Manchukuo

It was not the first time Inspector-General Frederick Maze had confronted a crisis whereby some custom houses would leave his control with the support of local authorities: in 1930 and 1931 the Nationalists’ factionalism had led to the seizure and detention of the Tientsin and Canton custom houses’ revenues.Footnote ⁸ However, Maze clearly believed that the nature of Manchukuo, as a ‘sovereign’ state under the Japanese patronage, was different because ‘Manchuria formally seceded and declared its independence as a separate foreign state, whereas both the Tientsin and the Canton “Governments” claimed to be Chinese-not alien-institutions.’Footnote ⁹

Manchukuo was established on 1 March 1932 and the negotiations for keeping the Manchurian custom houses’ revenues in the hands of the CMCS fell on the shoulders of Chinese Secretary Ding Guitang (丁貴堂, Ting Kwei-tang)Footnote ¹⁰ and Dairen Commissioner Fukumoto Jinzaburo (福本順三郎). Fukumoto, due to his Japanese nationality, was in a position to obtain massive amounts of confidential information which he always fed to the Inspectorate. The first round of negotiations seemed successful. Ding and Fukumoto forwarded a memorandum from the Manchukuo foreign minister in which he stated that the ‘Customs revenue and administration have very important bearing on foreign loans and indemnities formerly contracted by the ROC’. Therefore, ‘in order to avoid changes in trade and with a view to smooth international relations’, Manchukuo would ‘maintain temporarily [the] existing system of Customs administration’.Footnote ¹¹

It was a satisfactory result, but too good to be true. Thus, if this temporary state of affairs could not last forever, Maze, Fukumoto, and Ding all suggested that ‘it would be in China’s interest—both financially and politically—to compromise and accept an understanding whereby the Manchurian Government would pay a share of the [Boxer] Indemnity and the foreign loans’.Footnote ¹² This meant that the Manchurian custom houses would be under the jurisdiction of the Manchukuo Customs, but the pro rata share of China’s Boxer indemnity would still be deposited with the foreign creditors. It was probably the most acceptable way for both sides if Nanjing could not afford a war against the Kwangtung army.

The success of this outcome was attributed to Fukumoto. He earned Maze and Ding’s trust as Ding reminded Maze that ‘information from Fukumoto should not be quoted or published’, ‘otherwise his safety will be at stake, and he will not be able to render any assistance’,Footnote ¹³ and Fukumoto was ‘absolutely loyal and did particularly meritorious service’.Footnote ¹⁴ The internal trust of the CMCS was not enough as Fukumoto also needed the trust of both the Chinese and Japanese governments. However, Nanjing could neither accept this solution nor trust him fully. Fukumoto could not bear the pressure and sent his resignation in a telegram. He told Maze that, ‘a passive attitude is the only one possible for me at the present moment’ and hoped Maze could ‘realise the impossibility of my taking such a responsibility upon myself’.Footnote ¹⁵

This telegram was too short to demonstrate the struggles Fukumoto confronted. But his visit to the British consular-general to Dairen provides more information. Fukumoto assured him that he had ‘done his best as he saw it to effect a settlement of a very difficult question in the safest and sanest way’, which should be ‘acceptable to both Manchukuo and Nanjing’, and his goal was to ‘achieve the paramount object of preventing the disintegration of the Customs Administration’. However, the only compensation that Fukumoto received for his pains was ‘to be discharged’ in the most ‘ignominious manner possible’ because he could not ‘sacrifice his conscience and convictions, but, as a Japanese in Japanese territory, his personal safety and freedom of association with his nationals’. The British consular-general was upset by this and stated that ‘no man with such a long record [27 years], and with such a brief period of duty ahead of him [three years], is likely to sacrifice it all for frivolous reasons’.Footnote ¹⁶ This feeling was also shared by most of the Japanese employees at Dairen, so they sent the resignation telegram to ‘sever all relation with the Chinese Customs Service’.Footnote ¹⁷

