Course: Historical Research: Skills & Sources (online) (2013-2014)[SV1-SEM1]

Exam No. B046632

Relations between China and Japan in 1937, an investigation using original sources, focusing on
Shanghai and the International Settlement
The Shanghai International Settlement had its roots in the British settlement established in the city
following the Treaty of Nanking (Nanjing) in 1842. It continued to function until almost a century later,
when it was overrun by Japanese troops engaged in what can be termed the Sino-Japanese War, but
was in effect part of the wider conflict referred to as the Second World War.
1937 is a year of particular interest, because it marked the moment that Japanese forces actively sought
to destroy the Nationalist government of Chiang Kai-Shek and his Kuomindang (KMT) movement. This
came after moves to join forces with the Chinese Communist Party (CCP) as a joint force against Japan.
The year was marked by a build-up of tension between the Chinese and Japanese that would culminate
in the calamitous scenes in the Nationalist capital of Nanjing at the end of the year. Whilst Nanjing was
the political capital of China at this point, the city of Shanghai played a much more significant role in
terms of both international relations and finance. This was due to a great extent to the presence of the
self-governing International Settlement.
We are lucky to have access to a wide range of original sources from the period and it is interesting to
contrast the evidence within those sources with the interpretation of this year in Shanghai in the later
literature. For reasons of brevity, this essay will mainly refer to two specific sources. The first is 'Policing
the Shanghai International Settlement, 1894-1945', a fascinating collection of documents chronicling the
activities of the Shanghai Municipal Police during the later years of the settlement. To gain a different
perspective, Foreign relations of the United States diplomatic papers, 1937, The Far East provide an
insight into what information was being fed back to the US government on the situation in China. To
give a wider view on primary sources that would have been available to the general public at the time, it
is also useful to consider how the events of August 1937 were reported in the British popular press of
the day.
Let us start by considering what the International Settlement consisted of in 1937. A splendidly concise
definition can be found in the work of Hutchings in 2001, he writes From 1899 until it was overrun by
the Japanese in 1941, the International Settlement covered an area of just over 8 square miles (20 sq
kms) that extended foreign control inland from the Bund, along the south bank of the Suzhou Creek and
north and east along the Huangpu River.1 The remainder of the city at the time consisted of the smaller
French concession and the larger Chinese city. Within the two foreign areas Chinese authority had been
totally extinguished, they ran as fully autonomous enclaves2 with their own municipal authorities and
police.

Hutchings, Graham, Modern China, A Companion to a Rising Power, London 2001, p374
Hutchings, Graham, Modern China, A Companion to a Rising Power, London 2001, p374

It was also a haven for gangsters like the Green Gang3, who had been instrumental in the KMT gaining
power and financed their activities through the opium trade.
Tempers were somewhat frayed in Shanghai in the early part of 1937. To give a little context, China was
involved in a tripartite conflict involving the KMT, the Imperial Japanese Army and the CCP. Matters
came to a head in the central city of Xian in December 1936 when the leader of the KMT was effectively
kidnapped by one of his subordinates and forced to countenance an alliance with the CCP4. The
Japanese had been very effective in annexing the northern Chinese region of Manchuria some five years
earlier5 and there was general disquiet that they could successfully sweep through the remainder of the
vast country unless there was combined opposition from the KMT and CCP.
Prior to the Xian incident, relations between the Nationalist government and Japan had been
understandably tense, but there were negotiations taking place in both Nanjing and Shanghai. Even
after Xian, however, there were more discussions - which continued well into 1937 as we will see below.
It was becoming clear to the Japanese, however, that a soft takeover as seen in Manchuria was not
going to be an option.
So, what was actually happening in the International Settlement at the time? For information on this,
we turn to a set of documents from 'Policing the Shanghai International Settlement, 1894-1945' entitled
Objectionable Article In The China Evening News Of 22-4-37. Books and newspapers were of incredible
importance in this era, with some 259 bookstores open in the city in 19356 (Xu, 2001, p47)
A perusal of the police paperwork shows that in early 1937, the Shanghai Municipal Police were actively
concerned with the censorship of local Chinese newspapers. Even more interestingly, it is clear that the
reasons for censorship often little to do with the local situation, more often referring to the behaviour of
the British authorities in India. 7The Press Censorship Bureau cracks down particularly hard on articles
in what they refer to as mosquito dailies. These are excellently summarised byXu, who says The
earliest mosquito papers that appeared around the turn of the century were born of intellectuals
frustration with the political situation and characterized by political satire though the tendency towards
escapist entertainment and sensationalism turned out to be the most salient feature of the later
varieties of mosquito papers8. These publications were important because they were distributed as
often
as
three
times
a
day.

