Scholar, Simpleton & Inflation

Scholar, Simpleton & Inflation

Once again the helm of China's panicky Government was steadied last week by her "Scholar War Lord," the Great Marshal Wu Pei-fu.

Four years ago Marshal Wu went into the bleak, howling wilderness of Tibet (TIME, April, 16, 1928). There in a monastery perched on a mountain crag he composed a tome of Buddhist poems, painting each character daintily with his artful brush. This scholarly job done and his Fatherland being still stricken by famine, pestilence and war, sedate Scholar Wu buckled on again the sword of a Marshal, returned from lonely Tibet to overcrowded China and today looms potently upon the scene. Equally to President Chiang Kai-shek of China and to Marshal Wu was addressed last week a most amazing telegram received at Shanghai from Manchuria's famed General Ma (TIME, Nov. 23). For more than 40 days, according to his telegram, General Ma has been double-crossing everyone with a skill and success unrivaled even among heathen Chinese.

Acclaimed as "China's Hero" when his troops offered the only serious resistance to Japanese occupation of Manchuria, General Ma swore to defend Tsitsihar "to the Death." He received thousands of dollars cabled to him by patriotic Chinese from all over the world. Then he fled before the Japanese advance and turned up as War Minister of "Independent Manchuria," the puppet state set up by Japan (TIME, March 21). Last week War Minister Ma did not send his telegram from Changchun, the puppet capital of Independent Manchuria. Instead he traveled to the remote Manchurian frontier city of Taheiho, just across the Amur River from Soviet Russia. There, with a fine disregard of telegraph costs, he wired over 1,000 words to President Chiang and to Marshal Wu--words which amounted to a dignified Chinese horse laugh at Japan. Excerpts:

"It would have been unworthy of me to have died before China's lost lands were recovered. ... By temporarily mingling with the Japanese, letting it appear that I had deserted my fatherland, I laid plans to recover our lost territory from Japan. During more than 40 days of contact with the Japanese I witnessed the events leading to the installation of the Japanese puppet government . . . and learned all their secret plans for the annexation of Manchuria.

"General Honjo [Japanese Commander in Chief in Manchuria] told me that Japan was fully prepared to resist Russia in the north with the full strength of the Japanese army, and to resist America to the east with the full strength of the Japanese navy. All schemes and plans for defense against Japan's two major potential enemies have been worked out and are ready to be made immediately effective in case of necessity. . . .

"I, Ma Chan-shan, am a simple military man, ashamed of my ignorance. ... All kinds of scandal have been heaped on my head. I have been patient with the betrayors of China, but now ... I have crossed the river and burned my boat. I have no alternative except to fight the Japanese to the end. I trust that my fellow countrymen will now understand my true self."

Reds & Expansion. Simple and ignorant though General Ma may be in his own elaborate words. Japanese officials charged last week that he had fleeced Japan out of grants totaling $3,000,000 gold when he rejoined the Chinese cause. That General Ma's telegram was genuine neither the Chinese Government (which published it as damaging to Japan) nor the Japanese Government doubted last week. Both publicly accepted it as authentic. But the Soviet Government after a four-day interval called the telegram false, the work of Japanese agents. This charge Moscow seemed to be making to spike rumors that what General Ma had actually done was to join forces with Russia, accept fat Soviet bribes.

"It is idle to close our eyes," said the Japanese Foreign Office spokesman, "to the fact that Soviet Russia is displeased with what has happened in North Manchuria, which is considered in the Russian sphere of influence. We can understand their disappointment at seeing their domination in North Manchuria fading permanently. We certainly have no intention of attacking Soviet Russia and do not believe they are so rash as to challenge Japan."

In Japanese Army circles there was threatening War talk, based on reports that Russia had massed 70,000 Red Army soldiers near Vladivostok and more along her Manchurian frontier. Therefore more Japanese troops must be rushed into Manchuria--but how was the civilian Cabinet of Premier Ki Inukai to pay the cost? Japanese business has seldom been so bad. Silk, that leading Japanese export, slumped to a new low price last week. There remained only one more practicable move: "controlled inflation."

Such a policy is never trumpeted from housetops. But Japanese knew what to expect when Finance Minister Korekiyo Takahashi issued this terse warning in a communique to the Japanese press: "The note issue will not be contracted below the present amount and may even be expanded."

Informally correspondents were told: "The most serious feature of the situation in Japan at present is the collapse of agricultural values, including that of raw silk, to a price level at which the farmers who make up half Japan's population simply cannot repay the bankers. The Government, conscious that the farmers are laboring under an unbearable load, hopes to lighten this burden by a devalorization of the yen, but how this is to be accomplished has not been decided."

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