Among all the Japanese employees, Yoshida Goro (吉田五郎) was an exception. He received his BA in Law from Tokyo University in 1914Footnote ¹⁸ and joined the CMCS in 1915.Footnote ¹⁹ Maze immediately appointed him Dairen assistant-in-charge after Fukumoto’s resignation but Yoshida’s Japanese nationality meant that he too was faced with Fukumoto’s dilemma. Maze then appointed J. V. Porter instead, as the Manchukuo and Kwantung authorities would hesitate to force a British citizen to act against his perceived duty.Footnote ²⁰ Everyone was given an opportunity to choose between the CMCS and the Manchukuo Customs Service. Yoshida refused to join the Manchukuo Customs Service and returned instead to the Shanghai Inspectorate General of Customs, reporting for duty in 1933.Footnote ²¹ Yoshida also had Maze’s full trust as shown by Maze’s instruction to him to keep the ‘Customs code’ for deciphering their confidential telegrams.Footnote ²²

After the succession of the Manchurian custom houses, another Japanese employee decided to leave the Manchukuo Customs Service and ask to be reinstated at the CMCS, but his reason was different from Yoshida’s. On 29 June 1932, Assistant Examiner Yamaguchi Mansuke (山口萬助) was given the opportunity to choose either the CMCS or the Manchukuo Customs Service, and he chose the latter because of ‘his patriotism and the passion to help my Japanese colleagues’. However, he soon regretted his decision and explained that ‘right now, a lot of Japanese are unemployed, so it would not be a bad idea to have one more Japanese employee in the CMCS, because it can serve Japan for easing its unemployment and for extending its commercial sphere of influence in China’.Footnote ²³

His request for reinstatement was denied by Maze because ‘prior to the seizure of the Lungchingtsun Customs’, Yamaguchi had been ‘suspended for duty for dis-obedience and disloyalty; at the time of the seizure he handed in his resignation together with other Japanese employees in the Customs’. Maze instructed Chief Secretary Kishimoto Hirokichi (岸本廣吉) to investigate this case. Kishimoto was certainly the right person to do so as his position was second only to the inspector-general and he functioned as his right arm. Kishimoto had been appointed chief secretary in 1925 and 1931.Footnote ²⁴

The key to this was that if Yamaguchi had not ‘joined the Manchukuo Customs’, it would appear that he was ‘at least entitled to refund of contributions’. But Maze also emphasized that if Yamaguchi had ‘joined the Manchukuo Customs, even for one day he will have to receive the same treatment as other disloyal employees’. Thus, Maze requested Kishimoto ‘to ascertain whether Mr. Yamaguchi did join the Manchukuo’.Footnote ²⁵ After Kishimoto was certain that Yamaguchi had not joined the Manchukuo Customs, he sent him to the Customs Gold Unit (CGU) 388.42.Footnote ²⁶ The difference between Yoshida and Yamaguchi was that while the former did not choose Manchukuo, the latter did, although both of them immediately wanted to rejoin the CMCS.

By this point, Fukumoto’s solution for keeping the customs revenues sufficient had demonstrably failed. But during and after the negotiations, Fukumoto Yoshida and Yamaguchi had made their choices and they had ended up with three different results: Fukumoto joined the Manchukuo Customs, Yoshida returned to the CMCS, and Yamaguchi became unemployed. In this process, they had all demonstrated a sense of aloofness from Japan and Manchukuo and a sense of loyalty towards the CMCS and, to a certain degree, to China.

Northern China

After the signing of the Tanggu Truce in 1933, the Nanjing government and Japan ceased military engagements along the Great Wall. This ended the hostility that had existed since the Mukden Incident. The Truce then left space for the CMCS to resolve the second financial issue—that of the anti-smuggling policies across the Great Wall. However, this again placed the CMCS in a dilemma. On the one hand, if the Nanjing government could levy tariff tax on trade with Manchukuo, China’s customs revenues would increase and secure the payments necessary for its foreign loans and indemnity. This was particularly important, especially as it already had lost the revenues from all Manchurian custom houses. On the other hand, if the CMCS set up custom houses along the borderlines between China and Manchukuo, it would imply de jure recognition of Manchukuo.

