The Ambassador in China ( Stuart ) to the Secretary of State
[Received August 11—5:28 a. m.]
1482. Highly reliable source reports Manchurian leaders accepting Government offers in settlement Peiping shooting of northeastern students. Manchurian demands included certain unspecified political measures as well as monetary settlement and punishment officers and men responsible for shooting. Though these demands were highly onerous in totality, they were all accepted by Government, which only required that true terms of agreement not be publicized. Source further reported that no overt moves by northeasterners against Government likely in immediate future, but that Manchurian will accord no support to any Government headed by Chiang and his immediate followers and will give such government only minimum necessary cooperation. Source also said that northeasterners will give wholehearted support and cooperation to almost any Chinese Government not headed by Generalissimo and followers; that this support would be financial, political, and military and would include all of resources of Chang family; that military support includes large forces under command Chang Hsueh-shih,46 now serving with Manchurian Communists.
Source of above is American official quoting interview with well-known Manchurian political personage who offered information on basis his name not be revealed. We believe this information probably [Page 413] correct. Since Government post-war occupation Manchuria, local leaders increasingly opposed to continuation Nanking control. Prior to this occupation it was their hope that relations between Central Government and Manchuria be after pattern obtaining 1929–1930 wherein Manchuria had large amount autonomy internal affairs, permitted existence Kuomintang organization, accepted Kmt direction in field foreign relations, contributed revenues to national treasury and generally integrated administrative service with balance country. When Government ignored those requirements, carried out military occupation and set up corrupt and incompetent civil administration, it thoroughly alienated all Manchurian classes and rejected popular support available to it in that area.
Manchurian leaders now maintain close liaison with other dissident and potentially dissident groups, and are doubtless eager support any new regime, whether national or regional, in return for satisfaction what they believe to be just claims. However, as long as control over their source supplies remains in hands Fan Han-chieh,47 generally regarded as personally loyal to Generalissimo, no overt break seems likely.
We regard claim that military and other resources of Chang family would be available to new Government is probably true, and we also believe that these resources may well be great. Most Manchurian leaders apparently desire return of Young Marshal to power, and claim that he has large following among all classes in northeast. Also, it is entirely possible that those forces commanded by Chang Hsueh-shih and now carried on Manchurian Communist order battle would rally to Young Marshal should he return to Manchuria, or to any other Manchurian Government headed by his supporters. Above is in general agreement with Mukden’s 414 of August 648 and with other reports on North China and Manchurian situation.
Sent Department, pouched to all Consulates in China.