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1938, Summer - Small Successes
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[size=-2]The aging(!) Shirley Temple still remains the top box-office draw of 1938[/size]
10 July: I had a meeting with Ma Hongkui today, although he kept me waiting a little. But when the `king` as it were needs you to wait, you wait. His previous meeting with a gathering of bankers apparently ran long so I spent some time talking to his wife, who is his fourth as it turns out. Even now she still wears the black armband to honor those killed in the early attack by the Tibetans (who continue to be a looming presence uncomfortably close to the city, but no fighting has taken place since that fateful battle).
The Ma Clique is finding itself in a good position financially after Chiang’s capitulation. There are four major banks in China: the Bank of China, founded by the Qing in 1905 and based in Peking, the Bank of Communications founded by the Qing in 1908 and based in Shanghai, the Central Bank of China founded by Sun Yat-sen in Canton in 1924, and the Farmer’s Bank of China, started in 1933 in Hankow (a British concession). Chiang relocated the Farmer’s Bank to Chungking as soon as the Japanese attacked him last year, so it fell completely into the Mas’ hands when they took control of that city. The Bank of China and the Bank of Communications had branch offices established in Hong Kong in the early part of the decade, and when the Japanese attacked, the Bank of China rapidly created even more new branches all across Southeast Asia in diverse places such as Batavia, Kuala Lumpur, Rangoon, and Hanoi, among others. With these branch offices in place, officials were able to move a lot of China’s money offshore before Shanghai fell into Japanese hands. Hongkui is having a meeting with these men today to enlist their support in getting some of this money back to Ningxia province and Golmud. If he succeeds, most of China’s prewar money will be in his possession, which would include that from the Central Bank of China if he reincorporates Kwangtung.
After those negotiations concluded he invited me over to share some ice cream (vanilla, which I detest- but you don’t complain to the king!) and have a general discussion. He had a copy there of the issue of LIFE that printed my article and was fairly pleased with it. I was informed that he is happy to continue to grant me access to the higher levels of the government so an unbiased account of events here can be reported in the West.
[size=-2]Ma Hongkui’s wife serves up ice cream to start our meeting[/size]
I felt emboldened to ask a few questions that were uppermost in my mind. Currently in the West the little that is known about Ma Hongkui is that he is virulently anti-Communist and fanatically loyal to Chiang Kai-shek. Given these circumstances it would appear that his actions so far are entirely contrary to his character. When I raised this issue, it gave him some pause for thought but he was happy to offer me some clarifications.
`Yes, Kai-shek and I were close, closer than brothers perhaps. But it is true that the only ones who can really hurt you are the ones you care about the most. I supported him to the best of my ability throughout the difficult times in the last decade, but he had too many faults for me to turn a blind eye to. Your friend Henry has done much to get American money to support the KMT and the Republic, but where has that money gone? On my last trip to Nanking I noticed that nothing has changed there in years. I started to become worried. ` He took a moment for additional reflection and then went on.
`Problems became obvious for me when we made a motorcar trip from Nanking to Chungking to review the garrisons there. Not once did he even look out the windows of the car to see the life of the peasants right outside. When we reached the city, I saw that there were still no telephones in the government offices, even though I knew money had been earmarked for this purpose. The people are also still hauling water up from the river to drink, even though I knew again that money had been allocated to provide piped drinking water. `
`Yes, I saw. `
`The final straw was when I asked him about the project to improve the infrastructure links with my own Ningxia province to the capital. Without a moment’s hesitation, he said everything was arranged, but when I returned back to Golmud, I found out this was a lie. I would hope it is also known in the West that I have no tolerance for corruption. They may write about how I betrayed Chiang Kai-shek, but he was betraying us all with his graft. I loved him dearly but I loved China more. `
`And the Communists? `
`That is a fair question. The easiest way to understand it is to think of the Communists as coming in two types. The first type are ideological simpletons who genuinely care about trying to create a fair society for all. The second type is far more dangerous. These kind will give lip service to the idea of equality for all but really are just looking out for themselves. They rail against the abuses of the upper classes but will put themselves in their place at the first opportunity. You can see this already in Russia. Only a fool would claim that Stalin is on an equal footing with the lowliest Ukrainian kulak- and we know already he had no qualms about starving them in ’32 when he sold off all their food to buy industrial equipment.
