10. The Lonely Island
The battle in Shanghai ended at the end of October because the main force of the Japanese army landed in Hangchow Bay and bypassed the Chinese army to attack from the rear. Chiang Kai-shek ordered the troops to retreat, but due to the chaos in communication and command, the Chinese army retreated all the way and did not use the defensive fortifications built with huge investment between Shanghai and Nanking to delay the Japanese army as originally planned. As a result, the Japanese army soon came to the gates of Nanking.
Nanking was the capital of the Nationalist government. The original plan was to hold it for a month, but the defending general, Tang Shengzhi, disobeyed orders and withdrew early, causing even greater chaos. Refugees and the rout army scrambled to find boats on the Yangtze River to escape, resulting in countless deaths from trampling and drowning. The boats used by the M.C.S. School to evacuate were also sunk by the swarms of refugees rushing to board. Ouyang Ge swam ashore and escaped, but his chief of staff, Colonel Xu Shidan, drowned. Soon after the Japanese army occupied Nanking, news of the massacre gradually reached Shanghai, but the concession authorities treated the war as something distant and paid little attention.
Chiang Kai-shek's Nationalist government began its gradual retreat from Nanking to Chungking inland in mid-November 1937. The British Embassy in China, which had closed after the Japanese occupation, reopened in Chungking in April 1938. Due to the disruption of transportation caused by the war, communication between the Consulate General in Shanghai and the Chungking Embassy was difficult, requiring some workarounds. At the time, the embassies of the United States and Germany also moved to Chungking with the Nationalist government. However, in late 1941, due to the establishment of diplomatic relations between the Wang Kingwei regime and Germany, Germany closed its Chungking embassy and returned to Nanking to reopen.
 
(Figure 4-10-2) The large-scale "218 Air Battle" broke out between China and Japan in Wuhan. (Figure 4-10-3) The "419 Air Battle" between China and Japan in Wuhan, Chinese Air Force pilot Chen Huaimin crashed his plane into a Japanese aircraft.
Although both sides suffered heavy losses in these two air battles, Japan's overall national strength was superior to China's, allowing it to sustain the fighting, while China could not. In June 1938, the Japanese army finally reached the outskirts of Wuhan, triggering the Battle of Wuhan. By the end of October, Wuhan had fallen to the Japanese, and the Chinese army retreated to Sichuan, relying on its natural defenses to resist the Japanese, leading to a prolonged stalemate.
(Figure 4-10-4) Minsheng Company's ships rushed supplies from Yichang into Sichuan. When they went upstream through the Three Gorges, there were people pulling the boats on both banks.
During the Battle of Wuhan, many factories and supplies evacuated from the coast and destined for Sichuan piled up on the banks of the Yangtze River near Yichang, upstream from Wuhan. Due to the treacherous Three Gorges and the limited capacity of Chinese ships, coupled with the imminent arrival of the Japanese army, these vital assets, crucial to China's ability to continue the war, could not fall into Japanese hands. At this critical juncture, a brilliant strategist emerged: Lu Zuofu, the owner of the Minsheng Shipping Company. Having previously operated small steamships in Sichuan and possessing extensive knowledge of the Three Gorges' navigation, he changed the original practice of a single ship sailing directly to Chungking. Instead, he divided the route into several sections based on water depth, dispatching ships of varying displacements to shuttle and connect, saving time for the larger ships' return journey. Furthermore, by gradually retreating, they maintained a distance from the Japanese army. Through this arrangement, most of the supplies were successfully transported. Lu Zuofu's contributions were indispensable to the Chungking government's ability to sustain the war for eight years, and he was later appointed Vice Minister of Transportation, in charge of shipping.
