The Deluge

by Adam Tooze

  Modernizing militarism had been the stock in trade of Chinese warlord politics since the era of Yuan Shi-kai, the first President of the Republic of China. The truly distinctive contribution of the Communists was to widen the social imagination of Chinese nationalism. When over the winter of 1923–4 the Guomindang base in Canton was threatened by the forces of a regional warlord, Borodin urged a radical programme of mass mobilization. He recommended a decree expropriating the landed gentry and distributing land to peasants, as well as an eight-hour day for industrial labour and a minimum wage. Out of concern for his middle-class support, Sun Yat-sen refused to concede Borodin’s more inflammatory demands. But for the first time social demands had been coupled to the Guomindang’s Nationalist agenda. In June 1925 Nationalist activists in Canton helped to sustain a massive strike by a quarter of a million workers in Hong Kong, as well as a protracted and highly effective boycott of trade with the British concession.48 In the 500-mile corridor that stretched north from Canton to Wuhan and beyond, a peasant rebellion was brewing.49 Under the influence of Communist organizer Peng Pai, the Guomindang’s farmers’ bureau began developing a programme for the mass base of the party.50 The Guomindang established an agrarian leadership school, which from May 1926 was directed by the young Hunanese revolutionary Mao Zedong.51 By the end of the first year of its efforts, Mao could claim 1.2 million peasants in the ranks of the new organization.52

  With the northern warlords having eviscerated each other, over the summer of 1925 Blyukher and his Chinese collaborators worked out what the Russian dubbed the ‘The Great Guomindang Military Plan’ – a coordinated military campaign to extend the influence of the Guomindang from its southern base in Guangdong province, north into the Yangtze river valley. From there they might strike towards Beijing.53 This was a campaign of unprecedented scale, involving the unification of two-thirds of China, a territory inhabited by as many as 200 million people and ruled by five major warlord groupings, who could, as they had shown in 1924, mobilize formidable armies amounting to 1.2 million soldiers, whereas the Nationalists mustered only 150,000.54 Even with the Zhili in disarray, this was not a venture to be undertaken lightly. At first the Nationalists hoped that a conference of warlords might bring unification without armed struggle. That prospect evaporated with Sun Yat-sen’s untimely death in March 1925, which both robbed the unification conference of its obvious figurehead and unsettled Moscow’s influence within the Guomindang.

  Though Sun committed his party in his testament to continuing the alliance with the Soviets, it was now split between a left wing, closer to the Chinese Communist Party, and a military wing headed by Chiang Kai-shek. In March 1926 Chiang showed his hand by launching a political coup within the Nationalist leadership in Canton, rolling back the influence of the Communists and having himself appointed head of the National Revolutionary Army. Believing that there was no time to lose, the Comintern decided to go over to the offensive. Leon Trotsky, who was urging that the Chinese Communists should exit the Guomindang and establish their own military base amongst the peasantry and workers of Guangdong, was overridden. With Stalin and Bukharin to the fore, the Comintern threw itself wholeheartedly into preparations for the decisive Northern Expedition.55

  In the short term the result was a triumph. Whilst the prospects of revolution may have been fading in Europe with the British general strike, between June and December 1926 the Chinese National Republican Army (NRA) waged an unprecedentedly well-organized and successful campaign that brought most of central and southern China under Nationalist control. Blyukher and his staff coordinated operational planning. Soviet pilots provided air cover. Leading Chinese Communists gave political direction to the more left-leaning divisions of the NRA. In many provinces the campaign against the warlords was carried forward on a tide of peasant rebellion.56 The young Mao invoked the image of a ‘fierce wind, or tempest, a force so swift and violent that no power, however great, will be able to hold it back’.57

  After a 38-day siege, on 10 October 1926, the fifteenth anniversary of the 1911 revolution, the National Revolutionary Army took the city of Hankou-Wuchang, where the revolution had begun. The Western Powers were unsettled as never before. Already in April 1926, London had withdrawn recognition from what remained of the Chinese government in Beijing.58 Now on 18 December, in an effort to respond to the Nationalist surge, the British Embassy issued a public memorandum acknowledging that the ‘situation which exists in China today is . . . entirely different from that which faced the powers at the time they framed the Washington treaties’.59 The great powers must ‘abandon the idea that the economic and political development of China can only be secured under foreign tutelage’. They must come to terms with the demands of the Chinese Nationalists for treaty revision.60

