31. While at Chengtu I made an inspection of the military academy and the training school for air force ground staff engineers, both run by the Central Government. I was immensely impressed by the efficiency of both these institu- tions, the former of which has 8,000 students. The thorough organisation and training of the central armies is undoubtedly acting as a strong unifying force in China and provides an increasingly solid backing for the authority of the Central Government both in the provinces and as against the Communists or anyone else who has a private army of their own. By the time the war is over, if the Central Government is still in power, it should be in an impregnable position to exert its influence wherever it wishes.
32. The troops that one sees on the road, and one sees very many, are sufficiently clad in warm uniforms and most of them seem to have full equipment. Military supplies of all light arms and ammunition are adequate at the moment and for some time to come, and there is at present a sufficiency of transport for the vital needs of the army. From the purely military point of view, the Japanese seem to have penetrated China about as far as they can in view of the difficulty of maintaining their lines of communication.
33. One of the most powerful factors that is operating to keep the Japanese army and navy in Chinese territory is the plunder, loot and squeeze which the officers of both services are getting out of China. This tends to make them all, high command and junior officers, unwilling to forfeit their economic prosperity by leaving China. They have practically stripped the occupied part of China of valuables of every kind, including such things as furniture, and no one can get permits or passes for persons or goods without paying squeeze to some Japanese authority. In certain cases, like the tea trade, this has been regularised"; and a certain percentage of the value of the goods is being paid over to the naval officers. In other cases the principle is to charge the maximum the traffic will bear. If attempts are made to get goods through without paying due squeeze, the goods are stopped or, in the case of traffic by junks, the junks may be sunk by the navy. The whole business is just one mass of corruption, and is in accord with the abominable behaviour of the Japanese soldiers towards civilians and especially the young girls and women, none of whom are safe from rape in the occupied areas. At least one missionary has been killed by the Japanese while attempting to protect young girls from being raped. The fact that the allowance out of China of export goods may help the Chinese Government apparently has no bearing on the attitude of the Japanese officers. It is reported that they have put aside very large sums of money derived from these and other sources in the banks of the International Settlement of Shanghai, as they are afraid to transmit them to Japan lest they might be seized by the Japanese Government. Indeed, it is commonly said that the Japanese naval and military authorities will not violate the International Settlement as they desire to retain it as a safe neutral depository of their ill-gotten gains. This behaviour not only antagonises the Chinese people who are subjected to these exactions and brutalities, but it has a very direct reaction upon the effective- ness of the Japanese military occupation. Perhaps the most undesirable factor of all, from the long-term point of view, is the manner in which the Japanese military are dealing with the drug and opium traffic. I have no first-hand knowledge of this, but the almost universal complaints which one hears in China, Hong Kong, Shanghai and Japan itself make it certain that the stories emanating from the occupied areas are largely correct. I append a reliable report(2) from a very highly respected missionary in Nanking, which, I believe, describes accurately a state of affairs which is common throughout most of the occupied areas, particularly in the north and the Yangtze Valley, and is most remunerative to the Japanese. The effect upon the morale of the population is not only extremely serious at the present time, but will grow worse as the drug-taking habit increases. Fortunately, a great many of the younger Chinese are either with the army or have become refugees to the parts of China still under control of the Central Govern- ment. These are at least protected from the worst dangers of the drug and opium traffic, and it is to be hoped that they will emerge as the new leaders of China after the war. How great this exodus has been from the occupied areas may be judged from such an example as Amoy, where. I was informed by the American Consul, the population had gone down from 170,000 to 15,000. The Japanese forces are not only morally degenerate in their behaviour, but are tending to (2) Not printed.
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