Instructed by Nanjing, Maze sent Zhang Yongnian (張勇年, Chang Yung-nian) on a commission along the Great Wall, in order to ascertain the trade conditions and to find out the extent of the reported ‘smuggling of foreign goods from Manchuria into China across the Wall’, and then ‘the question of establishing Customs barriers at certain passes in the Wall will be considered’.Footnote ²⁷ Maze instructed Zhang to ‘investigate and report upon the measures which it is necessary for the Customs to enforce in order to protect the revenue on goods entering and leaving China Proper at various places along the Great Wall of China between Shanhaikwan [山海關] and Kalgan [張家口]’. However, Maze’s focus was not just on import and export but also on ‘clandestine importation’ as he reminded Zhang:

Zhang’s trip was not easy because ‘all the passes were still in the hands of either Japanese or bandits and … peace and order in the districts along the Great Wall had not yet been restored’. Thus, Zhang needed a ‘pass issued by the Military Attaché of the Japanese Legation’. During the investigation at Shanhaikwan, Zhang discovered that ‘different persons told different stories, and some, being afraid of getting into trouble with the Japanese authorities, dared not say even a single word’. After Zhang talked to ‘Lieutenant T. Nanba, chief of the Japanese garrison corps stationed at Chinwangtao’, Nanba guaranteed that the Japanese troops would not interfere in Zhang’s investigation. Zhang did not encounter direct interference but he was ‘followed and closely watched by detectives’, so that some of the shopkeepers at Gubeikuo were reluctant to answer his questions.Footnote ²⁹

At Jielingkou, ‘except for about 100 men of Manchukuo troops, there were neither Chinese police nor Japanese troops stationed’. Then the Manchukuo soldiers became a new problem as Zhang ‘was travelling officially’, so he needed to ‘avoid, as far as possible, coming in direct contact with the Manchukuo officials’.Footnote ³⁰ It was, however, noteworthy that Zhang received a pass from the Japanese Legation in Beiping but he was worried that having direct contact with Manchukuo would bring political trouble. This signified that for Nanjing, Japan, despite military engagements, was clearly a foreign nation that could still be dealt with through diplomatic procedures. Manchukuo was in a legal grey zone in terms of sovereignty and any contact with it would arouse suspicion.

However, Zhang’s approach demonstrated inconsistency between his hardline policies towards Manchukuo and his flexibility regarding his trade investigation with Japan. But Zhang’s proposal for setting up custom houses actually included a significant concession to Manchukuo. Because petty cases of robbery or kidnapping made peaceful conditions ‘a moot question’ and the Tanggu Truce bound ‘China to despatch regular troops to the so-called demilitarised zone for suppression work’,Footnote ³¹ Zhang proposed a pragmatic plan for placing potential custom houses along the Great Wall. He picked five locations, all to the south of the Great Wall as Figure 1 indicates.

Figure 1.

Zhang Yongnian’s suggested locations for setting up custom houses. The black circles are the locations of Manchukuo’s custom houses and the red circles are Zhang’s suggested locations for Chinese custom houses. Source: Chang Yung-Nian,  ‘Report on trade conditions along the Great Wall between Shanhaikwan and Kalgan’, Chinese Customs Publications,  V.  Office Series, No. 129, Copy of English translation of IG despatch to Kuan-wu Shu, pp. 32–33.

Zhang stated that ‘Manchukuo has already instituted control at Luan-ping [灤平], Ku-pei-kou [古北口], Ping-chuan [平泉], Ling-yuan [凌源], and Ch’ih-feng [赤峰]… we should have at least the same number of stations on this side at Ku-pei-kou [古北口], Hsi-feng-kou [喜峰口], Leng-kou [冷口], Chieh-ling-kou [界嶺口] and Yi-yuan-kou [義院口]’.Footnote ³²

The five locations for potential custom houses proposed by Zhang were more serious than any official recognition of a borderline between Nanjing and Manchukuo. The reason for this was that between the five locations of the Chinese custom houses and the five already existent Manchukuo custom houses, there was a large piece of ‘unmilitarized’ land. For the CMCS to set up the custom houses along the Great Wall would mean the Nanjing government automatically giving up the lands to the north of the Great Wall, which were not yet claimed by Manchukuo.

