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Published online by Cambridge University Press: 23 March 2011
When considered in retrospect, one of the most interesting phases of the recent Sino-Japanese conflict was a local condition that arose in North China between the years 1935–37, known to the Japanese as the “special trade” in China.
Following the Mukden incident of September 18, 1931, the Kwangtung Army began its inexorable march to the southward. Within two years Manchuria had been conquered, an independent “Manchukuo” had been proclaimed, and Japanese troops stood at the gates of the Great Wall. The story of Japanese penetration beyond that historic barrier is a fascinating study in diplomacy. For four years, the Island Empire sought by every means short of war to establish its position of paramountcy in North China. Intrigue on a vast scale, involving official proclamations, “spontaneous” autonomy movements, organized smuggling, threats of reprisals, and even direct military action was the order of the day.
1 Shih, Hu, “The issues behind the Far Eastern conflict,” in Analyses of the Sino-Japanese conflict (San Francisco: Chinese Consolidated Benevolent Association, March, 1938), pp. 6 ff.Google Scholar
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3 Kann, E., “China in 1935: an economic review,” Chinese economic journal and bulletin, 18 (April 1936), 496.Google Scholar
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6 Shih shih hsin pao, June 30, 1934. Quoted in Royal Institute of International Affairs, Summaries of leading articles in the Chinese press, 3 (August 14, 1934), 7. Cited hereafter as Press summaries.
7 Utley, Freda, Japan's gamble in China (London: Seeker and Warburg, 1938), p. 33.Google Scholar “Since July, 1932, the Customs Revenue from Manchurian ports which amounted to 11% of the total in 1931 have not been available for the service of secured loans.” Quoted in China and Japan, p. 99.
8 “Business abroad”, Business week (June 15, 1935), 29.
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16 See the statement of Foreign Minister Arita, Domei dispatch, May 15, 1936; also the statement of Tada in North China herald, May 13, 1936. Even Chinese authorities agreed the schedule was too high; see Ta kung pao, May 13, 1936 in Press summaries, 4 (June 30, 1936), 3 ff; also Chinese yearbook, 1935–36, p. 487. and ibid., 1936–37, p. 916. For a study of comparative tariff rates see China weekly review, 77 (July 27, 1936), 142. At the time of the smuggling, duties on the principal smuggled goods stood as follows: artificial silk yarn 210%. white sugar 175%, gasoline 110%, kerosene 95%, cotton piece goods 80%, sea products 20%, cigarette paper 15%. See China weekly review, 80 (March 13, 1937), 53 ff.
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22 This act undoubtedly inspired the unrivaled silver smuggling of 1935. However, the new currency proclaimed throughout China in November, 1934 probably had its effect (Mah, op. cit., p. 14).
23 Largely through the efforts of the Japanese consular police. See Shih, Chao-ying, Smuggling in North China, Information bulletin, vol. 1, no. 1, May 21, 1936 (Nanking: Council of Inter national Affairs, 1936), p. 15.Google Scholar
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25 It should be emphasized that responsibility for the silver smuggling did not rest with the Japanese. The North China herald of December 18, 1935 aptly referred to it as an “international” scandal.
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28 Central news (Shanghai), May 12, 1936. Japan invoked the Tangku Truce to give a spurious legality to the demand. It was, of course, without foundation; see the China yearbook, 1936, p. 140.
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50 Trade of China, 1935, p. 10. See also ibid., p. 11. The Kailan Mining Company was a Sino-British concern operating coal mines near Chinwangtao.
51 Trade of China, 1933, p. 45.
52 Ibid.
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59 Toynbee, , op. cit., 1935, vol. 1, p. 330.Google ScholarBisson, , op. cit., p. 109.Google Scholar
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72 Quoted from the Customs Preventive Service by Shih, op. cit., p. 8.
73 North China herald, May 20, 1936.
74 New York times, May 24,1936.
75 North China herald, May 13,1936.
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77 “The Japanese empire,” Fortune, 14 (September 1936), 116.
78 North China daily news, May 5,1936.
79 China yearbook, 1936, pp. 141 ff. For monthly figures see Shih, , op. cit., p. 6.Google Scholar Sundries include 12,692 cases of kerosene and 999 cases of gasoline.
80 “Smuggling conquest,” Business week (May 30, 1936), 35.
81 China weekly review, 76 (April 4,1936), 162.
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83 North China herald, May 20,1936.
84 North China daily news, May 5,1936.
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86 For a complete list of all goods smuggled into Tientsin between October I, 1936 and December 31, 1936, see China weekly review, 80 (March 13, 1937), 54 ff.
87 North China daily news, May 5, 1936.
88 Ibid..
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91 North China daily news, May 5, 1936.
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93 North China herald, May 19,1936.
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95 Text, Chinese yearbook, 1936–37, p. 429; also Chen, L. T., op. cit., p. 96.Google Scholar
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97 North China herald, May 20, 1936 quotes the texts. See also Hanson, , op. cit., p. 544.Google Scholar
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109 PD:HC, S5:312, p. 1610.
110 Supra, p. 00.
111 See the statement of Captain Euan Wallace, Secretary of the Overseas Trade Department in PD:HC, S5:313, p. 614. Also China weekly review, 80 (March 13, 1937), 53.
112 This “defense”, however, was never a consistent one and lapsed early. By the spring of 1937, the American Chamber of Commerce in Tientsin could report that “Japan's 'special trade' is not directed against American goods. They want to drive down the Chinese customs tariffs… On the whole, American business has been good during the past year” (China weekly review, 80 [March 13, 1937], 53).
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117 PD:HC, S5:312, pp. 5–6, 1172–73, 1608–11, 1986–88, and vol. 313, pp. 32–33, 191–92, 614.
118 Speech of May 25, 1936, see PD:HC, S5:312, p. 1610.
119 Times, May 18, 1936.
120 Reuters dispatch from London, May 13, 1936.
121 North China herald, June 3, 1936. A similarly worded telegram was dispatched to the British Foreign Office hy R. Calder Marshall, chairman of the British Chamber of Commerce in Shanghai.
122 Chinese yearbook, 1936–37, p. 932.
123 Fortune (Sept. 1936), 116.
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127 A Reuters dispatch from London on June indicated as much. However, France and Germany would have no part of it, Germany having just previously signed a trade agreement with Manchukuo. See North China herald, June 10, 1936.
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130 Ibid., p. 162.
131 Quoted in the North China herald, August 5, 1936.
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134 Ibid., p. 553.
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138 China yearbook, 1939, p. 70.
139 Toynbee, , op. cit., 1937, p. 178.Google Scholar For China's answer to the Japanese protest over this incident see also ibid., 1936, p. 913.
140 China yearbook, 1939, p. 609.
141 Trade of China, 1937, p. 10.
142 China yearbook, 1939, p. 70.
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148 Ibid., 1936, p. 50.
149 ibid., p. 51. See also Chen, P. T., op. cit., p. 1Google Scholar, supplement.
150 Trade of China, 1936, p. 51.
151 Ibid., pp. 9 ff. This total loss amounts to approximately Ch. $21,000,000 and does not include miscellaneous items.