The more radical Communists are also placing themselves at war with Capitalism, but Capitalism is a requirement for effective industrialization. The profit motive of Capitalists will obligate them to industrialize in the most efficient way possible, but when industry is instead forced to look to the `greatest good for all`, it is shackled and stagnates. Likewise, the worker in the factory will work hard if he thinks he will get ahead by doing so, but he will not work as hard to support his brother. This is just an unfortunate fact of life- people are selfish, and we have thousands of years of written history to prove it. No group will put another ahead of its own interests. Communism as an ideology is doomed to ultimate failure. It will only work in small agrarian settings where people know each other well enough to want to be more self-sacrificing and there is no complex economy that relies on competition to thrive. Lenin may have joked that Capitalists would sell him the rope he would use to hang them, but the underlying truth is, he would *have* to buy it- Communists could never produce the rope themselves!
So it is true that I have been having the Communists who would be a real danger to our way of life here executed. But with the round-up of Mao Tse-tung and his ilk back in ’36, the dangerous Communists have all been purged from China. All those that are left are the idealistic ones who won’t look beyond the confines of their own villages and won’t be making trouble in our factories. They will form a good safety valve, as anyone not happy with the progress we are making here can simply move to Yan`an. And if any of those sheep decide to become wolves, the example of Mao is one I am happy to repeat without limit. Of course, Stalin remains a threat to both Europe and Asia. The Communists in Russia are full of talk of world-wide revolution, so we will have to watch that situation closely and always be prepared to protect China. `
We concluded our interview with more mundane topics, but he ended things with a question of his own that I was unprepared to answer:
`So, when will you marry Sheng Jie? `
You can’t argue with the king.
29 July: Japan seems to be at war with the Soviet Union, even though there has been no official declaration of hostilities. There have been long-standing disagreements regarding the common border of Manchuria, Russia, and Korea that go back to Imperial Russia and the Qing dynasty. New reports from the wireless say that Soviet forces have occupied the hills near Lake Khasan, an area that overlooks the Korean port of Najin. Since Korea is effectively a Japanese colony, this kind of a move threatens their strategic interests. I can imagine the Japanese still feel emboldened by their victory over the Russians in the 1905 war, but the new Red Army isn’t the Tsar’s army. Their new opponent is one born from an extreme trial by fire. It may be weakened by the great Purge that Stalin did of the officer corps at the start of ’37, but I am sure it is still a force to be reckoned with.
[size=-2]Soviet troops rally to defend Lake Khasan[/size]
13 August: Heard a great horse race over the wireless. It was a match race with Seabiscuit vs. Ligaroti, who is a South American import from Argentina. The event was billed as a `Father vs. Son` matchup, since Seabiscuit is owned by Charlie Howard, and Ligaroti is owned by the American actor Bing Crosby and Howard’s son Lin. The matchup was a close race, and was head-to-head for most of the end (fairly unusual in such races), but Seabiscuit won by a nose as they say. The announcer indicated that the two jockeys seemed to be fighting each other as their horses neared the finish, but there were no disqualifications and the race was official
[size=-2][1][/size]. I ended up winning some bread from the guys at The Americaine as I was the only one who bet on `The Biscuit` as he is sometimes called. `38 has been a rough year for him and many feel he has been underperforming, but I was ready to take a chance. Of course, as the champion of the West Coast racing circuit, many of us are hoping that he will be matched up against War Admiral, the champion of the East Coast races, but who knows if that will ever happen.
15 August: Japan and the Soviet Union have just concluded their little two-week war. The Japanese army did have a bit of early success clearing the Reds out from the hills near Lake Khasan with a bold surprise attack at night (surprise attack seems to be their chief strategy), but the Red Army regrouped and dealt the Japanese a resounding defeat. Oddly enough I received word from Henry that the Japanese ambassador in Washington asked for assistance from the Americans in negotiating an armistice, so maybe people on the Japanese staff still have fond memories of when Theodore Roosevelt went to bat for them after their last tussle with Russia. Still, this surprises me since the Japanese seem to be determined to burn through any good will they may have with the Western powers by their continued hostility in China.
20 August: All the regulars (including myself, truth be told) had a good laugh at Konrad’s expense today down at The Americaine. Most of us happened to be there when he was opening up a new shipment of films that he was ready to show (
Snow White, which I finally saw, is getting past its prime, for me anyway). He told us these were supposed to be newsreels, but when he opened the package, we discovered to his great dismay that instead it was filled with all the latest Shirley Temple movies:
Wee Willie Winkie,
Heidi,
Rebecca of Sunnybrook Farm, and
Little Miss Broadway. Konrad’s face got really red and we couldn’t stop ourselves from laughing even though he swore up and down they were supposed to be newsreels. I don’t think this experience will really hurt his bottom line, though, as plenty of people came by to watch the Disney film, so I suspect he can still turn a profit on these. I could tell Jie was already excited at the prospect of watching them with me.