Apart from the sensitivity of borderlines with Manchukuo, Zhang also confronted another sensitive borderline issue with the Soviet Union. He proposed to establish the sixth custom house, as Figure 2 indicates, at Kalgan because ‘Outer Mongolia has been under the protection of Soviet Russia’, though ‘under Chinese suzerainty’. He predicted that ‘there must be every possibility of Russian goods slipping in or of Chinese goods moving out of the country without payment of Customs duty’.Footnote ³³

Figure 2.

The custom house at Kalgan for goods from the Mongolian Republic. The yellow line is the borderline between Manchukuo and the Mongolian Republic. Source: Chang Yung-Nian, ‘Report on trade conditions along the Great Wall between Shanhaikwan and Kalgan’, Chinese Customs Publications, V. Office Series, No. 129, Copy of English translation of IG despatch to Kuan-wu Shu, p. 33.

Again, the proposed location for the potential Kalgan Custom House was to the south of the Great Wall which meant making another concession to the Soviet Union and allowing another political body’s independence. It is easy to understand why China had to give up Manchuria because China could not overcome the Kwantung Army. However, the Soviet Union had not taken any military action against China, so if China automatically made a concession, it would cause a more devastating political storm. Therefore, although Maze submitted Zhang’s report to the Nanjing government, none of the six custom houses was established.

In the Manchukuo case, Chinese staff member Ding Guitang collaborated with the Japanese Fukumoto to formally acknowledge the CMCS’s jurisdiction over the Dairen custom house, in order to protect its overall revenues. The Nanjing government had to weigh the financial profit of such an act vis-à-vis its political cost, and decided to acquiesce to it. In the northern China scenario, Zhang Yongnian worked directly with the Japanese in investigating smuggling and proposing to set up custom houses along the Great Wall. On the one hand, Zhang was uncompromising in his attitude towards the Manchukuo officials; on the other hand, he was pragmatic in proposing to set up the custom houses south of the Great Wall, even if it meant making territorial concessions to Manchukuo and the Soviet Union. He clearly realized that if the custom houses were set up south of the Great Wall, the CMCS could avoid unnecessary disputes with Japan and the Soviet Union, which would generate better ‘international trade’ and a bigger tariff income. In the eyes of the CMCS, sovereign and territorial claims sometimes gave way to political and financial pragmatism. But the Nanjing government certainly did not agree on this point. However, since 7 July 1937, the Nanjing government started to incline towards a more pragmatic solution.

Occupied China

Since 7 July 1937, the CMCS was in a more embarrassing situation because its acting head was Chief Secretary Kishimoto Hirokichi. As no one could have foreseen the war breaking out, Maze was still in Britain as a delegation member accompanying Financial Minister Kong Xiangxi’s (孔祥熙, H. H. Kung) embassy to the coronation of George VI.Footnote ³⁴ In other words, China’s biggest revenue collecting agency was controlled by a Japanese and the revenues he collected continued to be channelled into China’s war chest for the War of Resistance against Japan. Before the outbreak of the Battle of Shanghai, the CMCS was headed by Kishimoto and the Nanjing government did not change this. The reason for this can be explained by Kishimoto’s preparations for the custom houses’ evacuation from coastal cities.

After Maze resumed charge, the Battle of Shanghai broke out on 13 August 1937 and all government units in Nanjing were making preparation for evacuations. Maze, however, refused to evacuate to Chongqing, which he explained by circulating a personal letter from Kung, in which Kung told Maze that ‘your service in the Customs is as valuable as it is long’ and he asked that ‘whatever you and your associates can do to help me maintain the integrity and reputation of our Customs Administration at this difficult time will be appreciated and remembered’.Footnote ³⁵ Although it did not give a firm instruction for Maze to stay in Shanghai, this letter left flexibility to legitimize Maze’s autonomy.