3
4

Martin, Brian G, The Shanghai Green Gang, Politics and Organized Crime 1919 1937, California 1996, p56
Taylor, Jay, The Generalissimo, Chiang Kai-Shek and the Struggle for Modern China, London 2007, p147
Hutchings, Graham, Modern China, A Companion to a Rising Power, London 2001, p292

Xu, Xiaoqun, Chinese Professionals and the Republican State: The Rise of Professional Associations in Shanghai, 1912-1937, Cambridge 2001,
p47
7
Objectionable Article In The China Evening News Of 22-4-37. N.d. Shanghai Municipal Police Files, 1894-1945. U.S. National Archives. Archives
Unbound. Web. 1 Dec.
2013. <http://go.galegroup.com/gdsc/i.do?&id=GALE%7CSC5100486092&v=2.1&u=ed_itw&it=r&p=GDSC&sw=w&viewtype=Manuscript>.
Gale Document Number: SC5000486095
8

Xu, Xiaoqun, Chinese Professionals and the Republican State: The Rise of Professional Associations in Shanghai, 1912-1937, Cambridge 2001,
p46

This is significant not simply because censorship was being applied to newspapers, but because it clearly
shows the extent to which this international settlement was dominated by British influence. Over the
course of some seventy or so documents the offending articles are meticulously transcribed into English
and reports of threats to newspapers and editors being summoned to the Police Headquarters are
recorded. It is clear that the authorities, particularly the Shanghai Municipal Council, were not popular
amongst many of their Chinese subjects. The issue of taxation is raised and complaints about this in the
newspapers are not seen as justified. This is state control on a micromanaged level, something that is
possible when your settlement of some eight square miles is effectively a microstate.
Turning to the diplomatic records of the United States government9, it is worth pausing for a moment to
consider the US position at the time. US foreign policy in 1937 was very different to that which would
emerge just four years later with the Japanese attack on Pearl Harbor. There was an awareness of the
growing power of Japan as evidenced by annexation of the island of Taiwan, the Korean peninsula and
Manchuria10 over the course of the previous four decades11. There was also an acceptance of the weak
position of their preferred ally in China, the Nationalist government of the KMT, yet no desire for
intervention in the region militarily.
What we find from the diplomatic records is, however, very interesting. These are vast resources, the
document relating to the just the first six months of 1937 for Asia alone runs to almost a thousand
pages. What we are provided with is the communications between Washington and her representatives
in the Chinese capital of Nanjing, the strategically important cities of Shanghai and Peiping (the name
used for Beijing during this era) and the Japanese capital Tokyo. It is important to remember some key
factors when assessing diplomatic records for historical purposes; this is who they were written for and
why. Although they are of course a primary source, they are from being independent and unbiased.
Given what would have occurred by the end of the year, it is fascinating to read a memo from the
Ambassador in Japan (Grew) to the Secretary of State received on 19th February 1937. It reads
The outlook for 1937, so far as Japanese-American relations are concerned, therefore, would not at
present appear to justify pessimism.
Far from being concerned with Japanese ambitions for China, anyone reading these diplomatic records
would have formed the opinion that the Japanese expansionism was purely about trade and acquisition
of raw materials. Open warfare would seem far from their minds.
This, of course, is what the US government of the time wanted to hear, so to a certain extent that would
be what diplomats on the ground reported back to them. Turning more specifically to Shanghai, the
records do show glimpses of problems there.
9

http://digicoll.library.wisc.edu/cgi-bin/FRUS/FRUS-idx?type=header&id=FRUS.FRUS1937v03