  But how far would the British go toward accommodating Nationalist demands? Almost immediately the limits of flexibility were put to the test. On 4 January 1927 after weeks of unrest, a Chinese crowd backed up by Republican troops faced down a detachment of British marines and occupied the British concession in Hankou-Wuchang. Dexterous manoeuvring on the spot avoided bloodshed, but the shock to the British was dramatic. There were those in London, Churchill among them, who called for immediate retaliation. But Foreign Secretary Austen Chamberlain was well aware how ‘deeply pacific’ was the attitude of the British public and how badly any aggressive action would be received in Washington: ‘only by . . . patience, only by making clear to everyone how earnestly’ Britain was ‘seeking a peaceful solution’, and ‘how liberal’ its ‘policy was’, would it be possible to mobilize the necessary force, if British strategic interests were truly threatened.61

  The strategic asset over which Britain would stand its ground was Shanghai. The city was the hub of British commerce in East Asia. Hundreds of millions of pounds were at stake. On 17 January 1927 the British cabinet decided to deploy 20,000 troops to China, backed up by a formidable display of naval power, including three cruisers, gunboats and a flotilla of destroyers. Altogether by February, 35 warships from 7 nations were assembled in Shanghai. Along the coastline of China the Royal Navy had a fleet of 2 light aircraft carriers, 12 cruisers, 20 destroyers, 12 submarines and 15 river gunboats.62

  The stage seemed set for confrontation. Inside the Guomindang the Communists were again tightening their grip. The Chinese Communist Party (CCP) had grown from a tiny handful of intellectuals to a party of 60,000 activists concentrated in the big cities of central and southern China. Defying the West’s show of force, the Nationalist armies were marching relentlessly towards the coast. On 21 March NRA forces entered Shanghai. This triggered a Communist-led uprising in an attempt to turn the imminent victory of nationalism against Chiang Kai-shek in a revolutionary direction.63 Though clashes with the Western Powers were avoided in Shanghai, three days later on 24 March the NRA occupied Nanjing, triggering a wave of rioting.64 American and British warships at anchor on the Yangtze responded by shelling the city, inflicting a heavy loss of life. But with several Westerners having been killed, the British Consulate damaged and the consul-general wounded, was this enough? Britain had the military potential in Shanghai to respond with real force.

  On 11 April a threatening message was sent both to General Chiang and the Nationalist authorities in Wuhan. When the left Guomindang government in Wuhan gave an uncompromising response, the battelines seemed drawn.65 However, at that moment the power struggle between Communist, left- and right-wing factions within the Guomindang came to a head. From Moscow, the Comintern was calling for their comrades to oust General Chiang. But he had no intention of being outflanked. In March 1927 Chiang had ordered the disarmament of the Communist militia in the army divisions under his command. On the day after the protest by the Western Powers about the ‘outrages’ in Nanjing, before the powerful Shanghai trade union movement could organize resistance, Chiang delivered his decisive blow.66

  On 12 April, declaring that the Chinese revolution must liberate itself f
rom Russian tutelage, he launched a bloody anti-Communist purge in Shanghai. With the Japanese keen to support Chiang’s anti-Communist drive and the Americans refusing to condone the use of force, London backed down. The Chinese Communist Party, having integrated its organization into that of the Guomindang, was defenceless. When the left wing of the Guomindang in Wuhan turned against them as well, their position was hopeless. Of the 60,000 Chinese Communists in the spring of 1926, by the end of 1927 no more than 10,000 were still alive. In the countryside the White Terror claimed the lives of hundreds of thousands of insurgent peasants.67 What was left of the rural organization was destroyed in Mao’s ill-fated ‘autumn harvest’ uprising in Hunan in September 1927.68 A year later in July 1928, after Beijing had fallen to the regular forces of the NRA, the United States recognized Chiang’s government with its capital in Nanjing, granting it full rights to set its own tariff duties, one of the long-standing demands of Chinese nationalism.69