Before the outbreak of the Second World War in Europe, Western staff had not believed that a world war was coming, and felt that the War of Resistance would be another regional conflict. They generally felt that ‘it would be disastrous in the circumstances to be 100% loyal’ to the Chongqing government and it was, more than ever, necessary to emphasize the CMCS’s ‘freedom from politics’.Footnote ³⁶ In their eyes, it was ‘not a question of our “abandoning”’ but the government ‘abandoned’ the Western staff in occupied China as it ‘left’ them in the ‘lurch’, ‘retired to safer places’.Footnote ³⁷ However, it was different for the Japanese staff members as they had been dragged into the deteriorating relations between China and Japan since 1931; yet they had built up a strong bond with China and Chinese people as most of them had joined the CMCS before 1927.Footnote ³⁸ The Japanese staff became ‘a sort of unofficial intermediary’ between the Chinese staff and the Japanese military.Footnote ³⁹ The most effective unofficial intermediary was Kishimoto. As the second-in-command and a Japanese, he provided the CMCS with more leeway, but it could not last forever.

Before the outbreak of the Pacific War, the Japanese military had already occupied most of the Chinese coastal cities. Consequently, Kishimoto’s interactions with these custom houses were inevitably disclosed by the Japanese military. For instance, when the Takashima troops (高嶋部隊) took over the Pakhoi Custom House in February 1941, Kishimoto’s correspondence with Pakhoi was disclosed. The Japanese military’s report claimed that Kishimoto was a ‘two-faced personality’ and listed his ‘hostile acts’: he (1) ‘transferred the revenues from the 14 Custom Houses in Unoccupied China’ to Chongqing, (2) ‘requested 19 Custom Houses in Unoccupied China [Free China] to prevent tariff tax fraud issue in terms of the smuggling from Occupied China to Unoccupied [Free] China’, (3) ‘instructed the Pakhoi Commissioner for destroying all important documents and records before the Japanese military occupied the Custom House’, (4) ‘discussed with the IG how the collection of Customs revenues could be done without the help of the Yokohama Spice Bank, and Chongqing, Hongkong and Shanghai would be most convenient’, and (5) ‘instructed the Pakhoi Commissioner to open an account in the Hongkong branch of the Bank of China. This demonstrated his collaboration with the Chongqing government.’Footnote ⁴⁰

In effect, the Japanese military reached the following conclusions about Kishimoto and the CMCS:

1. 1. Kishimoto’s ‘two-faced personality’ between Occupied and Free China was demonstrated by the fact that he would transfer the order from the Chongqing government’s Ministry of Finance or even instruct local custom houses to collaborate with the Chongqing government. It brought suspicion whether he had any sense of being a Japanese national.

2. 2. The Japanese staff’s hostility [towards the Japanese empire] was probably to consolidate their careers in the CMCS but this act was undoubtedly treasonous. The behaviour of the several hundred Japanese employees’ should receive attention and guidance.

3. 3. As a Japanese, it was not unfair to state that Kishimoto still helped the Chongqing government’s military resistance against Japan. The Japanese authorities turned a blind eye to these acts because they did not understand the nature of the CMCS. The utmost task was to reform the CMCS thoroughly and eliminate these Japanese employees.Footnote ⁴¹

Although these accusations towards Kishimoto were serious, he was probably not aware of them and kept working with the Chongqing government. The Japanese military did not explain why they tolerated this ‘two-faced’ Japanese citizen. The only logical conclusion is that the military probably could not find a better person to replace him.

Collaborationist government

The year 1939 marks a new stage for the foreign and Chinese staff’s collaborationism at the CMCS for two reasons. For the former, the reason was the outbreak of the Second World War in Europe and for the latter it was the inauguration of the Collaborationist government in Nanjing. Interestingly, Maze was more concerned about the latter. He felt ‘many troublesome questions concerning the Customs position will come up for discussion, and it may prove impossible for me to coordinate the conflicting claims of both parties, unless the Powers intervene effectively’.Footnote ⁴²

In order to bring in the intervention by the ‘Powers’, Maze wrote to Non-Resident Secretary Cubbon, who was the inspector-general’s liaison with the British government at the London office, to express his difficulties that ‘for many months past I have, as the opportunity arose, endeavoured to create in the minds of the Japanese Authorities (here and in Tokyo) the impression that it would be a political error on the part of Wang Ching-wei’s “Government” to raise at the start semi-foreign controversial issues likely to irritate the interested Powers—such as… the direct control of the Customs Administration’.Footnote ⁴³