7 September: Ma Hongkui invited me over to the government headquarters to be there to take notes for him during a new military adventure. He’s decided the time is ripe to break the treaty that he had arranged with Li Zongren. Ma Buqing is personally taking charge of the situation in Kwangtung. Since last June, fresh Infantry divisions have been taking up position near Guilin. Ma Hongbin’s spies report that Hongkui’s predictions are coming true- there is great indecisiveness in the KMT leadership in Kwangtung, indecisiveness that is being fostered by generals there who have been receiving large payouts from Golmud (the Mas have been putting the money from China’s banks to lively use). So there is a split there between a faction that wants to deal with the Japanese and those that want to take the Mas as the more serious threat. Currently the `Japan First` faction there has transferred the bulk of Kwangtung’s infantry reserves over to the Japanese border and to form a strategic reserve around Canton. The province’s provisional capital of Guilin is reported to be guarded with untried Militia brigades. Buqing’s orders are to lay a siege to the city while the same Cavalry forces that I joined in the race to Chungking are sent to race to the coast. I stayed with the general staff there for some time as they poured over their maps, and the initial results seemed quite good. Buqing was only tasked with making enough of a threat that the Cantonese reserves would be drawn up to Guilin, but the Militia there are proving so weak that the city may fall, even without any heavy artillery support.
[size=-2]Hostilities in Kwangtung resume with an attack on Guilin[/size]
14 September: Word has come in that Guilin has fallen and the Cavalry has reached the coast. It looks like this time the Mas can finally get access to the sea! The people here are pretty jubilant and the KMT troops in Kwangtung seem to be in full retreat, so Ma Buqing has orders to seize as much territory as he can grab. Li Zongren may be offered another truce at this stage, which he may have no choice to accept. The generals there in the Mas’ pockets can pressure him to do so, and he has little choice, as the alternative will be a long, drawn-out affair he would be unlikely to win unless he sells out to Japan. There is no way Li Zongren can get enough forces over to this area now without practically handing the Japanese an invitation to march in.
[size=-2]Ma Clique troops finally reach the sea[/size]
28 September: The last few days have been so busy I hardly know where to begin. Firstly, we had a huge celebration over the opening of the new Coca-Cola factory that was just finished in the city. I know Ma Hongkui might have been happier if the plant was one for producing military equipment or the like, but he mentioned to me in passing that he’s satisfied enough that building this factory has given his engineers and construction crews enough practical experience that it will be easier to start making more such industrial complexes in the future.
Looking through my notes I see that I mentioned that last year in June we set up a meeting with a Coca-Cola representative to get development of some kind for their product out here. The fellow they sent from Germany, Max Keith, was convinced they should do business with us. Keith is apparently unhappy with what has been unfolding in his native land and made arrangements for himself to be the one to come down with his family and start work on a plant. It wasn’t too much of a stretch for Coca-Cola to be convinced to do business out here since they were already established in China.
Originally they cut a deal in ’27 with the Watson Mineral Water Company, a British bottling plant operating in places like Shanghai and Hong Kong
[size=-2][2][/size]. This company was founded in 1903 and did quite well providing clean water to Chinese cities, clean water of course being an important facet of industrialization (and still lacking in Chungking, as I saw firsthand). Coca-Cola saved themselves some trouble by having Watson Water handling the bottling and delivery of their cola beverage under their direction. They did this from their facility in Shanghai, and staff from there was working with Max on setting up a new plant over here. When Japan officially declared war on China, it was decided to try and transfer as much of the equipment as possible over to Golmud. This was done fairly successfully and the last several months have been a flurry of activity working to get this gear incorporated with the new construction here in in the city already.
[size=-2]Coca-Cola delivery trucks in Shanghai, before their move[/size]
This new plant is a boon to the local community, since a lot of factory workers have been out of work due to the shortage of things like iron ore. Water and flavored syrup is a lot easier to come by around here, so plenty of people are back to work. I was also able to arrange an incredible surprise for my little Jie. Last month I took a nice photo of her that I said was going to send back to my parents in New York, but I actually sent it to the local artist that Max had contracted to do some advertising. That fellow used the photo to do a wonderful painting that forms the basis of a print ad on posters all over town. Now everybody can see how wonderful she is!
