Chapter 26: The Japanese Soldiers Fly into a Rage

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September 1, 1938, somewhere in the French Concession of Jiangcheng

“Bastards! How could so many supplies have been stolen overnight?”

Lieutenant Colonel Akagawa Yosuke of the Investigation Department of the South Manchuria Railway Company was hopping mad. Clearly, Wang Yue’s judgment had once again been wrong. Behind the Hongmao Trading Company stood the Special Higher Police, not the Doyihara Organization. Still, that was understandable. Japanese intelligence agencies were notorious for their disorder.

“Senpai, they really are gone. The warehouse was completely destroyed by the explosion, but there isn’t a single piece of cargo left in the ruins.”

The manager of Hongmao Trading Company, Hayashi Shuichi, reported the matter with a bitter expression. His real name was Kobayashi Shuichi. An army captain, he was one of the Investigation Department’s core personnel and had long been responsible for conducting business in Jiangcheng. If war had not broken out, he would probably have forgotten that he was a soldier.

In the early hours of the morning, a massive explosion had suddenly torn through Hongmao’s warehouse. Kobayashi had rushed to the scene immediately. His opponent’s methods had been extraordinarily skillful: using the smallest possible amount of explosives, they had utterly destroyed the warehouse without damaging any nearby factories or storage facilities. Most astonishing of all, they had somehow removed more than a thousand tons of supplies from inside.

“Forget everything else. Tell me how those eight hundred tons of salt were transported away! Given the roads in the French Concession, it would have been impossible to move that much cargo in only a few hours!”

Akagawa genuinely wanted to cut the man in front of him down. Unfortunately, Kobayashi’s mother belonged to the peerage. No matter how serious a mess he made, things would never reach the final step.

“I suspect the Concession authorities were involved. No matter what method they used, transporting such a quantity would have created quite a commotion. There is no way the Concession authorities knew nothing about it.”

Kobayashi spoke with some indignation as he offered his theory.

“Then why were there so few men stationed at such a critical location?”

Akagawa was more inclined to believe that Kobayashi had conspired with the Concession authorities.

“They were all cooperating with the Special Higher Police in investigating the Umbrella Company. That was an order from Investigation Headquarters.”

Kobayashi reported the matter with a hint of grievance. It was something nobody had cared about, yet Investigation Headquarters had insisted on involving itself. How could he openly disobey? Hongmao Trading Company employed many people, but most of them were locals. He had very few truly reliable men. Once he sent them out, naturally there were fewer available to guard the warehouse.

“Clearly this was the navy’s fault, so why are we the ones suffering the greatest losses? Kobayashi, you must provide Investigation Headquarters with an ‘explanation.’ Understood?”

Akagawa offered the reminder in a solemn tone. His meaning was simple enough: he hoped Kobayashi would use his family connections to suppress the matter. Otherwise, nobody would have an easy time of it.

“Rest assured, Senpai. I know what must be done. This was the result of collusion between the Military Statistics Bureau and the Concession Patrol Bureau. Ultimately, the Expeditionary Army’s failure to seize Jiangcheng in time affected our judgment.”

Kobayashi wore an utterly serious expression, though the corners of his mouth lifted slightly. He had truly feared that Akagawa might stubbornly force him to commit ritual suicide. That would have been a real nuisance.

“Prepare the report on the Umbrella Company as quickly as possible. The navy bastards colluded with the Umbrella Company. There is no other explanation!”

Akagawa continued issuing instructions.

“Should we not take the navy’s attitude into consideration?”

Kobayashi sounded uncertain. After all, the Kwantung Army was not quite the same as the rest of the army.

“The Kwantung Army’s objective is northward expansion, while the navy’s objective is southward expansion. Our conflict is irreconcilable.”

Akagawa’s gaze was deep and somber. Everyone knew internal strife was wrong, but there was no remedy for a problem that had been allowed to fester for so long. If they retreated now, they might well be welcoming their own destruction.

“What should we do about Investigation Headquarters’ order to retaliate?” Kobayashi asked quietly.

The order had been severe: conduct a thorough investigation, recover the losses, and strike back without mercy. Even he was beginning to feel unsure.

“Do you not still have a Chinese-made eighty-three-millimeter mortar? Aim it directly at the Military Statistics Bureau and fire every shell you have. Then send men armed with light weapons to attack the residences of its officers. Do not worry about causing actual casualties, but make certain the spectacle is impressive.”

Akagawa had no idea what Investigation Headquarters was thinking. Had they forgotten that no operatives had been deployed in Jiangcheng? Let them make a mess of things. In any counterattack, the greatest losses would certainly not be his.