Maze actually told ‘the local Japanese Embassy’ that ‘instead of appointing him IG’, it might be ‘expedient’ for the Collaborationist government to ‘proceed on the assumption that they are, as it were, the continuation of the former Nanking Government, and as such the inheritors of all Government Departments, including the Customs’.Footnote ⁴⁴ Kishimoto then talked to the Western powers and ‘stimulated the acceptance’ of ‘the general ideas’. Kishimoto’s general ideas were that the Collaborationist government’s fiscal policy ‘could be set forth through the medium of local Superintendents, leaving local Commissioners to protest, and, where necessary and unavoidable, to give way (where non-essentials are concerned) to what may be regarded in the peculiar circumstances prevailing as force majeure’.Footnote ⁴⁵

After Maze and Kishimoto convinced the Western powers and Japan, the Collaborationist government had to accept this proposal so Maze received official recognition from Financial Minister Zhou Fohai (Chou Fo-hai). Zhou said that the CMCS was ‘of great importance’, and Maze had been ‘rendering remarkably meritorious service’. Maze was ‘instructed to order all the Commissioners of Customs to carry on as usual’ so that both ‘the Customs affairs and the National Treasury’ would benefit.Footnote ⁴⁶

Other than the fact that the Collaborationist government could not deny the proposal, Zhou’s order revealed another important reason for recognizing the CMCS, namely the trade and its taxation income. The newly inaugurated Collaborationist government’s priority was to stabilize its own finances.Footnote ⁴⁷ As Maze still controlled all custom houses throughout China, any sort of bold interference would jeopardize not only the ‘Customs affairs’ but also the imposition of a tobacco and sugar tax.Footnote ⁴⁸

Thus, the Anglo-Japanese team were able to ensure the CMCS’s survival. However, at this critical moment, Kishimoto had already completed his 35-year service on 31 July 1940 and should have been subject to compulsory retirement. But Maze decided to exercise his ‘discretionary powers as IG and to retain him [Kishimoto] in the capacity of Chief Secretary until further notice’. Kishimoto would ‘in all other respects continue to be treated as an ordinary member of the Service but without pensions benefits’.Footnote ⁴⁹

For Kishimoto’s personal standpoint, it would have been best to retrieve his pension and escape from this embarrassing situation, but he did not because a more pressing issue arose. The collaborationist Director-General Zhang Sumin started to approach the CMCS. At the first meeting, Zhang hoped that he and Maze would ‘have closer personal contacts than has been the case heretofore’. Zhang reminded Maze of the fact that ‘the existing modus vivendi referred to has been in force’ from 1937–1940. Although the CMCS met with Japanese demands in an informal manner, it did so ‘only after a great deal of discussion and delay’. This time, Zhang gently reminded Maze, the Japanese military felt that ‘the IG enjoyed considerable independence vis-a-vis the Japanese authorities, etc., [which] could not reasonably be expected to continue; and that it had not in the past proved wholly satisfactory’.Footnote ⁵⁰

On 30 November 1940, eight months after the Collaborationist government’s inauguration, it concluded an official diplomatic relationship with Japan by signing the Sino-Japanese Fundamental Treaty (中日基本條約) and the Joint Declaration between China, Japan, and Manchukuo (中日滿共同宣言).Footnote ⁵¹ The Japanese empire and the Axis powers gave the Collaborationist government the de jure and de facto status of being the central government of China.

Zhang immediately arranged a follow-up meeting with Maze, who foresaw the sensitivity of this meeting and sent for a third player, namely the Chinese secretary Ding Guitang. This time, Zhang’s approach was not soft. He directly brought up three demands: (1) Maze should be ordered to release the surplus to the Collaborationist government; (2) if the inspector-general was ‘not in a position to do so for fear of being dismissed by the Chunking [Chongqing] Government’, Kishimoto ‘should be appointed as a Deputy IG who may be able to sign cheques on behalf of the IG’; and (3) the local commissioners should be ‘ordered through the various Superintendents to release the surplus directly to the Collaborationist Government’.