  For Moscow the events in China were shattering. Twice in the space of seven years – first in Poland in August 1920 and then in China in the spring of 1927 – the Soviet regime had seemed poised to achieve a stunning revolutionary breakthrough, only to suffer crushing defeat. And to Moscow’s fevered geopolitical imagination it was obvious that events in Poland and China were interconnected. The common denominator was British imperialist intrigue. Within weeks of the disaster in Shanghai, on 12 May 1927 Scotland Yard raided the offices of the Soviet trade delegation in London. Claiming to have found incriminating evidence, the Tory government severed diplomatic relations with the Soviet Union. Rumours of war took on an added urgency when on 7 June the Soviet envoy in Warsaw was assassinated by a White Russian terrorist. Was this another Sarajevo?70 With a war scare sweeping Moscow and the Communist Party torn by bitter in-fighting between Stalinist and Trotskyite factions, the sense of crisis reached a new height in October when it became clear that harvest procurement was failing. As in the civil war, the peasants were on strike. In 1920–21 Lenin had faced a similar constellation. Huge ambition for revolutionary expansion and socialist construction had crashed into a wall of violent Western opposition and the threat of famine. With NEP and peaceful coexistence, Lenin had taken one step back.

  To do so again in 1927 would be a betrayal of what had been achieved since that strategic retreat. For Stalin it would be a dangerous concession to his opponents, who were now looking for a showdown. He would not retreat. Trotsky and Zinoviev were exiled. But what did going forward mean? In 1925 it had been Trotsky and the left opposition who had urged more rapid industrialization. Now, in response to the war scare of the summer of 1927, the Politburo appropriated their agenda. By the end of the year a gigantic programme of industrialization was recast as the Five Year Plan and underpinned with a coercive programme of rural collectivization. Stalin was embarking on an utterly unprecedented programme of economic and social transformation that would in a matter of years give the Soviet state full and direct control over the mass of the peasantry.71 It was, as Trotsky put it, a ‘hazardous bureaucratic super-industrialization’ hedged with economic and political risks.72 By the early 1930s this voluntarist bid for growth at any price would unleash a hellish famine and a violent war against the peasantry, whilst putting the Soviet Union’s foreign policy on the defensive. It was no coincidence that Stalin eagerly embraced the Kellogg-Briand Pact. For the foreseeable future the construction of ‘socialism in one country’ required peace.

  IV

  If there was any power other than the Soviet Union more exposed to the strategic uncertainty in East Asia in the late 1920s, it was Japan. And there were plenty of voices in Japanese politics and the military who demanded an assertive response. Since the early 1920s the relative moderation of Japanese policy had been underpinned by a belittling depreciation of the potential of Chinese nationalism. In light of the forces mobilized by Wu Peifu in 1924 and the even greater momentum of the Northern Expedition, this came to seem dangerously complacent. Nevertheless, in the face of right-wing outrage Foreign Minister Shidehara stuck to the policy of non-aggression that had been pursued since 1921. In the spring of 1927, when both Britain and the United States confronted the Chinese Nationalists with armed force, Japan stayed its hand.73 In the Japanese Navy the sense of humiliation was so intense that one of the lieutenants involved in the evacuation of Japanese citizens from Nanjing committed hara-kiri in protest.74 Why was Japan not defending its interests? Meanwhile, whilst China was recovering its strength, Japan’s crucial foothold in Manchuria, was suffering from neglect.75 In the late 1920s the Japanese settler population of Manchuria numbered only 200,000, increasing by no more than 7,000 every year. By comparison, annual in-migration of land-hungry Chinese to Manchuria peaked in 1927 at 780,000. Barring truly decisive political action, Japanese overlordship had no future even in its designated sphere of interest.

  In April 1927, with Japan’s economy in crisis and China on the march, the liberal government that had stuck so doggedly to a policy of conciliation was brought down.76 The conservative Seiyukai Party took office headed by former chief of staff and China-hand General Tanaka, who announced his determination to take a firmer stance. By reinforcing Japan’s military position in Shandong and Manchuria, whilst courting Chiang Kai-shek, Tanaka hoped that the Chinese might eventually be persuaded to accept a de facto separation of the territory north of the Great Wall. What Tanaka did not dare to do was break with the Western Powers even when the NRA began a major offensive to the north in April 1928. Despite repeated clashes between the NRA and Japanese troops, in which thousands of Chinese were killed, Tanaka bit his tongue and officially acknowledged to Washington China’s sovereignty over Manchuria.