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“Rest assured, Senpai. I will do it properly!”

What Kobayashi was really thinking was that he would uproot the Concession Patrol Bureau as well. Anyone who dared steal from him was asking for trouble. Most of the silver ingots in the warehouse belonged to him personally, as did the minting equipment he had obtained from Manchuria. Without those things, the Kobayashi family would take years to recover. Unfortunately, he had no way to mention any of that.

Beginning at ten in the morning, the residences of senior Military Statistics Bureau officials came under attack one after another. The attackers used Sichuan-made forty-seven-millimeter mortars, firing and retreating immediately. Every round struck the roofs of its target with astonishing precision.

They were obviously professional artillerymen.

The City Defense Command reacted quickly, issuing a martial-law order after only half an hour. Yet the attacks did not stop. The routes had clearly been planned in advance. Once they had finished firing at the original targets, the attackers began striking targets inside and around the French Concession. They followed the same pattern every time: fire, then flee. The Patrol Bureau was driven frantic, but could do nothing about it.

The situation finally began to improve only after the Ministry of Military and Political Affairs issued a stern diplomatic note to the opposing embassy. Sailors disembarking from warships began gathering outside the French Concession Patrol Bureau, apparently preparing to impose martial law there as well.

But no one expected the next development.

The attackers somehow brought a mortar into position and launched a rapid barrage against the Patrol Bureau. This time, it was not the earlier forty-seven-millimeter light gun, but an eighty-three-millimeter mortar firing high-explosive shells manufactured before 1930.

The powder charges might appear identical, but ever since the people from the Ordnance Bureau had taken power, the quality of the weapons had begun to decline for inexplicable reasons. Artillery shells were especially notorious. Although the weight of the charge had not changed, the substances packed inside varied wildly. They had even begun using nitrocellulose. If black powder had not been so outrageously inadequate, they probably would have stuffed that into the shells as well.

Thirty rounds in half a minute.

The Patrol Bureau was transformed into a sea of flames. The number of dead and wounded was not yet known, but the entire building had collapsed so completely that anyone could see it. When the sailors finally located the mortar, the attackers had vanished. All that remained was a scattered heap of shell packaging.

Japanese spies had carried out an attack of such magnitude that the government leadership was naturally furious. The City Defense Command, the Pie Headquarters, the police, the Military Statistics Bureau, and the Counterintelligence Bureau—in short, nearly every coercive institution in the city—was mobilized. A massive search for Japanese spies began, and Jiangcheng erupted into chaos.

From the perspective of the higher authorities, the message was clear: Surely after all this, you people would finally calm down?

But they did not.

Just as everyone assumed the Japanese spies must have been frightened into silence, the Japanese positioned a mortar at the Temple of King Yue, near what was now known as Yellow Crane Tower. They began shelling the Military Statistics Bureau headquarters in Shouyi Park.

Once again, they fired a rapid barrage of thirty rounds.

Gendarmes stationed nearby rushed over at once to stop them, but it did no good whatsoever. By the time they arrived, the attackers had not only finished firing their ammunition but had also detonated the mortar in front of the gendarmes, completely destroying the newly built Wumu Pavilion.

Only later did they learn that the bureau chief himself had been at headquarters when the shelling began. If his guards had not dragged him into an air-raid shelter, the entire senior leadership of the Military Statistics Bureau in Jiangcheng might have been wiped out.

Yet the bureau chief was not angry. Instead, he stood staring blankly at the Military Affairs Commission opposite him and the field headquarters beside it.

Damn it, he truly wanted to curse someone. What had he done to deserve this? Of all the places they could have shelled, why the Military Statistics Bureau? How much was the bureau even worth? Why not shell the Military Affairs Commission or the field headquarters instead?

The Old Marshal was holding a meeting at the field headquarters that very day. Given how omnipresent Japanese spies were, they certainly knew that. So why had they not attacked it?

Complaining was one thing, but the work still had to be done.

The Japanese spies had no sense of honor, and there was no way to uproot them all in the short term. Since that was the case, they could only resort to the simplest method. The army was assigned the work of enforcing martial law and conducting searches, while every Military Statistics Bureau agent was sent onto the rooftops. Nearly every location suitable for artillery fire or sniping positions was occupied by agents. Where conditions permitted, snipers and machine-gun teams were also deployed, ensuring that any Japanese spy who appeared would be pinned down immediately.

As for the spy safe houses that had already been identified, there was no longer any need to cast a long line in hopes of catching a bigger fish. After everything that had happened, the authorities clearly needed to provide an explanation to those above them.

And so the Japanese spies of Jiangcheng suffered a catastrophe.