Faced with Zhang’s aggressive attitude, Ding was uncompromising in responding to Zhang’s three proposals. First, if Maze was ‘forced’ to release the surplus, he would ‘most probably leave’ and consequently the CMCS would be dissolved. Ding even stated that he did not ‘think even the German Government would like to see the break of the Chinese Customs Service’. Secondly, the deputy inspector-general appointment ‘must be made by the government’ but the Chongqing government would never appoint Kishimoto. If the Collaborationist government appointed him, it would ‘affect the Customs integrity’ just as a new inspector-general would have been appointed. Ding, moreover, explained that ‘the Deputy IG cannot exercise authority by himself and he only acts under the authority of the Inspector General’. He then assured Zhang that Kishimoto’s current post was the most important post in the Inspectorate, with the authority to sign any documents for the inspector-general. Thirdly, Ding predicted that the superintendents’ direct dealings with the Collaborationist government ‘might be done under force majeure’, and judging from precedents from the various civil wars in China, Zhang and his [the Collaborationist] government should allow the present status quo to remain in place ‘until the time when a general settlement has become necessary’.Footnote ⁵²

Ding wrote another report analysing his meeting with Zhang, in which he emphasized that ‘it would be much better for the Chief Secretary [Kishimoto] to be kept informed of all matters going on’ between the Inspectorate and the Collaborationist government.Footnote ⁵³ Judging by this meeting with Zhang, Maze, Kishimoto, and Ding were decisively united against the Collaborationist government.

After settling the matter with Western powers, Japan, and the Collaborationist government in Shanghai, Maze was released from the anxiety generated by the inauguration of the Collaborationist government. He explained why Japan had to live with this arrangement: ‘If Japan is foolish enough to take on the States her fate is sealed, the American air force can bomb every town in Japan from their Pacific base, and every town is vulnerable.’Footnote ⁵⁴ Maze, obviously, was mistaken about the strength of the US air force and the ambition of Japan—and he also made another mistake. The fourth party involved—the Chongqing government—would also change its attitude.

Chongqing government

Maze was satisfied with his arrangements with the three parties in Shanghai but he still had to get the Chongqing government on the same page. The room left for the Chongqing government to continue tolerating Maze’s tactics with the collaborationists had become smaller. Maze realized how sensitive the two meetings with the collaborationist Director-General Zhang were, so he wrote two long letters to Chongqing’s Financial Minister Kong. Maze explained that the Chongqing government enjoyed ‘a certain prestige’ from the status quo because it continued to be ‘the central and controlling authority of the Customs’. But having a nominal status of central government was not enough for Kong, so Maze emphasized the importance of international trade and finance after the war by stating that ‘when the present hostilities cease’, ‘should China be obliged to enter the Money markets of the world’,Footnote ⁵⁵ the CMCS would be needed.

Thus, Maze had to ‘bend occasionally rather than break entirely’. By doing so, ‘the Japanese authorities have been prevented from appointing their own personnel and ousting the Inspectorate from Shanghai’. If the Inspectorate withdrew from Shanghai, Maze emphasized that this ‘would be regarded generally as being equivalent to defeat; and, what is worse, would immediately open the door for a much stronger Japanese element in, and control over, the Customs Service’. This meant this withdrawal would be ‘handing over the entire administration to Japanese control, with disastrous results for China’s prestige and credit’.Footnote ⁵⁶

But this letter only explained the first meeting with Zhang Sumin. After the second meeting between Ding and Zhang, Maze immediately reported back to Kong about the pressure from the Collaborationist government, and he promised that he would neither ‘accept any official appointment offered’ by the Collaborationist government, nor ‘execute their “instructions” regarding such matters as bending over to them the Customs revenue surplus, etc.’. However, he needed Kong’s understanding regarding his occasional informal contact with local authorities in occupied ports, and he emphasized that ‘it was wiser’ to ‘give way a little’ in order to retain the ‘partial control which happily still exists, with the backing of the interested Powers—England and the United States’.Footnote ⁵⁷

