Key Point: Shanghai was a bastion of Western capitalism, business its life blood.
In the 1930s Shanghai was in its heyday, a teeming metropolis of some 3.5 million people. The great city was a fascinating blend of cultures, its very existence refuting Rudyard Kipling’s famous aphorism. Here, on the lazily snaking banks of the Huangpu River, East and West did meet. The river was literally an artery of commerce, pumping trade into the city’s vibrant commercial heart.
China Forced To Open Trade Relations
Shanghai was a bastion of Western capitalism, business its life blood. British and American Tai-pans (heads of business firms) might attend church on Sunday, but on weekdays Mammon, not God, was Shanghai’s principal deity. The city was one of the original “Treaty Ports” opened up by the Treaty of Nanking in 1842. China had just been disastrously defeated in the so-called “Opium War” and had to bow to British demands. Largely self-sufficient, despising foreigners as “outer barbarians,” China had to be forced to establish normal diplomatic and trade relations with the outside world. The British took the lead, but the United States, France, Japan, and a host of other countries were quick to follow.
Beset by foreign encroachments from without and internal rebellion from within, China was in turmoil throughout much of the 19th and early 20th centuries. Seeking China’s trade, yet wanting to distance themselves from its social and political troubles, treaty powers established the principle of “extraterritoriality” which the Chinese naturally resented. Foreign enclaves would be set apart, largely self-governing and above all not subject to Chinese law.
Shanghai’s International Settlement and French Concession were outgrowths of these developments. Although physically connected to the Chinese-ruled greater Shanghai, the International Settlement was a largely self-governing territory administered by the Shanghai Municipal Council, which was dominated by foreign business interests, largely British, though other powers such as the United States had seats. The International Settlement had been formed by uniting the British and American enclaves in 1863. The French Concession, ruled from Paris, was a separate entity.
Bund Was Noisy Display Of Foreign Wealth
The Bund—the word is derived from an Anglo-Indian word meaning “quay” or embankment—was the International Settlement’s grand showplace, an imposing row of banks, hotels, and office buildings that stretched for a mile along a bend of the river. To the visitor, the buildings were exotic outgrowths, massive symbols of Europe and America that were somehow magically transplanted to Chinese soil. The Hong Kong and Shanghai Bank, the Yokohama Specie Bank, the exclusive Shanghai Club, and the Cathay Hotel—these were powerful institutions whose soaring domes and stately columns were outward symbols of inner wealth.
The Bund’s grand boulevard was crowded day and night, an ever-changing spectacle that revealed both the best and the worst of humanity. Gawking tourists rubbed elbows with swaggering off-duty sailors, White Russian refugees, British businessmen, and petty criminals. Rickshaw men pulled beautiful Chinese women dressed in silk qi paos, and red-turbaned Sikh policemen kept a wary eye out for trouble. And above all there was noise—autos honking, ship whistles blowing, swarming Chinese rickshaw men crying for fares—an ear-splitting cacophony of commerce.
The International Settlement and neighboring French Concession were artificial creations, safe harbors from the turbulent social and political storms that plagued China. Events were to prove this safety was more an apparition than reality. In the 1930s there were around 60,000 foreigners in the International Settlement and French Concession. They were vastly outnumbered by the million or so Chinese who also lived there.
Strong Japanese Presence In Shanghai
The Japanese also had a strong presence in Shanghai, a presence second only to the British. Japan was a modern nation whose rapid industrialization in the 19th century had amazed the world. Most Europeans and Americans looked on the Japanese as “honorary” Westerners whose accomplishments and growing military power won a grudging admiration.
But Japan’s Westernization was in some respects superficial. Beneath the modern, progressive veneer, some of the more disturbing aspects of Japanese culture still existed and threatened to break to the surface. The Bushido code, or “way of the warrior,” exalted military virtue, dedication to the emperor, and an almost fanatical contempt for death. Japan’s celebrated samurai warriors had practiced Bushido in one form or another for centuries, but in the 1920s and 1930s the world saw its modern reincarnation.
Japan’s population had grown from about 30 million in 1868 to about 65 million in 1930. Japanese farmers were hard-pressed to feed this expanding population, and some argued territorial expansion was the only solution. Of course, aggressive Japanese imperialism was an old story. In 1910 Japan had annexed Korea, beginning a nightmare of cultural suppression, economic exploitation, and political terror on the long-suffering peninsula. But Korea was Japan’s foothold on the Asian mainland, springboard to a greater prize—China.
