists.
Relations between the top Soviet and Chinese local officials appear to be on a rather formal, and certainly not on a cordial and intimate, basis. At banquets, and on other occasions, when they have been observed together, it has been noticed that the Soviet generals and officials pay little attention to the Chinese, and rarely make any attempt to talk with them through interpreters. The Chinese appear bored, and carry out their speeches in a perfunctory manner. Numerous times Soviet officials have stated to members of the staff of this Consulate General how little they care for the Chinese, and if necessary to make a choice, they would prefer the Japanese. This attitude cannot help but have its effect on the Chinese, whether they be Communists or not.
An interesting instance of Chinese Communist-Soviet relations was recently reported. Three hundred Communists arrived in Port Arthur from Shantung Province. This group, through the local labor union, endeavored to institute a program of heavy taxation, as levied in Shantung. The matter came to the attention of the Chinese [Page 541] puppet Mayor, who reported it to the Soviet authorities. As a result, the movement was immediately stopped, much to the annoyance of the Communists.
The Soviet residents have aroused the dislike of the Chinese by their gruff, impolite manner in the stores, on the tram cars etc., and the Chinese often reciprocate in like fashion. The local Chinese will never forget the treatment they received from the Soviet tank troops in August 1945, at which time there was much looting and raping before the Soviet Commandant was able to establish order. However, there are rabid Communists among the Chinese leaders, most of whom are not local residents, and whether they like the Soviets or not, they realize the part they must play under present conditions in Dairen, and the general line they must follow as established by Communist headquarters.
The local press, administered by the Chinese but under Soviet guidance, contains many communiqués from Moscow. Likewise locally published literature is heavily flavored with Soviet doctrine, and the local radio station broadcasts Soviet propaganda.
On November 7th, the 30th anniversary of the October Revolution, the local Chinese government and Chinese labor union organized demonstrations and meetings on a much larger scale than ever before noted in Dairen, even including Chinese holidays. Chinese danced and sang through the streets for three days and Soviet banners in the Chinese language were displayed throughout the city. It is interesting to note, however, that all Chinese stores did not close despite the general holiday closure order.
The Soviets have conducted trade relations with the Communists and other local Chinese apparently whenever it was beneficial to themselves. They have done business both on a barter and on a cash basis, exporting to the Soviet Union whatever of value they could find in the city and Area. They have shipped goods to Communist held territories, and, in conjunction with the local Chinese government, have from time to time imported grain from North Korea to help relieve the desperate economic situation. The Consulate General has reported the transportation of Communists by Soviet ships to North Korea.
In spite of the fact that the Soviets and the Chinese Communists cooperate on an official basis, and have been of some aid to one another, it is evident that there is no love lost between the two. It is believed that the Chinese in Dairen, whether Communist or not, are at least anti-Soviet, and that the majority of them are still anti-Communist, a consequence of the poor economic situation in this Area.
It is thought the experience here of relations between Soviets and [Page 542] Chinese Communists might be of interest in connection with the possibility of the spread of Soviet influence in Communist held areas of Manchuria and North China. Of course the Soviets have special economic and military rights in Dairen and the Area, as defined in the Sino-Soviet Treaty of 1945, and no Chinese regime can exist here without working with the Soviets. If this pressure did not exist, it is not clear how well the two groups would cooperate, or whether there would be any real understanding between them.
Administration of Dairen and the Port Arthur Naval Base Area
In connection with the Soviet Government’s contention that a “state of war with Japan” exists, the Soviet military administration in Dairen has been more clearly defined. The office of the Commandant, which up to recently combined the two offices of Assistant to the Commandant of the Port Arthur Naval Base Area and of the Commandant of Soviet troops in Dairen, has been further separated into two distinct sections. The building has been remodelled to accommodate this plan. On one side is the office of Colonel Grekhov, who is assistant to Colonel General Beloborodov, Chief of Civil Administration in the Port Arthur Naval Base Area. Colonel Grekhov’s assistant is Colonel Pashin. The other half houses the Commandant of Soviet troops in Dairen, Lt. Colonel Polovko and his assistant Lt. Colonel Terioshin.
In May of this year the Commandant of the Port Arthur Naval Base Area assumed the title of Commandant for Civil Administration in the Port Arthur Naval Base Area. This took place at approximately the same time as the formation of the Kwantung Government in Port Arthur which is the civil administration for the Chinese. Matters of importance, particularly dealing with policy, are referred for decision to the Soviet Commandant in Port Arthur, who, in addition to military affairs, also has complete and final jurisdiction over civil affairs of the Chinese in Dairen and the Area. An employee of the office of Colonel Grekhov recently explained this change in title of the Soviet Commandant as signifying the transition from a war to a peace basis under civilian rule, a change which was probably made as a gesture to the Chinese National Government, when it appeared that they were about to take over Dairen.
Until a peace treaty is concluded with Japan, whether the Chinese take over Dairen or not, the Soviets reserve the right to continue their military supervision according to the Sino-Soviet Treaty of 1945, and Chinese civil officials must fulfill proposals regarding defense and security prescribed by the Soviet military commander. In the Area, excluding the city of Dairen, even after the conclusion of the peace treaty, the Chinese civil administration must take into account Soviet [Page 543] interests, and therefore, the present Soviet military administration in the Area, or something very similar, will be maintained.
