Chang Hsueh-liang had been reluctant to join Chiang Kai-shek’s Nationalist war effort but on 29 December, shortly after Donald’s arrival, he hoisted the Nationalist flag over Man- churia. The commanders of the Kwantung Army had killed the Old Marshal not only for failing to defeat Chiang but also because they saw his son as a weakling who would be easier to manipulate. They regarded the flag episode as nothing more than an act of bravado. Chang then executed two Japanese collaborators among his commanders and made it plain that he intended to govern his own country without Japanese assistance. The Kwantung commanders took this as a grave insult.34
Donald’s spirits were revived by the arrival of his Russian friend Irina. The beautiful Russian had gone to the United States with her mother, funding the trip by selling a large family diamond. ‘I was homesick for China and wrote to Mr William Henry Donald,’ she says. ‘He gave me a job as his secretary.’35
Back in Shanghai, the New Zealander Rewi Alley had taken a job with the Shanghai Fire Department. His duties included inspecting factories for fire hazards, a task which brought him into close contact with the problems of the Chinese workforce. Alley, a man of average height with short-cropped ginger hair, a prominent nose and an unassuming manner, was born in Canterbury, New Zealand, in 1897. His parents named him after Rewi Te Manipoto, a Maori chieftain of legendary bravery. Living up to his name, Rewi Alley won a medal for gallantry with the New Zealand Expeditionary Force in World War I. After the war, he took a half share in a sheep farm as a soldier-settler but was wiped out during the Depression in what he described as ‘six years of loneliness and struggle’. The experience turned him into a committed left-winger.
Fire Officer Alley, smartly dressed in cap, greatcoat and muffler, quickly discovered that life as an inspector presented some unexpected hazards. On one occasion an attractive White Russian woman applied for a licence to open a boarding house. Alley inspected the property and noticed that all the fire exits had been blocked with jerry-built bathrooms. ‘They’ll have to go,’ he told her.
‘Wait a minute,’ the Russian said. She slipped into her bedroom and emerged stark naked apart from a wrap around her shoulder. ‘Come in, darlink,’ she cooed. Alley, who wasn’t remotely interested in women, made his excuses and left.36
During this period he learned Mandarin, made friends in the labour unions and became a secret member of the Chinese Communist Party. On his holidays in 1929 he toured rural China helping with famine relief. He adopted a 14-year-old Chinese orphan whom he named Alan and later another Chinese boy called Mike. He lived with both boys in Shanghai and made sure they received a good education.
Alley was a dedicated Communist prepared to risk everything for the party. He sheltered Communist fighters in his home and once washed the blood off money stolen by Red Army soldiers during raids disguised as anti-Japanese protests.37
By now, Chiang Kai-shek had achieved the unification of China, but only on paper. His next objective was to develop a workable centralised government under Nationalist single-party control and at the same time complete the annihilation of the Communists. He ordered the military governors in every province to disband their forces and enrol them in the Nationalist Army under his command.38
Feng Yu-hsiang, the Christian General who had been pursuing his own anti-British agenda with the aid of Russian money and weapons, had no intention of turning his People’s Army over to Chiang. He found a willing frontman in Wang Ching-wei, who had been paying lip service to his old enemy Chiang and was willing to defect. A number of lesser warlords, sensing that the good times were about to end, also loaned their support.39
By May 1929, Chiang’s commanders were engaged in battles with various rebellious factions from Wuhan to Shanghai, south to Foochow and north to Peking (which Chiang had renamed Peiping – ‘Northern Peace’). Casualties were high on all sides and with the country in the grip of famine, Nationalist supply lines were stretched to breaking point.
Late that month the embalmed remains of Sun Yat-sen were placed in an American-made bronze coffin and brought south along his beloved railway line to Nanking. Then, with great ceremony and in front of hundreds of VIP mourners led by Madame Sun Yat-sen, the coffin was placed in the rotunda of a mausoleum on the slopes of Purple Mountain overlooking the tombs of the Ming emperors.40
The heavy symbolism of the occasion seemed to galvanise Chiang Kai-shek. Over the next 12 months he gained the upper hand on the battlefields, receiving a huge boost in September 1930 when Chang Hsueh-liang recognised the Nationalists as his best chance of retaining his autonomy in Manchuria and publicly swore allegiance to him. Chiang immediately appoin- ted the Young Marshal deputy commander-in-chief of the armed forces and governor of North China.
