THE FAR EASTERN CRISIS



   The grievances of the Mongols at present are that (1) the Chinese
 have failed to pay to the Mongols any of the promised monthly subsidy,
 reported to be $50,000; (2) the Mongols are suffering so from the
 depredations of Chinese bandits that many have found it necessary to
 build defence works around their yurts; (3) the northward move-
 ment of Chinese settlers into Mongol territory reportedly continues;
 and (4) the Chinese treatment of Mongols as inferiors has not been
 remedied.

 The present situation appears to be equivalent to inviting the
 Mongols to throw in their lot with the Japanese who are supposed to
 be actively at work among the Mongols. According to information
 obtained from an American resident of Peiping who recently spent
 several days with "Duke" Larson, a Swedish national who has lived
 many years among the Mongols and who is believed to have their
 confidence, it is the opinion of "Duke" Larson that before many
months
 the Mongols many engage in actual warfare against the Chinese be-
 cause of their dissatisfaction. He believes, however, that the Mongols
 will probably not attempt to enlist Japanese assistance until after they
 begin hostilities as the Mongols feel that they will be in better posi-
 tion to bargain with the Japanese if they initiate hostilities by
 themselves.
 Although it may be thought that the Chinese would not find it
 difficult to subdue the Mongols because of the Chinese superiority in
 aerial armaments, military action on the part of the Chinese would
 have three grave disadvantages; (1) the Chinese would be dealing
 with a spirited people who would probably carry on a kind of guerilla
 warfare difficult of suppression from the air; (2) the Chinese would,
 by such warfare, completely alienate the Mongols and drive them
 definitely over to the Japanese; and (3) Chinese military action would
 invite Japanese interference and invasion on the excuse of defending
 the boundaries of "Manchukuo" from disturbance.
 Respectfully yours,                   NELSON TRUSLER JOHNSON

 761.94/790
   The Ambassador in Japan (Grew) to the Secretary of State

                             [Extract]
No. 979                               ToKyo, September 18, 1934.
                                            [Received October 6.]
  SIR:

  In general a reading of the foregoing editorials, which are quite
representative of the Japanese press, impresses the writer as indicat-



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