793.94/3743
The Consul General at Mukden (Myers) to the Secretary of State
[Received January 30.]
Sir: Ref erring to my despatch No. 493 dated December 2, 1931, to the Legation, Peiping,14 entitled “Some Aspects of the Japanese Occupation” concerning activities of the Japanese for the advancement of their interests, I have the honor to present a brief résumé of the railway situation in Manchuria as affected by the Japanese occupation.
Railways have, in the past, been one of the most important Sino-Japanese problems in Manchuria. The Chinese began constructing railways on their own behalf in 1925 and at a very early stage these railways met with objections from the Japanese, the Mukden-Hailung and Kirin-Hailung lines because of their forming a line parallel to the South Manchuria Railway and the Kirin-Hailung additionally because of its being part and parcel of the Kirin-Kaiyuan project provided for by one of the so-called Nishihara agreements (Preliminary Agreement for a loan for railways in Manchuria and Mongolia—September 28, 1918). It may be mentioned here that the alleged secret protocols to the Sino-Japanese Treaty of December 22, 1905,15 interdict the construction of parallel lines to the South Manchuria Railway.
On the west of the South Manchuria Railway, the South Manchuria Railway Company built for the Chinese the Ssu-Tao and Tao-Ang (Ssupingkai-Taonan and Taonan-Angangchi) lines which, for the Japanese, served the double purpose of providing valuable feeders for the South Manchuria Railway and of tapping territory within the zone of the Chinese Eastern Railway. The subsequent construction [Page 12] by the Chinese of the Tahushan-Tungliao line (completed at end of 1927), which connects with the Chengchiatun-Tungliao branch of the Ssu-Tao Railway at the latter point, gave the Chinese a circuitous but direct all-Chinese rail route between Mukden and Tsitsihar. Politically this route proved a great asset to the Chinese who were thereby enabled freely to move troops between north and south Manchuria without Japanese permission which had to be obtained for the movement of Chinese troops over Japanese railways. Commercially it was of considerable potential importance, especially in view of the building of the port of Hulutao. However, the Japanese, for obvious reasons, emphasized this phase of the railway problem, for which they were given ample grounds by the Chinese who not only failed to make a serious effort to meet their financial obligations to the South Manchuria Railway Company on account of construction costs and unpaid interest charges but by devious means deferred the reaching of an understanding over the division of outgoing freight traffic originating north of Chengchiatun while at the same time redoubled their efforts to divert traffic from the South Manchuria Railway for the benefit of their lines. It may be mentioned in passing that Japanese protests against the construction of the Tahushan-Tungliao line on the basis of the above mentioned alleged secret protocols were totally disregarded and the work of construction was completed as rapidly as possible.
Now the situation is completely reversed. The Mukden-Hailung-Kirin lines which were operated as feeders for the Peiping-Liaoning Railway—a through passenger service was operated daily between Kirin and Peiping prior to September 18, 1931—now feed only the South Manchuria Railway lines. The Peiping-Liaoning Railway tracks, under the South Manchuria Railway main line, connecting the Huangkutun and Mukden stations were destroyed by Japanese troops on the night of September 18th and have not been repaired to date. Conversely, the connection which the Chinese desired to make at Kirin between the Kirin-Hailung and Kirin-Tunhua lines at the Kirin-Changchun Railway station and which the Japanese opposed prior to September 18, 1931, was made on October 16th with their approval. Although the Mukden-Hailung (a Chinese owned and built line) is operating under a Chinese management, Japanese advisers completely control its financial operations. The status of the Kirin-Hailung Railway, built by the Kirin provincial government, has not been altered as far as is known. The Kirin-Tunhua Railway, one of the Japanese built lines, has, for purposes of operation, been combined with the Kirin-Changchun Railway and is under the direction of the South Manchuria Railway Company, as is the latter line.
The Ssu-Tao and Tao-Ang lines which are now under one Chinese [Page 13] Director General although probably still maintaining separate head offices likewise are controlled by the South Manchuria Railway Company and according to a recent Japanese press report the Tsitsihar-Koshan Railway, Chinese built, is under the management of the Tao-Ang Railway (there is one Chinese Director General for the three lines). The Chengchiatun-Tungliao branch of the Ssu-Tao Railway has been out of commission since the latter part of October and recently Japanese Headquarters reported that some twenty-five kilometers of trackage have been totally destroyed. Through passenger trains between Ssupingkai and Tsitsihar and between Mukden and Tsitsihar since December 20 are being operated over this route and Japanese railway guards are stationed along these lines as far north as Angang-chi. In other words, these two lines are operated as part of the South Manchuria Railway system and through the Chinese Director General some control, at least, is exercised over the Chinese Tsitsihar-Koshan line.
Another serious complaint of the Japanese against the former Chinese authorities was their refusal to carry out the agreements for the construction of the extension of the Kirin-Tunhua Railway to the Korean border (Kirin-Kainei Railway) and for the construction of the Changchun-Talai Railway. The building of these lines has been the subject of several agreements, the last one having been signed at Peking in May 1928 by Chang Tso-lin’s government. Recently reports have appeared in the press on several occasions to the effect that the Japanese intend building these lines in the near future. It was reported that a party of Japanese surveyors was sent over the proposed route of the Tunhua-Kainei line during the past two months and that some equipment for construction purposes has been sent to Tunhua. Economically and strategically the building of this line at this time does not appear urgent. It is possible, however, that political considerations in Japan may induce its early construction. Although no definite decision may have yet been reached, well-informed Japanese have expressed the opinion that this project will probably be started in the spring of 1932. Other projects, it is thought, are likely to be deferred.
Although it may be premature at this time to make definite statements in regard to future railway developments in Manchuria, it can safely be stated that the Chinese scheme of railway construction, as prepared by the Communications Commission at Mukden in 1930, is dead. The railways that were built with Japanese money (South Manchuria Railway Company) and are now being operated as a part of the South Manchuria Railway system are likely to continue to be operated in that manner for a considerable time at least. According [Page 14] to a recent authoritative statement by a high Japanese diplomatic officer in China to an American press representative (New York Times), Japan has no intention of depriving the Chinese of these lines but will not return them before certain conditions are fulfilled. The existence of a stable and responsible government in China from which Japan will require a blanket stipulation in a new treaty recognizing direct negotiations between Japan and the local governments for the settlement of Manchurian problems and subsequently the conclusion of these negotiations were given as the requisite conditions. This program, if adhered to, may not be realizable for many years for very obvious reasons, a fact which is no doubt fully appreciated. At least it gives the Japanese operation of these lines an appearance of impermanence.
Too, there are other railways to be built in Manchuria with Japanese funds as provided for in Sino-Japanese treaties, the implementing of which is one of the proclaimed objects of the military occupation. Japan obviously intends to dominate the governments in Manchuria no matter what may eventuate and consequently it will control directly or indirectly the whole network of railways in Manchuria with the possible exception of the Chinese Eastern Railway. In view of these circumstances, it is reasonable to expect that railway construction in the future will be carried on either by Japanese or by Sino-Japanese interests, not by independent Chinese interests.
In the past few years, the Chinese built lines have been large purchasers of American equipment, such as steel rails, locomotives and freight and passenger cars—the Kirin-Hailung line has only American equipment—while the Japanese built lines have bought very little American railway material—no rolling stock at all and only a small part of their rail requirements. These lines have purchased Japanese equipment. Under these circumstances, the outlook for the sale of American railway equipment in Manchuria is by no means bright. The “open door” may not be closed but indications are unmistakable that the market is no longer open.
Respectfully yours,