Ancient Codes And Worldwide Depression Drove Japanese Ambitions
In the 1920s and early 1930s Japan became infected with nationalism and militarism. When combined with the samurai traditions and the Bushido code, this militarism and ultranationalism produced a particularly virulent brand of imperialism. The worldwide economic depression of the 1930s hit Japan hard, making imperial and foreign conquest seem a viable solution to the island nation’s troubles.
In 1931, the “Manchurian Incident” began a whole new round of Japanese aggression. Manchuria was the northern province of China, and Japan maintained a garrison there, Kwantung Army, to protect Japanese property and economic interests. Officers in the Kwantung Army needed a pretext to conquer Manchuria, so they created one. They blew up a portion of a Japanese-owned Manchurian railway and blamed the destruction on the Chinese. It was a transparent deception, but provided the excuse the Japanese Army needed. In due course Manchuria was invaded, weak Chinese armies routed, and a puppet state called “Manchukuo” established.
Japanese Provocation Ignites Passions In Shanghai
The Manchurian Incident sparked condemnation from around the world, particularly the United States, but most countries were more concerned with the Depression than with far-off China. Pu Yi, the last emperor of China, was duly installed as ruler of an “independent” Manchukuo, but his tinsel regime was nothing more than clumsy window dressing. Japan’s naked aggression provoked a storm of protest all over China, but nowhere was the patriotic furor greater than in Shanghai.
Chinese demonstrators crowded the streets, angrily shouting anti-Japanese slogans, and posters were tacked up that denounced Japanese imperialism or simply urged Chinese citizens to “Kill All Japanese.” Soon talk was transformed into action, and the city’s Chinese business community organized an effective boycott of all Japanese goods. All Japanese products, even innocuous toys and bicycles, disappeared from Chinese store shelves. Goods piled up in Japanese warehouses because no Chinese businessman would accept Japanese products.
Boycotted Japanese Goods Pile Up On Shanghai Piers
The Japanese were an important part of the International Settlement’s foreign community. A small waterway called Soochow (now Suzhou) Creek meandered through Shanghai, a watery finger that formed a boundary between the International Settlement and the Chinese-controlled Greater Shanghai before turning sharply and dividing the settlement itself into two distinct halves. Soochow Creek was spanned by the Garden Bridge (now Waibaidu Bridge) near where it emptied into the Huangpu River.
A traveler crossing the Garden Bridge from the Bund would find himself in the International Settlement’s Hongkew District. Hongkew was the Japanese section of the settlement, boasting a population of 30,000 Japanese residents. Numerous shops, bars, and even Geisha houses gave the area its local name of “Little Tokyo.” Hongkew was a natural target for Chinese patriotism. Normally, Japanese imports comprised 29 percent of Shanghai’s yearly total. Once the boycott took effect, that figure plummeted to 3 percent. Seven hundred tons of unsold Japanese goods gathered dust on Hongkew’s piers and godowns (local term for warehouses).
Japanese shops in Hongkew were forced to close, and Japanese residents boarded ships to return to the Home Islands. They had little alternative. Chinese merchants would not even sell them food. These events played into the hands of the Japanese military, which was encouraged by the relative ease of its Manchurian conquest.
Unpaid Chinese Troops Pose Greater Threat Than Japanese
Chapei was a Shanghai district to the north of Hongkew, just beyond the boundary of the International Settlement. It was a heavily industrialized area and home to thousands of impoverished Chinese workers. Streets were lined with dingy, red-brick buildings and grimy factories. The Commercial Press, a Chinese-owned publishing house in Chapei, was a huge concern that supplied three out of every four school textbooks in China.
The situation was becoming more and more volatile, and tensions were not eased when the 31,000-man Chinese Nineteenth Route Army under the command of General Cai Tingkai arrived. The majority of these troops were southerners, Cantonese speakers from Guangdong, and only nominally under the control of Chiang Kai-shek’s national government. General Cai paid lip service to the national government, but few doubted who was really in command.
The Nineteenth Route Army had not been paid in some time, which sent shivers of fear coursing down the backs of many foreigners residing in the settlement. General Cai might turn warlord and replenish his coffers by sacking the International Settlement. Ironically, the Chinese, not the Japanese, were considered the greater threat by the Western powers at this stage. To defuse the situation, funds were to be raised to pay the soldiers.