10
11

Throughout the diplomatic records Manchukuo is rendered thus to indicate that US does not recognize it as an independent state

Japan argued that it needed to expand to obtain resources for a rapidly growing population rather than for the purposes of gaining an
empire

A day after the above memo was sent from Tokyo, 20th February 1937, the following correspondence
was sent from the Consul General at Shanghai (Gauss) to the Secretary of State:
About 1000 Chinese mill workers rioted at Japanese Toyoda cotton mill outside western district of
International Settlement this morning but were checked by police. Subsequently 300 blue jackets from
Japanese landing force occupied mill property and remain there at present. Shanghai municipal police
report that order has been restored . . .
These were far from normal times if the Japanese had naval vessels moored close enough to the city to
dispatch a rapid response force to deal with issues in a Japanese-owned factory. Even more
remarkable is that the Shanghai Municipal Police, so punctiliously pursuing newspapers for spreading
sedition about British India as we saw earlier, were simply reporting the event as having taken place.
This shows that their power even just outside the International Settlement was very limited.
A final example of this strange diplomatic activity with regard to the Japanese and China can be seen in a
memo from the Counselor of Embassy in China (at Nanjing) to the Secretary of State on the 16th March
193712 which advises;
A Japanese Economic Mission arrived in Shanghai from Japan March 14 and in Nanking March 15 its
purpose as reportedly stated in January by Japanese Minister of Finance to (1) return the call in October
1935 of a Chinese Economic Mission to Japan, (2) impress on Chinese official and private circles
Japanese side of the argument for joint development of Chinas economic sources
Again, as in the earlier correspondence, this would be reassuring news for Washington, Japan had purely
economic designs on China.
It is worth moving on from the relatively calm atmosphere of March 1937 in Shanghai to events that
would take place less than six months later. By the summer, several incidents had taken place between
the Nationalist forces and Japanese troops in the north of China13. The slow emergence of the details of
the events at Xian in late 1936 where Chiang had capitulated to cooperation with the CCP left Japan in
no doubt that negotiated occupation of further Chinese territory was not now an option. How serious
Chiang was about working with the CCP is debated, but it is clear that not only was the idea strongly
promoted, he also remitted significant sums of money to the CCP14.
The military advisors to the KMT at this time were predominantly German, led by General von
Falkenhausen15, with some freelance American assistance. The consensus amongst Chiang and these
advisors was that Chinas size was its greatest advantage and that even if the Japanese had early
victories, as they got sucked into the vast exterior their supply lines would be exposed and their position
would weaken. This would, in a way, be what would happen over the eight years that followed.
12

This was some three months after the incident in Xian which had been widely reported, yet the Japanese (on the surface at least) were still
giving the impression that their designs on China were purely economic.
13
Fenby, Jonathan, The Penguin History of Modern China, London 2008, p274
14
15

Taylor, Jay, The Generalissimo, Chiang Kai-Shek and the Struggle for Modern China, London 2007, p142/3
Fenby, Jonathan, The Penguin History of Modern China, London 2008, p265