The sudden presence of thousands of battle-hardened Man- churians quickly persuaded the rebel commanders to negotiate a settlement with Chiang. They accepted him as commander- in-chief, while the turncoat Wang Ching-wei was made president of the Nanking executive cabinet. Altogether, the rebellion had cost the lives of an estimated 300,000 people.
Once an uneasy peace had been restored, Chiang travelled to his wife’s house in Shanghai and followed through on a plan to convert to Christianity, describing Jesus as ‘the first champion of national revolution’.41
Chiang’s conversion was unlikely to gain favour with radical elements in the Kuomintang who regarded all religion – Confucianism, Buddhism, Islam, Judaism, Christianity – as a tool of imperialism designed to keep the people in servitude.42
Stalin, meanwhile, had not given up on China following the expulsion of Borodin and his Red Army comrades. In early 1930 Moscow dispatched one of its most brilliant agents, the handsome half-German, half-Russian Richard Sorge, to Shanghai to gather intelligence and foment a Communist revolution. Posing as a pro-Nazi newspaperman, Sorge infiltrated the German military advisers’ group at Chiang’s forward intelligence HQ. He seduced the disaffected wife of one of the advisers to steal Nationalist codes used in messages between the general staff and the field units attacking the Red Army. These were then passed on to the Communist leaders, enabling Mao Tse-tung to obtain precise intelligence about the movements of Chiang’s forces. On 30 December 1930 he threw 40,000 Communist troops and civilians into an ambush against 9000 Nationalists, most of whom surrendered without a fight.
The Nationalist general was exhibited at a mass rally addressed by Mao. To chants of ‘Chop his head off! Eat his flesh!’, the general was decapitated. His head was sent down the river attached to a wooden door, with a little white flag and a note saying it was ‘a gift’ for his superiors.
Patrick Givens’s Special Branch suspected Richard Sorge of espionage but his cover as a newspaperman held up to scrutiny. He had established himself as an expert on Chinese agriculture, which gave him freedom to travel around the country making contact with members of the Chinese Communist Party. Secretly, the hard-drinking Casanova met the German Soviet spy Ruth Kuczynski and the left-wing American journalist Agnes Smedley, both of whom became his lovers. Sorge was so successful at recruiting new spies that General MacArthur’s intelligence chief Charles Willoughby later referred to Shanghai as ‘Stalin’s vineyard’.
While Richard Sorge was a highly trained and ideologically committed Comintern agent, Alan Raymond, an Australian who stepped ashore from the steamer Buffington Court from Sydney in February 1931, would become a spy for purely mercenary reasons. The chance of adventure in a wide-open city like Shanghai appealed enormously to Raymond, a slim, swarthy Australian of 21, with black hair and a pencil-thin moustache.
Alan Willoughby Raymond was born in Melbourne on 27 February 1909. His mother Irene Johnson was English, although she was born at Tulle, France. She married English architect Alan Raymond after arriving in Australia in 1891. Following Irene’s death, Alan Sr married Ellen Spice, who already had two daughters, Jean and Dorothy. Alan Raymond Jr was raised and educated in Sydney. His father was kille
d in a motor accident when he was a child and he found himself the unwanted stepson in a household of women.
At 16, Alan moved to Melbourne to work for Coles department store. After 18 months, he was transferred back to Sydney when Coles opened a new store there. Fate was against him: like his father, he was involved in a motor accident and was laid up for six months. When he recovered, he turned his hand to journalism and spent the next year scraping together his boat fare to Shanghai.43
Raymond had no intention of becoming a spy when he stepped on to The Bund, but he was an opportunist and a gambler who was prepared to take unacceptable risks in order to make money. His first job was selling marble for the British firm of Harvie Cooke & Company, even though he had no experience in the marble industry. When he was dismissed from that post, he transferred to one of Harvie Cooke’s rivals, the Shanghai Marble Company, for which he travelled around China and Japan.
