Monday, Jun. 17, 1935

Silver, Slaverings & Solutions

Japan was slavering at China's gates last week, threatening to swallow both Peiping (once Peking) and the great North China port of Tientsin. Meanwhile Charles James Fox, president of Tientsin's American Chamber of Commerce, was saying: "In my opinion, the Roosevelt Government's silver policy is harming American interests in China more than are the Japanese."

In Shanghai that sturdy pillar of the U. S. business colony, Frank Jay Raven, master of the "Raven Interests" (banking, real estate, insurance) which had assets of $70,000,000 as recently as last December, had just been shaken down. He blamed the collapse of his American-Oriental Banking Corp., much patronized by missionaries, the U. S. Marines and Shanghai prostitutes, on President Roosevelt's artificial jacking up of the price of silver, on which everything turns in China. "I am financially broke, but we are protecting our creditors," said Mr. Raven. "All my resources are going into liquidation of my companies. American silver-buying drained China of her silver, which froze credits, which in turn is paralyzing business." The Chinese Government, having begged and implored President Roosevelt for months to stop kiting the price of silver, desperately imposed the death penalty on Chinese caught smuggling out the vital metal--to sell it abroad at "Roosevelt prices." Last week the U. S. President did something for China, nominated U. S. Minister Nelson Trusler Johnson for the newly-created post of Ambassador.

With China more than ever prostrated by her white-man-made silver crisis, Japanese Army commanders in Manchukuo and at Boxer Protocol garrisons in North China proceeded to make impossible demands on the Chinese Government, demands the mere granting of which would mean the abdication of the Chinese Government in North China.

As handed to sleek, sensitive Chinese War Minister Ho Ying-chin, who was assigned in 1933 to defend North China and promised "We shall also reconquer Jehol and Manchuria!" the chief Japanese demands were :

1) Removal and "punishment" of General Yu Hsueh-chung, Governor of Hopei Province (containing Peiping and Tientsin), his offense having been too stiff an attitude toward Japan;

2) Withdrawal of the Chinese Government's troops from Hopei, leaving the Province in the hands of troops of a new Chinese Governor acceptable to Japan;

3) Withdrawal from North China of all branches of the Chinese Government's National People's Party or Kuomintang.

In U. S. terms such demands were equivalent to an ultimatum from Tokyo demanding that President Roosevelt disband the Democratic Party on the Pacific-Coast, appoint a Japanese puppet Governor of California and withdraw all U. S. military forces to east of the Rocky Mountains.

First sign that China was yielding came after Japanese demonstrations in and over Tientsin with troops, tanks and bombing planes, the latter thundering low over Tientsin's foreign concessions. Promptly Governor Yu, whose dismissal Japan had demanded, was dismissed and departed southward with his troops. Five trainloads of Government troops in Peiping were next sent south by Chinese War Minister Ho who prudently imposed iron censorship to keep the troops from knowing why they were being withdrawn, fearing they would mutiny if they knew his treachery to China. Japanese dispatches quoted China's Ho as saying privately to Japan's North China Chief of Staff Col. Takashi Sakai: "I now fully understand what the Japanese want. I hope they realize my sincerity in seeking peaceful solution. I am convinced they will be rewarded. I do not expect any outward incidents."

Most Chinese were convinced that War Minister Ho had himself been rewarded with Japanese cash last week. During one of his own Chinese civil war campaigns he frankly conquered by bribery, advertising what he would pay to Chinese enemy commanders who deserted to his side. Last week, however, though General Ho apparently yielded to all Japan's demands in the name of his Government, there was no confirmation from Nanking or wily, wasp-waisted little Chinese Dictator Chiang Kaishek. The entire Chinese Government kept mum.

Somewhat irresolutely Japanese North China Chief-of-Staff Colonel Takashi Sakai said that Japan had given the Chinese Government until June 20 to carry out the demands, but might extend this period of grace. "We intend to say nothing more," Col. Sakai suavely concluded, "other than to express our hope for the happiness of Eastern Asia. We believe the Chinese appreciate this expression of sincerity. If they do not appreciate it we must regard the Chinese as racial traitors."

No racial traitor in this oblique Japanese sense was Chinese General Shang Chen, sent to Tientsin last week to replace dismissed General Yu. General Shang popped around at once to pay a "courtesy call" on Tientsin's Japanese garrison commander. Lieut.-General Yoshijiro Umezu who hospitably opened bottle after bottle of the best champagne, put on a drinking bout with lusty toasts "to amity!"

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