Swift and horrific victories at Shanghai and Nanjing saw the Nationalists pushed back to Wuhan
(militarily) and Chongqing (administratively), but despite superior technology Japan never managed to
take control of the whole country.
Returning to Shanghai, an incident on August 14th when Chinese air force planes attempting to attack
the Japanese naval contingent accidentally bombed the International Settlement killing around 3000
people16 was the catalyst to a declaration of war. Staggering numbers of soldiers were involved on
both sides and the true number of casualties is as disputed as those at Nanjing later in the year.
The conflict continued until mid-November, when Chiang gave the order to retreat. Within this strange
world of politics, diplomacy and international relations, the International Settlement was a curious
anomaly. Whilst battle raged around it, the Japanese did not attempt to overrun the settlement which
acted as a haven for foreigners and the few Chinese able to remain inside. In fact, one of the reasons
that there is such a relatively large amount of photographic evidence of the atrocities that would take
place at Nanjing the following month is because Japanese soldiers took film from their cameras to
photographic shops in the settlement to be developed17.
The International Settlement staggered on for another four years but could not survive the attack on
Pearl Harbor and war between Japan and the US. With the exception of Hong Kong and Macau, the
settlements that had been centres of foreign influence in China since 1842 were subsumed into the
newly declared Peoples Republic of China. The story comes to a more complete conclusion with the
handover of the two exceptions in 1997 and 1999 respectively to the Control of Beijing.
What were people in the west being told at the time? Actually, in contrast the micromanagement of the
Chinese press in the International Settlement, they got to see quite a lot. Research brings up some
archive pages from the British regional publication The Yorkshire Post in 1937. The pages full of images
are particularly incongruous, with a fine example being this18 page from the 16th August19, which leads
with Shanghai: Scenes in the Chinese Storm Centre, before trailing off into Conservative fete at
Alnwick Castle and First tunny landed at Scarborough.
Turning to a piece in The Manchester Guardian on August 23rd20, we find an intriguing account of what
they see as a stalemate:
The Chinese are stronger in numbers and soon should be stronger still. The Japanese having the better
equipment, have also the training to use it . . .
This balanced report seems to favour neither side and shies away from predicting the outcome of the
conflict which they describe as having been going on for ten days.
16

17
18

Fenby, Jonathan, The Penguin History of Modern China, London 2008, p277
Pakula, Hannah, The Last Empress, Madame Chiang Kai-Shek and the Birth of Modern China, New York 2009, p294

http://www.ukpressonline.co.uk.ezproxy.is.ed.ac.uk/ukpressonline/getDocument/YPst_1937_08_16_011?fileType=PDF&#search="1937
shanghai"
19
Just two days after the incident took place
20
http://search.proquest.com.ezproxy.is.ed.ac.uk/docview/484253263?accountid=10673

The piece ends with an item of conjecture suggesting that the Japanese are intent on preventing any
other regional power such as China or Russia obtaining sufficient air power to challenge their naval
superiority. It would of course be the massive air and naval power of the USA that would draw these
events to a conclusion some eight years later.
This essay has told us quite a lot of what we need to know about historical sources. It is not enough to
rely on the obvious. Government records such as the Foreign relations of the United States diplomatic
papers, 1937, The Far East are valuable, but only when one considers the purposes for which they were
written. The papers in 'Policing the Shanghai International Settlement, 1894-1945' were probably
intended to show the probity of governance of the settlement, but instead illustrate the day-to-day
banality of tactics such as press censorship. Perusal of British newspapers of the time suggests that in
the popular/regional press foreign news was something of a curio, to be digested alongside more local
affairs. The more serious press would ponder on the meanings of events on a more global level.
The enthralling part of a historians quest to explain the past is to marry together these disparate
sources into a coherent narrative. The first stage of that process is to truly understand why sources are
important and what they tell us about the past.

Bibliography
Fenby, Jonathan, The Penguin History of Modern China, London 2008
Fenby, Jonathan, Chiang Kai-Shek, Chinas Generalissimo & the Nation He Lost, New York 2004
Hutchings, Graham, Modern China, A Companion to a Rising Power, London 2001
Martin, Brian G, The Shanghai Green Gang, Politics & Organized Crime 1919 1937, California
1996
Pakula, Hannah, The Last Empress, Madame Chiang Kai-Shek and the Birth of Modern China,
New York 2009
Taylor, Jay, The Generalissimo, Chiang Kai-Shek & the Struggle for Modern China, London 2007
Tyson Li, Laura, Madam Chiang Kai-Shek, Chinas Eternal First Lady, New York 2006
Xu, Xiaoqun, Chinese Professionals and the Republican State: The Rise of Professional
Associations in Shanghai, 1912-1937, Cambridge 2001
References
United States Department of State, Foreign relations of the United States diplomatic papers,
1937. The Far East, Volume III, U.S. Government Printing Office, 1937
Database - ProQuest Historical Newspapers: The Guardian (1821-2003) and The Observer (17912003)
Database UKPress Online
Database - Policing the Shanghai International Settlement, 1894-1945