Shanghai operated on the chit system under which Europeans could get credit in stores and restaurants, provided they settled up on the first of each month. Raymond lost his job again and ran up debts which he was unable to repay. In an effort to get square, he visited the city’s pony-racing tracks and the Canidrome greyhound track in Frenchtown. One of the city’s biggest gamblers was fellow Australian Dr Bill O’Hara, but whereas O’Hara was a frequent winner, Raymond invariably lost. As his financial problems increased, he wrote a number of dishonoured cheques to business associates and his name was ‘posted’ at the Shanghai Race Club for unpaid debts.
Shunned by Europeans for his dishonesty – and possibly because of his ‘Eurasian’ appearance – Raymond socialised with the less-principled members of Shanghai’s racing fraternity. ‘His association with low Chinese women, Japs and Germans made him an object of loathing among reputable Britishers in Shanghai,’ the Sydney branch of the Australian Security Service reported in 1943. Raymond thought this attitude applied to Australians in general. ‘During the years I spent in the East,’ he wrote in a postwar statement, ‘I became conscious that the general attitude on the part of the Britishers here towards Australians was one of superiority and condescension.’
I also observed that we had little direct communication with China and other countries here and even had to negotiate drafts on Australian banks through London. I came to the conclusion that direct contact was urgently needed if we were to derive the greatest benefit from our geographical location near the Orient.44
Meanwhile, Eleanor Hinder had taken over from Lily Haas as the YWCA’s industrial secretary. During this period, she and Viola Smith fell in love. They moved into a flat at 8 Young Allen Court and took their holidays together in Australia and the United States. In 1928, they were separated when Eleanor spent several months in Honolulu organising the first Pan-Pacific Women’s Conference and then returned to Australia to give a series of lectures on China.
In 1931 she was invited back to Shanghai to advise the Emp- loyers Federation on how its members could apply the Nationalist Government’s new Factory Act, the first step towards abolishing abuses. ‘A Labour Department has been set up and its existence induces the hope that something may ultimately be achieved for the benefit of women and children,’ she told an audience of Australian women in Perth. ‘It is, of course, impossible to predict whether the Nanking regime will be lasting.’45
Eleanor and Viola Smith knew it was essential to persuade the municipal councillors to enforce the new Chinese labour laws. And that meant challenging their all-male preserve. Council membership had gradually changed over the years: there were now 14 councillors of whom five were British, five Chinese, two American and two Japanese. The Shanghai foreign women’s clubs made political history when they nominated Viola as the first female candidate to take part in a council election. ‘Although Shanghai women have previously considered representation on the council, Miss Smith’s nomination constitutes the first attempt to invade the municipal domain,’ The West Australian reported.46
Among Viola’s staunchest supporters was Dr Frank Rawlinson’s Moral Welfare Society whose avowed aim was to remove the ‘iniquitous blemishes on the life of Shanghai’. Sterling Fessenden had resigned as head of the council in 1929 and the new chairman, Hong Kong-born businessman Harry Arnhold, was known to have ‘reformist tendencies’. But the ratepayers of the International Settlement weren’t quite ready for sexual equality. Viola was defeated in the election – and Arnhold lost his chairmanship.
In the summer of 1931 Hallett Abend of the New York Times sailed from Shanghai to Dairen after receiving a tip-off from a Japanese contact that Japan was about to solve ‘the Manchurian question’. He was astonished to see freight trains loaded with Japanese artillery, ammunition and supplies, plus fodder for the cavalry’s horses, trundling along the South Manchurian Railway. The Kwantung Army, whose job was to protect the railway zone, had dispersed perhaps 40,000 troops from Dairen as far north as Harbin and east to the Korean border in contravention of Japan’s treaties with China.
At Mukden, there was no sign of the Young Marshal. Anticipating trouble, he had moved the bulk of his 250,000 troops into Jehol, leaving only small garrisons in most towns. He had then travelled to Peking with his entourage, including his two wives, Bill Donald, Irina and Jimmy Elder, and checked himself into the Rockefeller Hospital, where he had rented an entire wing to undergo treatment for his drug addiction.
