Sept. 35.
According to report, Mr. 7. V. Soong and General luang Fu are to-day to proceed to Peking on a joint examination of the situation suddenly developed. The-episode, which has given rise to the issue of a Jupanese warning and another spectacular Japanese air-demonstration in Poking, may soon be relegated to past history. Its immediate interest really lies in the pointer which it gives to the situation in the North and the policy of the. National Government in that regard. Since the conversations at Kuling on Mr. T. V, Soong's return, it has been apparent that the Government is unanimous on the general principle of working amicably with the Japanese. This does not commend itself to Canton which ostentatiously holds aloof from Nanking except for occasional gestures from General Chen Chi-tang. Nevertheless Canton took good care last week to keep the anti-Japanese demonstrations on September 18 within very modest bounds. And Canton's adference lowing the pill," as Sx.
to the programme for Ching-wei expressively calls it, is not of supreme importance for geographical rea-Sons, The creation of the special council in the North under General "Huang naturally gives Nanking considerable material for disputation. The Government adopted a policy of "tolerance for the greater convenience of General Chen Chi-tang's handling of his volatile fellov:-signatories of circular telegrams. also enables Nanking to look upon the intermittent camp ai in Stechuan with mild solicitude and without an oppressive sense of direct responsibility Tt gives a pleasant air of brotherly cooperation to the joint efforts made to round up the stubborn Reds in Kiangsi, It obviously facilitated the appointments whicl led to the successful conclusion of the Tangku Truce to the great relief of all concerned.
The Finance Minister, on returning +) China, has found the problem of finance more acute than ever, The revenue, even with—perhaps in some degree because of—enhanced rates of duty, shows a tragic falling curve. Disasters in Kiangsi have sent the cost of the bandit-suppression campaigns mounting up again. Those disasters have not been catastrophic. Indeed they might quite fairly be described as the normal accidents in any operations involving the employment of regular troops against guerrilla bands who have the inestimable advantage of close knowledge of exceedingly dificult country, where they can keep a tight grip on the inhabitants by ruthless methods and where, consequent. ly, their intelligence service is likely to be in the ascendant until the regulars have really been able to tighten the corder But, with her depleted exchequer and generally _parlous financial condition, China cannot afford even a normal accident. As Finance Minister, Mr. T. Soong is bound to impress the need for economy on General Chiang Kai-shek. He may even to the extreme of closing his purse strings -with a vicious snap, Yet he can hardly carry hig insistence to the point of crippling the campaign in Kiangsi, for the elimination of that menace to the peaceful inhabitants of the South-East is necessary responsibility. doubt Mr. T. V. Soong is taking full advantage' of the advice obtainable from his National Economic Council. Something in the nature of a general survey of the financial requirements of the country seems to be indicated. Linking it with an apprecia. tion of the internal situa the Government might arrive at clear-cut decision in carrying out a dual plan of retrenchment Jand expenditure in consolidation lof its position. Its difficulties lie to the North and to. the South. Canton will not lift a finger to help the finances which Mr. 'T. 'V. Soong administers, Indeed, the barefaced smuggling Now going on in the South deprives the Government of much legitimate revenue with the clear connivance—not to say sympathy—of Canton. The distribution of th $50 million commodity loan, which some say will bring the Chinese Government funds to the extent of $85 mill n, has been the placed under the direction of a special commission. It is to be applied to non-military objects. Many claimants have made their voices distinctly, if delicately, heard. It will' provide Int. Soong with a great opportunity for showing his own. special qualities of political finesse combined with financial ingenuity, How far it will help to solve the major problems now before the Government remains to be seen.
Mr. Wang Ching-wei's "swallowing the pill" policy must appeal to a Finance Minister who realises that, to get more revenue and ty keep down ex penditure, the country needs to be free of "any embarrassing disputes with its powerful neigh. Sour. In spite, therefore, "of curious, predictions to the contrary, the Government's unity on foreign policy has not been 80 far prejudiced by the return of Mr. 'T. V. Soong. Nor is it probable'that there is any' Teal difference of opinion on the general direction of that policy, The cultivation of the cordiality necessary to the faithful execu tion of the Tangku Truce and to the avoidance of incidents which lately caused. trouble Shanghai and elsewhere, can be readily achieved without any formal gesture. Tokyo is showing a wise disinclination to rush Nanking. It is possible that the two countries will continue to "call it @ peace precise definition jon ships to some convenient future date, Tokyo, persistent. In the Peking sit Lis, 4 nothing tion there is always at hand a suitable arena for' the gentle marshalling of events. That is perhaps where the Government at Nanking is finding its chief difficulty at the moment. General Huang Fu, with his knowledge of local conditions, realises that the freer the hand given to him the more easily can he keep the Sino-Japanese peace in Peking. ar. T. V. Soong, torn by his thorship of the' policy of tolerance to one side and by his lof the need for centralizing financial control. to the other, may quite conceivably be reluc: tant to go to the lengths expected by General Huang Fu. This is where the joint visit of the two ten to Peking may be useful. Mr. Soong will be able to judge for himself the significance of General Huang Fu's contentions. The episode' which—directly prompts the Finance Minister's Journey may also be a medium of enlightenment. The Government's choice is not easy. Tt has to place unreserved confidence in General Huang Fu. It hes either to tighten. the financial control and run the risk (which amounts to a certainty) of the further embroilment of the North or to give General Huang Fu a free hand financially well as politically. In the latter choice there is also the risk that the eyes of Peking may be turnfq more frequently to Changchun than to Nanking. Mr. Soong and his colleagues will probably find that the risk is preferable to the other certainty. Moreover time is on their side if the history of Manchuria and the paycological strength of Peking's own genius and advantages be rightly appreciated.
Text read from the printed page and cleaned; old type leaves the occasional error.