FOREIGN RELATIONS, 1934, VOLUME III



upon the question of obtaining the money to carry the work out, that
he would have been entirely justified under his terms of reference
(which he quoted to me) in discussing with the Chinese the financial
aspects of the work and the best method of procuring the money to
carry it out.
  In commenting on this to the Department, I may say that in my
opinion the tactics displayed by Rajchman in this matter of consulting
with the League Financial Organization show how he is very cleverly
keeping within his mandate, but is actually associating the technical
endeavors with financial endeavors extending beyond the mere tech-
nical field, despite anything that the Secretary-General may say to
the Japanese or anything the Japanese may say.
  My reaction to this whole matter is that Rajchman's policy and
that of any other agent which the League may appoint to go to China,
and the policy of the League itself, will be to proceed as quietly as
possible and as effectively as possible with the program of technical
assistance which will ostensibly have no relation to political questions,
but which will in effect in the very nature of things be linked with
political questions, since it has as an underlying objective the strength-
ening of the central government of China and of China as a nation.
  At the conclusion of our conversation I asked Dr. Rajchman what
he expected the Japanese to do. He said that no one knew. He
pointed, however, to the blow at Mukden at the time the League's plan
had progressed to a certain point and he also pointed to the Japanese
demands respecting the disappearance of a Japanese Vice Consul,80
which had taken place a short time prior to my conversation with him.
Dr. Rajchman's general idea as to what the Japanese might do is
that they might easily endeavor to create a local incident and attack
the whole matter from such a point of departure.
  In this connection I have read with interest the despatch to the
Department from our Nanking office under date of December 29,
1933 81 in which are set forth the views of Mr. Bryan R. Dyer, an
American who is a member of the Chinese National Economic Council.
If Mr. Dyer's estimate of the situation is correct, I should be inclined
to the opinion that the real danger to the League's plan of assistance
arises not so much from the probability of some single incident in-
stigated by the Japanese, but rather from internal dissension among
the Chinese and even among the foreign experts themselves, the
diversion of public funds by Chiang Kai-Chek for military purposes,
and the careful and systematic placing of Japanese money to the end
of suborning Chinese officials.

  Respectfully yours,                         PRENTISS B. GILBERT

  " The missing officer was found unharmed.
  " Not printed.



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