For the convenience of Dairen residents, the Kwantung Government in Port Arthur has opened an office in Dairen, and the President comes over from Port Arthur twice a week.
When negotiations are finally completed between the Soviets and Nationalists for the takeover of Dairen, the present Kwantung Government, and the majority of its officials (with the exception of its Dairen representatives) will probably be presented in toto by the Soviets to the Chinese Government. The acceptance of this government may be one of the conditions proposed by the Soviets before they will allow the Nationalist Government representatives to enter Dairen.
Population
Large numbers of Chinese have been leaving by junk from Dairen during the past months, and the population has been reduced considerably to an estimated 150,000. The serious economic situation, with little opportunity for employment and high food prices, is the reason for the wholesale departure of Chinese.
Russian Emigrants (holding Soviet passports) in increasing numbers have been arriving from Harbin via North Korea. Over one thousand have already arrived, and it is rumored that many more will come. They report that economic conditions in Harbin are very bad, that there is much unemployment and that living costs are extremely high. The Soviet authorities have promised them work in Dairen, but state there will be no chance to return to Harbin at present.
Despite departure of many Soviets for their homeland it is believed that the Soviet population is gradually increasing, with the consolidation of their hold on heavy industry, the railway and the port. Under present stagnant conditions, it is not so important, but with the opening of the port and the assuming of the control of Dairen by the Chinese Government, the increased numbers of Soviets would be more significant. It is estimated there are approximately 7,000 Soviet civilians in Dairen.
With the fall of Chefoo to the Nationalists, Communist leaders, civilians and soldiers crossed to Dairen. Many individual Communist soldiers, not uniformed and not in units, have been observed around the city, although many of them have already departed for Antung and other Communist areas.
Status of American Property in Dairen arid, the Area
American properties within the narrow limits of the city of Dairen (as interpreted by the Soviets) are recognized as such by the Soviet authorities. Soviet Consular officials have so stated on numerous occasions. [Page 544] These residential properties (there are at least 2) are occupied by Soviets, and under present conditions of disorder and lack of proper police protection, and the added fact that the city is under the military control of the Soviets, it is advisable that they remain in Russian hands. Until the port opens and American citizens and businessmen can again come to Dairen, there is little to be gained in taking them over.
The status of American properties located in the port area (of Dairen) is not clear. American oil company plants are situated in this area, and it is not known whether or not they will eventually be considered to be in the “Free Port of Dairen”. That will probably be determined only after the takeover of Dairen and the peace treaty with Japan is concluded. American properties in Hoshigaura and Kakakashi will be even more difficult to reclaim. These towns are definitely included in the Naval Base Area, and even after the conclusion of the peace treaty, they will undoubtedly be a part of the military zone, the defense of which, has been entrusted to the Soviet authorities according to the Sino-Soviet Treaty of 1945.
It has been reported that the Soviets have offered to buy property in Kakakashi and Hoshigaura belonging to foreigners. However, even if compensation is received, it will probably amount to only a small part of the value of the property, especially in terms of United States dollars.
Position of American Consulate General, Dairen
Soviet Consular authorities in Dairen continue to maintain friendly official relations with the American Consulate General, despite the program of intensified anti-American propaganda which is now being waged against the United States. Food provisions and supplies are forthcoming from the Soviets, and they are always willing to give us priority in fulfilling our domestic and consular material needs. Soviet Vice Consul, S. N. Petrov, who was always exceptionally helpful and friendly to Americans and foreigners, departed in October. The present Consul General, I. Baranov, a typical Soviet diplomat, is more stiff and reserved, and does not discuss matters of policy as Mr. Petrov was occasionally willing to do. However he has shown willingness to talk on official problems.
The local Chinese authorities refuse to return official calls and to maintain ordinary relations.
From reliable reports and general personal observation, it is believed that the Soviet authorities take into consideration the existence of the American Consulate General and often act accordingly. Troop movements, shifting of guns and armaments, take place at night, when they can be least observed. Activity in the port is greater at night [Page 545] than during the day, and it has been reported that loading of certain materials is always done after dark. The railway between Dairen and Port Arthur, and Dairen and Chinchow, transports military equipment only at night. Movement of American Consular personnel is confined to the limits of Dairen and requests to travel further have always been turned down.
A new telephone book was published a year ago, but was immediately recalled after the Soviet Commandant in Dairen observed the strong anti-American propaganda content. Whether they would be so careful now, is another question.
The interest with which they watch our actions is indicated by the number of persons who have confidentially reported to members of the staff of the Consulate General that they have been called by the Soviet secret police, and questioned on American activities. Of course this is similar to the practice in Moscow.
Especially significant is the Soviets’ concern over the use of information obtained here, and their hinting at the possibility of the question coming before the United Nations. Since the departure of Mr. Benninghoff, the question has been posed again by a Soviet official.
Respectfully yours,