W.P. COATES

Telephone:Temple Bar 5032

FROM THE PRESS DEPT.                                                                                                                                                               LONDON, W.C.2

September 28, 1933

No.52 NEWS BULLETIN

RELATIONS BETWEEN RUSSIA AND JAPAN

September 18, 1933, was the second anniversary of the intervention of Japan in Manchuria and the seizure of Mukden by Japanese troops. In a declaration on this subject, the new Japanese Foreign Minister, M. Hirota, stated that the creation of Manchukuo should not divide Japan from China but should, on the contrary, serve as a bridge to unite them in a closer friendship.

The creation of Manchukuo has indeed served as a bridge, it would be more correct to say as a stepping stone to unite more Chinese territory to Japan. The Japanese have extended their influence to Jehol and Japanese troops now occupy a large part of the adjoining province of Chahar. The Japanese are also practically in possession of the territory along the Luan River and Japan has a powerful grip on Northern China by her occupation of the important passes through the Chinese Great Wall and the town of Shanhaikwan.

During the last few weeks Japan has, it would appear, taken up an even more threatening attitude towards China. The friendly embrace is getting warmer and warmer.

But it is not alone China that Japan is threatening. The relations between Japan and the U.S.S.R. is giving rise to serious uneasiness.

During the whole period of Japanese intervention in Manchuria, the Soviet Government, true to its policy of non-intervention and of the maintenance of peace, adopted an attitude of strict neutrality. It bore patiently all the inconvenience and loss entailed to its property (the Chinese-Eastern Railway) as a result of the military operations in Manchuria. The Japanese Government on its side, when it seized Manchuria, gave assurances to the U.S.S.R. that the property and interests of the latter in Manchuria would be respected.

These promises, the Soviet authorities maintain, have never been carried out. Debts amounting to over 80,000,000 yen for the carrying of Japanese troops on the Chinese-Eastern Railway have not been paid, and in spite of reiterated Japanese promises no efficient protection has been given against bandit attacks on the railway.

The Soviet authorities compute that there have been 3,000 cases of attack on trains of the Chinese-Eastern Railway, including murder of employees, the tearing up of the permanent way, &c., between 1930 and July, 1933, nearly half of these attacks being carried out by the guards entrusted with the protection of the line and traffic. The bandit attacks have increased progressively year by year. About 1,000 railwaymen have been carried off by bandits.

The Chinese-Eastern Railway has spent enormous sums on organising the protection of its line and trains, but this has given little result since, so the Soviet manager of the Chinese-Eastern Railway says, the authorities in Manchukuo have encouraged attacks on the railway, particularly its Eastern section. This has also been reported by the Mukden correspondent of The Times (July 25, 1933) :—

What is the object of these repeated attacks on the rights and interests of the U.S.S.R.? There would seem to be a double purpose in them.

In the first place, the Japanese have their eyes on the rich maritime provinces of the U.S.S.R. which it would gladly seize—this, one might perhaps term the more long-distance object.

Secondly, the Japanese, through the Manchukuo authorities, are endeavouring to make the Chinese-Eastern Railway unworkable in order to induce the Soviet authorities to sell it for a song, or to constitute an excuse for seizing the railway.

It will be recalled that in order to remove the constant source of conflict which the dual management of the Chinese-Eastern Railway involved, the Soviet Government having no imperialist ambitions in Manchuria, had more than once offered to sell the railway to China.

This year, the Soviet Government again offered to sell the railway, and Japan acting officially as intermediary, negotiations for the sale opened in Tokio, June 26, 1933.

We have dealt with these negotiations in BULLETIN No. 50 (August 8, 1933). Here we need only point out that not only did Manchukuo (i.e., Japan) offer a ridiculously low sum—about one-fifth of what the Soviets asked, but they tried to drag all sorts of extraneous questions into the discussion.

To get a move on the Soviet authorities, early in August, reduced their price for the railway from 250,000,000 gold roubles to 200,000,000 gold roubles (£20,000,000). Manchukuo, however, adhered to its offer of 50,000,000 yen (£5,000,000 at par) contending that this corresponds to 200,000,000 gold roubles if the exchange rate of the yen is taken at twenty-five to one gold rouble.

The Soviet authorities naturally could not accept this offer although they were willing to discuss the question of the rate of exchange between the gold rouble and the yen. Later it was reported that Manchukuo was willing to offer 70,000,000 yen, although it is not clear whether this offer was actually made or not.

Within the last few weeks the position has become definitely more serious. According to the Soviet Press, the Japanese through Manchukuo are preparing to seize the Chinese in Moscow-Eastern Railway, and on September 21, 1933, M. Sokolnikov, Assistant Commissar for Foreign Affairs, on behalf of the Soviet Government, handed the following Note to M. Ota, the Japanese Ambassador in Moscow:

"According to reliable information received by the Soviet Government, the Manchukuo authorities, under the direction of the Japanese Government, intend in the very near future to carry out a number of changes in the administration of the Chinese-Eastern Railway which would completely violate the existing regulations.

"The Soviet Government considers that direct responsibility for these violations falls upon the Japanese Government, not Manchukuo, which is powerless and incapable of being responsible for events in Manchuria. The Japanese Government, which is the actual master of Manchuria, must bear the direct responsibility for all violations of treaties in connection with the Chinese-Eastern Railway, as well as the intended seizure of the Railway.

A similar Note was handed by the Soviet Ambassador in Tokio to the Japanese Government.