The local administrators left behind at his Mukden headquarters had no power to deal with Japanese grievances. Complaints about Chinese treaty breaches were referred to Nanking, which shuffled them back to Mukden without taking any action. The Japanese took this buck-passing as an insult and complained even more vociferously. Their main complaint was that Chinese engineers were building railway lines parallel to the South Manchurian Railway, thus competing for business. All of these wrongs, however, were simply pretexts to support Japan’s central claim that China was not really a nation at all and that her proper place in the world was as a Japanese vassal.
At harvest time, as fields of golden Manchurian wheat awaited the threshers, it was clear Japan was preparing to take military action. Hallett Abend travelled to Peking, where he discussed his findings with Bill Donald and asked if he could interview the Young Marshal. Chang Hsueh-liang was still undergoing treatment in a well-guarded wing of the hospital and Donald was reluctant to let the reporter see him. Considering the gravity of the situation, however, he finally relented: perhaps Abend’s eyewitness testimony of Japan’s intentions in his homeland might strengthen Chang’s will to recover.
‘I was shocked to see the sickly, emaciated, drug-blurred individual that Marshal Chang had become,’ Abend wrote in his memoir. ‘When I had first known him, in the autumn of 1926, he had been a husky, red-cheeked young military commander. In 1931, he was obviously a physical and mental wreck.’1
On 18 September 1931 a Japanese officer of the Kwantung Army set off a small explosive charge beside the South Manchurian Railway line north of Mukden. The blast occurred shortly before 10.30 pm but damage was so slight that the southbound train from Changchun arrived in Mukden on time.
The ‘Mukden Incident’ was blamed on Chinese saboteurs. Displaying two damaged railway sleepers, half a dozen fishplates, one rifle and two Chinese soldiers’ caps as evidence, the Kwantung general staff set plans in motion to occupy the three rich Manchurian provinces. The following day Japanese planes from Korea bombed Mukden and Changchun and Japanese troops took control of the Young Marshal’s capital.
That evening a shaky Chang Hsueh-liang dined at the British Legation with Bill Donald and then visited the theatre. Despite a lengthy stay in hospital, he was still addicted to opium, morphine and heroin – his ‘cure’ at the hands of the best physicians Western medicine could provide had failed dismally.
While the Young Marshal stayed in Peking, Bill Donald flew to Nanking in his Ford tri-motor aircraft to discuss the crisis with Chiang Kai-shek.2 The pragm
atic Generalissimo, who had returned to Nanking on 20 September, weighed up his options. As the Chinese armed forces were too weak to defeat Japan in Manchuria, he would leave it up to the peacekeepers of the League of Nations to take action. Meanwhile, the Young Marshal’s troops would be used to attack Mao Tse-tung’s People’s Liberation Army in North China.3
None of the Kwantung Army’s actions in Manchuria had been authorised by the Imperial Diet or the Japanese Government but they were wildly popular with the masses and received the blessing of Emperor Hirohito and his militarist cabinet. China’s protestations to the league and the outrage of the great parliaments of the world were met with Japanese insolence. ‘What do those talkative gentlemen know about conditions here?’ one Japanese general sneered. ‘We are establishing peace and order in Manchuria. Their activities are very tiresome.’
The Japanese had hoped that a quick victory with limited objectives would win Western approval but stubborn resistance from small pockets of the Young Marshal’s rearguard forced them to bring in large numbers of reinforcements. The undeclared war rapidly spread to China proper, particularly Shanghai where the Chinese boycotted Japanese goods and formed anti-Japanese societies.4
Shelves were stripped of Japanese commodities and burned in the street; 50,000 demonstrators demanded the death penalty for anybody trading with the enemy. Chinese magistrates refused to convict Chinese agitators accused of stealing Japanese goods on the grounds that they were activated by ‘patriotic motives’.5
In a matter of weeks the godowns on the Whangpoo were bursting with unsold products, slashing Japanese imports by 40 per cent in the last four months of 1931 and by more than 90 per cent in February 1932. Chinese banks in Shanghai refused to do business with Japanese companies, while Japanese spinning mills fell idle. The financial situation became so critical for Japanese manufacturers that in December the Shanghai Japanese Industrialists Association applied to Tokyo for loans to avoid its members going bankrupt.6
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