[size=-2]Sheng Jie is immortalized for the ages[/size]
The bottling plant is now churning out Coca-Cola full swing, so Konrad has a local source to keep his taps full, even if it isn’t always filled with booze. We had a huge party at the public house to celebrate with several cases of bottles from the first production run. During the party I ended up doing something that Peter found quite hilarious. I was passing a bottle to Jie and I told her `Have a Coke! ` Her face lit up and I said on a whim `Have a Coke,
and a smile! `. Peter thought this quite amusing and said it would make a smart jingle, and perhaps I should quit the print business and go into advertising. I laughed just to humor him but I didn’t think it was really that catchy.
So while we were still enjoying the euphoria of the factory opening up, we had some more grim news from Europe. The German Chancellor has been painting himself as some sort of messiah for the German peoples, and his rhetoric has gotten even worse after the Anschluss six months ago. He now claims that the Sudeten Germans in Czechoslovakia are being oppressed and is agitating for action. Originally, these peoples were under the nominal rule of Austrians when the region was part of the Austro-Hungarian Empire, but in the aftermath of the Great War, they found themselves being ruled mostly by Czechs in the newly formed state of Czechoslovakia (the Slovaks are also somewhat unhappy with this arrangement). Just as the rising National Socialist party in Germany helped form a matching organization among the disaffected Germans in Austria, so too has it done with the Sudeten Germans. The leader of the Sudeten German Party, Konrad Henlein, has been agitating for greater autonomy from Prague, something Czech President Edvard Benes can’t really accept since so much of that area is vital to Czechoslovakia’s strategic interests. The perfect recipe, then, for Germany to get involved.
[size=-2]Germany `saves` the Sudeten Germans from oppression by Prague[/size]
So we’ve heard on the wireless that a meeting was concluded at Munich involving Germany, France, the United Kingdom, and Italy. Nobody from the country in question itself appears to have been invited. The net result of this is that the German Reich is being allowed to annex the Sudeten region, which according to Peter will be very crippling to the young Czechoslovak state. Aside from the fact that nobody from Prague was invited, this treaty is also odd since both Britain and France have military alliances with Czechoslovakia. I suppose since the entire country wasn’t annexed like Austria was they perhaps feel like they did in fact honor their agreements. Somehow I doubt that the same sentiments are being felt in Prague. We’ve been listening to Prime Minister Chamberlain’s remarks as regards to the settlement, and he said something along the lines of `We regard the agreement signed last night and the Anglo-German Naval Agreement as symbolic of the desire of our two peoples never to go to war with one another again. ` Noble words nobly spoken, but I saw Max and Konrad exchange a lot of worried looks so I don’t think either is convinced that this actually means peace. But I suppose it does for now, since there was a real potential for war there if Britain and France had decided to use their agreements with Prague to force the German Chancellor to drop his support for the SdP. Perhaps Europe can now rest easy, but I’m not so sure. Anyone who pulls out a map can see there is still at least one other `problem` facing the German peoples, which is the issue of the Polish Corridor. If Poland ever makes trouble for the Germans regarding their access to Koningsberg, you can imagine the Chancellor will step right in with no hesitation. If that comes to pass, I wouldn’t then expect the Poles to feel they will be treated any differently than Czechoslovakia and they should be prepared to get carved up by the diplomat’s knife. But in the meantime these selfsame diplomats can return to their capitals to great acclaim.
[video=youtube;xDeXOms1k6E]http://www.youtube.com/watch?v=xDeXOms1k6E[/video]
30 September: Resistance is starting to stiffen a little in the far south, so I expect that Li Zongren will be offered a new peace deal soon. With so much of his staff actually working for the Mas, it seems to be expected that he will accept. They can easily make the case that with all the assets that were lost when Guilin was taken, time is needed to rebuild and look for external aid. His new headquarters is in Canton, but now that Ma Buqing’s troops have reached the Gulf of Tonkin, Canton can be taken at a later time since the Mas are desperate to start work on their own port facilities. With the money they have at their disposal, financing shouldn’t be a problem and I expect many of the British-controlled companies in Hong Kong will be more than willing to lend a hand.
[size=-2]The second conflict with Li Zongren ends favorably for the Mas[/size]
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[size=-2]Editor’s Notes:
1. Ligaroti’s jockey, Noel Richardson, claims he had to defend himself after Seabiscuit’s jockey, George Woolf, started using his whip on him. Other evidence indicates that Woolf only started using the whip after Richardson began grabbing at Seabiscuit’s saddlecloth. Since this was a match race and not part of the regular circuit, racing officials declined to take any action
2. Watson Water claims to have pioneered the `office sized` bottle in the 1950s which led to the widespread adoption of the standard office water cooler in use today[/size]
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