  For Japanese nationalist extremists this was too much.77 On 4 June 1928 radical officers within Japan’s Manchurian army assassinated the warlord Chang Tso-lin as he was fleeing Beijing ahead of the arrival of the NRA. The assassins hoped thereby to provoke a clash with the warlord’s army, thus paving the way for full Japanese annexation of Manchuria. But they were to be disappointed. Whilst the NRA occupied Beijing and completed the Nationalist unification of China, in Manchuria Chang Tso-lin was succeeded by his son Chang Hsueh-liang. The ‘Young Marshal’ avoided open confrontation with the Japanese Army but soon revealed himself to be a Chinese patriot in the new mould. In December, ignoring the Japanese, he placed the three Manchurian provinces under the sovereignty of the Nationalist government in Nanjing, which was now officially recognized by both the United States and Great Britain.

  Prime Minister Tanaka’s policy was in tatters. Unable either to confront or to accommodate the Chinese, he came to seem like a ‘Don Quixote of the East’, an old-school samurai out of time.78 When his cabinet finally collapsed in July 1929, it was replaced not by a government of Nationalist radicals, but by their chief opponents, the Constitutional People’s Government Party, or Minseito. Their agenda was reformist not confrontational. Japan must ratify Kellogg-Briand, take up the Anglo-American invitation to naval disarmament talks in London, complete the liberalization of its domestic politics, and resume the push toward the gold standard. In February 1930 these Asian counterparts to Gustav Stresemann received a resounding majority from Japan’s democratized electorate.79 Even with Stalin and Chiang Kai-shek on the march, the advocates of aggression in Asia had not yet made their case.

  26

  The Great Depression

  The Great Depression was the event that would shatter this surprisingly resilient system of international order. But this disintegrative effect was not immediately obvious. The initial impact of the downturn, like that of the recession of 1920–21, was not to blow the world apart but to tighten the constraints of the existing order. Indeed, it was a sign of how far the new norms had become entrenched that in 1929, unlike in 1920, deflation was pursued in every major country of the world. It was not just Britain and the United States that chose deflation but France, Italy and Germany. In a remarkable expression of t
heir conformity to international expectations, Japan’s newly installed liberal government took their country onto the gold standard in January 1930, backed by a large loan brokered by J. P. Morgan. The question that critics have asked ever since is why the world was so eager to commit to this collective austerity. If Keynesians and monetarist economists can agree on one thing, it is the disastrous consequences of this deflationary consensus. Were ignorant central bankers to blame, or an atavistic attachment to the memory of the gilded age?1 Or did the experience of inflation in the wake of World War I create an anti-inflationary bias even among the better-placed countries, the United States and France, which ought to have acted as counterweights to the downward pressure on Britain, Germany and Japan?2 More political interpretations suggest that deflation provided fiscal hawks with a welcome opportunity to roll back the concessions made to labour in the tumultuous aftermath of the war.3

  What all these explanations underestimate is the wider political investment in the restored international order of the 1920s. This went beyond fear of inflation, or a conservative desire to cut welfare. The gold standard was tied to visions of international cooperation that went beyond technical discussions amongst central bankers. At the real pressure points in the international system the gold standard was ‘knave proof’ not just with regard to big-spending, inflation-minded socialists. The ‘golden fetters’ also constrained the militarists. Indeed, given Washington’s veto over any tougher collective security system, an embedded market-based liberalism was the only significant guard against the resurgence of imperialism. A cyclical recession, even one that brought mass unemployment and bankruptcy, was a small price to pay to uphold an international order that was the best hope of peace as well as economic progress. It was one of the tragic ironies of the Great Depression that constructive policies of international cooperation became so tightly entangled with economic policies of austerity. The perverse consequence was that advocates of ‘positive’ economic policy found themselves gravitating toward the insurgent nationalist camp.