On September 24, 1988, the Izvestia pointed out that according to reliable information the realisation of the plan for the seizure of the Chinese-Eastern Railway was to commence with the arrest of responsible Soviet employees of the railway and the appointment of the Manchurian assistant manager as manager of the Chinese-Eastern Railway, and that that would mean the violation of existing agreements and treaties and the forcible seizure of the Chinese-Eastern Railway by the Japanese-Manchurian authorities.

On September 26, 1933, we read in the British Press that :—-

"A group of important Soviet employees of the Chinese-Eastern Railway have been arrested by the Japanese and Manchurian police at Harbin, according to the Moscow Press to-day. The arrested men include the director of the financial department, the director of operations, the senior dispatcher, and the director of the main repair shops at Harbin."

This has been followed by a vigorous protest by the Soviet Consul-General at Harbin to which the Japanese Foreign Ministry is reported to have replied verbally that the action of the Manchukuo authorities was not taken against the men as Soviet citizens but as employees of the C.E.R. who must be held responsible for any illegal action the may commit.

The situation is all the more threatening in that recent events in Japan tend to show that the influence of the Japanese Minister for War, M. Araki, whose imperialist expansionist policy and anti-Soviet sentiments are well known, seems to be stronger than ever.

It is significant that, in the course of an interview on the appointment of M. Hirota as Foreign Minister, M.Araki is reported to have emphasised the fact that M. Hirota was a very old friend of his and that Japanese foreign policy was firmly fixed and would undergo no sharp change by the substitution of M. Uchida by M. Hirota. M. Hirota’s general reactionary leanings are well known. The Tokio correspondent of The Times (September 15, 1933) says that:

On the other hand, M. Hirota had been reported to be a firm supporter of the policy of concluding a Non-Aggression Pact with the U.S.S.R. But in reply to a question on the subject at an interview with the foreign Press, September 16, 1933, M. Hirota said:

"The U.S.S.R. borders not only on Japan but also on Manochukuo. It Is highly important that there should be no complications in the relations of the three parties. I hope there are no such complications. Of course, there are various outstanding questions between the U.S.S.R. and Japan. However, If they are settled in a friendly way then there will be no need for the conclusion of a Pact of Non-Aggression with the U.S.S.R."

This has an ominous sound. Were there no questions in dispute at all and no likelihood of any arising there would naturally be no need for a Pact of Non-Aggression, but it is precisely the existence of such disputes which makes a Pact of Non-Aggression important. The repeated refusal of Japan to conclude such a Pact in itself indicates that Japan contemplates the possibility of aggressive action and is, therefore, unwilling to enter into an agreement, the early violation of which would, of course, be rather inconvenient.

It is to be hoped that the Japanese Government will think long and earnestly before it launches an attack on the U.S.S.R. The latter is not China, nor is it the Tsarist Russia of old. Its Red Army is well equipped and above all the ranks of the Red Army know what they stand for and what they may be called to fight for.

At the same time, in the present temper of Japan the situation is extremely dangerous and there can be no doubt that should Japanese imperialist aims give rise to a military conflict with the U.S.S.R. this would have serious repercussions on the rest of the world.

******

We have received the following summary of an article on Anglo-Soviet trade in the Ekonomicheskaya Zhizn (the organ of the Commissariat for Finance). In view of the negotiations for an Anglo-Soviet Commercial Agreement now proceeding in London, our readers will no doubt be interested to see how the matter is regarded by a Soviet business journal :—

The article points out that in the first half of 1929, the correlation between Soviet exports to Britain and British exports to the U.S.S.R. was 5-1, and on the same basis for the first half of 1932, the ratio was 1.64-1. However, if the sums paid by the U.S.S.R. for chartering British ships is taken into account, then the adverse balance of the total Anglo-Soviet trade turnover of £12,400,000 would not amount to more than £1,000,000.

In spite of this, proceeds the article, British circles hostile to the U.S.S.R., especially in Canada, have carried on a systematic campaign against Anglo-Soviet commercial relations, trying to undermine the sound juridical basis on which they rested. Anti-Soviet circles in Canada procured the consent of members of the British Cabinet for the breaking up of the Trade Agreement, which was actually done.

The article comments on the progress of negotiations for the conclusion of a new treaty, on the embargo and on the resumption of negotiations after the suspension of the embargo.

The article comments on the progress of negotiations for the conclusion of a new treaty, on the embargo and on the resumption of negotiations after the suspension of the embargo.

Both parties, says the article, manifested a tendency to understand mutual interests and it seemed that they would come to terms, but once more a campaign developed against mutual Anglo-Soviet relations. The Canadian Premier was intensively active for at least a partial resumption of the embargo. The absurd campaign against " timber dumping" was resumed.

The British Government evidently decided to give in to the Canadian demands and authorised the carrying out of an investigation concerning the importation of Soviet timber, applying for the first time, in response to Canadian insistence, the procedure provided in Clause 21 of the Ottawa Agreement.

 The U.S.S.R cannot, says the article, enlarge or expand mutual relations with countries which do not create minimum guarantees for Soviet exports. The U.S.S.R. cannot agree that its exports to any country are to be subjected to systematic threats, prohibitions and limitations. If any country desires to adopt this method, it must reckon the consequences that will arise for its economic mutual relations with the U.S.S.R.

Comment on the above article:

 The Anglo-Russian Parliamentary Committee of the Houses of Parliament appears to have a Soviet sympathetic agenda.

Both Maxim Litvinoff and Ambassador Maisky denied that forced labour and prisoners were used in the felling of timber.  And yet Kulaks were being sent in the train load to Siberia to work in the timber trade.