Such tactics, however, were not acceptable to Kong. He replied to Maze that ‘if I were less acquainted with the way how the Japanese and their puppets act, I would have agreed with what you suggested. Unfortunately, they invariably mistake concession as a sign of weakness. Therefore, I can see no useful purpose will be served by trying to humor them. You will probably play the very game they desire and lose in the end the very thing you strive to preserve.’Footnote ⁵⁸ The reason why Kong became less supportive of Maze was that America and Britain had retreated from their original ‘Appeasement’ policies to the Japanese empire, and the Chongqing government had accordingly changed to a hardline policy towards the CMCS ‘owing to the backing of England and the States’. Maze complained that this did not ‘help matters!’:

Since the Chongqing government had toughened its stance towards Japan due to America and Britain’s policy change outlined above, Maze had to seek an intermediary to talk to Britain and Chonqing. The candidate was Chinese Ambassador to Britain Gu Weijin (顧維鈞, Wellington Koo). Gu arrived in London in July 1941 to settle ‘five major issues’ with the British government: foreign loans, the Burma road, Hong Kong, India, and the Allies’ military strategy.Footnote ⁶⁰ Gu realized that Britain’s priority in Asia was to maintain its privileges and thus was keen to make concessions to Japan at China’s expense.Footnote ⁶¹ Thus, it was necessary for Gu to understand the CMCS’s political and financial value to Chongqing.

Non-Resident Secretary Cubbon, the inspector-general’s liaison to the British government at the London office, answered Gu. He told Maze that Gu had ‘lent a willing ear to my account of your skill and diplomacy at holding on at Shanghai, showed great interest in my remark that you were the sole representative there of the Chungking Government’.Footnote ⁶² Then Maze wrote a letter to Gu, re-emphasizing that he was ‘the sole representative of the Chinese Government operating officially in occupied China, without officially recognizing the de facto Government in Nanking’. But Maze wanted to share his difficulties with Gu:

Although Maze now seriously consider this evacuation plan, it was too late: two months after this letter, Japan attacked Pearl Harbor on 8 December 1941.

Immediately after he was informed, Maze ordered the burning of all confidential documents.Footnote ⁶⁴ On 9 December, the Chongqing government declared war on Japan. Because Chongqing and Britain had become Japan’s official enemies. Maze, a British citizen sometimes taking orders from Chongqing, was dismissed on 10 December, one day before completing his ‘50-year service in the CMCS’,Footnote ⁶⁵ and replaced by Kishimoto.Footnote ⁶⁶ On 13 December, 221 British and American employees were discharged.Footnote ⁶⁷ Before he was dismissed, Maze drafted an unofficial letter and instructed Ding to read it to the staff to let them know that he would tell the Chongqing government that ‘viewed merely from an administrative aspect, it would doubtless prove advantageous in the long run if they continued their routine work for the time being’.Footnote ⁶⁸ Two weeks after Maze’s letter, on Christmas Eve, Kishimoto also issued a circular which stated that the Collaborationist government had directed him to ‘inform the Chinese and foreign staff [excluding the Americans and British] that their position and benefits due under the existing pension system are guaranteed’ and he was ‘confident that the Staff thus reassured will execute their duties with unabated efficiency, vigilance, and loyalty’.Footnote ⁶⁹

Ding’s reply to Zhang Sumin; Maze’s letters to Kong, to Gu, and to the staff; and Kishimoto’s circular carried the same message as that given by Fukumoto to the British consular in 1932—that ‘the Customs had stood between China and disaster before, and there was no knowing when it might have to do so again, so that it was essential to preserve the administration intact if possible, or to restore it at the earliest possible moment if it is damaged, for the benefit not only of China but of every other interested party’.Footnote ⁷⁰ These statements, spanning eight years, narrate the story of how the CMCS staff muddled through a most difficult period because the necessity of international trade and obligations outranked periodic engagements and hostilities.

Yet there was one noticeable difference between the inauguration of Manchukuo and Pearl Harbor. The former happened in March 1932, giving staff time to arrange their and their families’ evacuation. However, because of the abrupt nature of the outbreak of the Pacific War, the CMCS employees were unable to leave their posts immediately. This meant if they decided to leave they had to work through the Japanese military’s surveillance and leave their families in occupied China. Faced with such an impossible choice, only a few of them made it.