Whether they were genuine spies or Chinese collaborators sympathetic to Japan, they were all arrested. Even quite a few well-connected figures who had loudly advocated “peace” and “friendship” were taken into custody.

This time, even the consistently unconventional Executive Yuan fell silent. The reason was simple: they were angry too. Shells had been flying everywhere, and even their leader had nearly been blown to pieces. The Sichuan-made forty-seven-millimeter mortar was simply too weak. Had it been a Japanese Type 89 grenade discharger, he would certainly have been killed.

The Concession authorities also launched a large-scale purge. Even a clay figurine had a measure of temper, let alone a country that was, at least in name, the world’s foremost land power, with a navy that was by no means inferior. At the very least, its paper strength could go toe to toe with the Combined Fleet.

They did not care who fought whom or how fiercely. But openly humiliating them was going too far.

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Acting under instructions from the home government, the French authorities launched the strictest possible inspection of Japanese merchants within the Concession. Any Japanese national carrying undeclared weapons or communications equipment was sent to a military camp for detention. As for intelligence agents who had failed to declare their identities, they simply “disappeared.”

During the operation, several ronin attempted to organize resistance. The authorities responded by bringing a seaplane down from a warship and dropping a one-hundred-kilogram bomb on a small bank where the ronin had entrenched themselves. Nearly a hundred ronin and bank employees were sent skyward in an instant.

The people were dead, but the evidence remained.

The French Concession authorities had never imagined that someone had been printing the currencies of the three countries of French Indochina right under their noses. The cunning Japanese had printed only the small denominations—one-unit and five-unit notes—but the sheer volume was staggering. The one-unit notes recovered from the bank’s underground vault alone amounted to two million.

What did that mean?

The combined annual issue of one-unit notes by the banks of the three countries of French Indochina was less than one million. After all, those currencies were silver-backed and still quite valuable.

Recovering such a large quantity of counterfeit money did not mean that those were the only notes that had been printed. The banks of the three Indochinese countries had suffered numerous deficits over the years. Now that they had found a perfect scapegoat, they naturally intended to dump every shortfall onto the Japanese.

European politicians were practically dancing with joy. They had been worried about how to profit from the war, and now the opportunity had delivered itself to their doorstep.

The Élysée Palace demanded an explanation from Japan that very day. It also discreetly informed the press that the losses suffered by the banks of French Indochina exceeded three billion francs.

The franc was still relatively stable in 1938. One franc equaled 0.2908 dollars, making three billion francs worth 872.4 million dollars—only slightly less than France’s military budget.

Tokyo was bewildered.

What was this supposed to mean? Had Japan been printing counterfeit Southeast Asian currency? Why had nobody heard anything about it?

The heads of the intelligence agencies were summoned to the Imperial Palace and subjected to a furious dressing-down. Only then did the government learn that the small bank in Jiangcheng was controlled by a private organization. It had been established in Jiangcheng simply because its owners believed the location would be more convenient.

That a private organization had carried out the operation could be confirmed. But everyone knew that explanation made no sense. The printing plates, paper, and ink were almost identical. Who would believe a private organization had done it?

Japanese banknote anti-counterfeiting technology was the most advanced in the world. Even the yen could not compare.

As for bowing, kneeling, apologizing, and offering reparations—forget it. Did anyone not know what sort of people the Japanese were?

They could either pay, face comprehensive sanctions, or go to war.

After Tokyo issued its explanation, the Élysée Palace even declared that it might lift the arms embargo. It also stated that it would not interfere with the colonial governments’ external transfer of “surplus” self-defense weapons.

The major arms manufacturers of the Third Republic soon began lobbying as well, demanding that the government formally lift the arms embargo in order to safeguard French interests. Schneider even approached the Japanese directly, demanding payment of patent royalties and compensation for every infringing weapon.

If Japan refused, Schneider would not rule out exporting genuinely advanced weapons.

As for whom those weapons would be sold to, the Japanese could figure that out for themselves.

In the end, the helpless Japanese government had no choice but to say that negotiations were possible. It certainly would not pay three billion francs, but a somewhat smaller sum could be discussed. After all, Japan truly had no resources left for another major war. If paying a modest amount and surrendering a little influence could settle the matter, then it was worth considering.

The Third Republic did not actually want a war either. For one thing, even if Japan paid nothing, the enormous loss still had to be blamed on the Japanese. For another, France needed an excuse to expand its arms exports.

The country had been feverishly preparing for war in recent years, and the military budget was under severe strain. Being able to sell the obsolete junk piled up in its warehouses openly and honorably would be the best possible outcome.

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