I documented these events because intelligence on the navy, air force, and shipping all fell within my scope of work. This led me to visit Lu Zuofu in Chungking to learn about the history of the emergency transport of supplies, which I found to be no less significant than the British Dunkirk evacuation in May 1940. After the war, I also assisted him in procuring ships for surplus wartime supplies from Britain, making Minsheng Shipping Company the largest private shipping company in China at the time. Unfortunately, in 1949, he chose to remain on the mainland rather than follow Chiang Kai-shek to Taiwan, and was forced to commit suicide by the new regime.
(Figure 4-10-5) The Bund pier was crowded with Westerners preparing to board a shuttle boat to board an ocean liner and leave Shanghai.
By the end of 1941, with the full-scale outbreak of World War II, the Japanese army entered the International Settlement. British and American citizens who had not left were sent to concentration camps, where they endured more than three and a half years of inhumane treatment. Interestingly, when France and Italy surrendered to the Allies in 1944, and Germany in 1945, officials, soldiers, and civilians from these former Axis allies also became prisoners and entered concentration camps. In the end, only Japan remained to fight against the rest of the world.
In 1943, while the war was still ongoing, Britain, the United States, and other countries took the initiative to announce the abolition of unequal treaties that had been in effect for a century, including relinquishing inland waterway navigation rights and all concession privileges in China, in order to curry favor with Chiang Kai-shek's government, which was fighting alongside them. However, this was actually like the Chinese saying "borrowing flowers to present to Buddha," a mere empty promise; because at that time all concessions were still under Japanese control, this statement did not change any reality and was purely a political symbol.
After the war ended in 1945, Westerners returned to Shanghai. Although there was no formal concession, the United States had effectively replaced Britain as the new colonizer in Shanghai, and the banks of the Huangpu River were filled with US Navy warships. If the Communists had not liberated Shanghai in May 1949, this situation would probably have continued for decades, just like the US military in Japan or South Korea!
During the isolated period in Shanghai, many Westerners and wealthy Chinese businessmen, pessimistic about the future, gradually withdrew. Hong Kong was the choice for most, while those with more means went as far as Singapore or even Australia. People left Shanghai's docks every day. By 1939, with the full-scale outbreak of war in Europe, Westerners in Shanghai returned home to fight, and warships gradually withdrew. Britain and the United States each left only one river gunboat as a symbolic presence; the "HMS Peterel" was one of those left behind.
However, only a minority were able to escape. Most people remained in Shanghai, partly because they lacked the means to do so and partly because they were reluctant to give up their assets. Although no one knew how long the protective umbrella of the concession would last, they could only live one day at a time.
After Shanghai became an isolated island, many things changed, most notably Japan replacing Britain as the dominant power in China for over a century. The so-called "quasi-concession" issue is one example. In the early years, the concession authorities, taking advantage of the incompetence of the Chinese government, gradually created a de facto concession by constructing roads beyond the designated boundaries near Jing'an Temple in western Shanghai. For many years, it was generally accepted as part of the International Settlement. However, after the Japanese army occupied the Chinese-controlled area and surrounded the concession in 1938, the Japanese authorities used this as a pretext to demand equal status in the "quasi-concession," namely, stationing troops and police and participating in its governance; otherwise, they would deny its concession status and occupy it in the same manner as the Chinese-controlled area.
(Figure 4-10-6) In front of the headquarters of the secret service of the Wang Jingwei regime at No. 76, Jisifeier Road.
Since the situation was now beyond their control, the British-led Shanghai Municipal Council had no leverage to refuse. As a result, the Japanese military police and police stations began to move in. Then, the Japanese-backed puppet regime's intelligence agencies, such as the infamous "76 Rue de Jisifeier" intelligence headquarters, were also established there. These intelligence units brought in drug traffickers and prostitutes as their wings, turning what was originally a high-class downtown area into a chaotic mess.
The Japanese not only used Chinese gangsters to disrupt the concessions, but also the long-oppressed White Russians formed gangs and, with the support of Japanese intelligence, caused trouble everywhere. The police dared not even interfere with these people. Many uniformed police officers and even senior British police officers were threatened with assassination by the gangsters. Shanghai did not have MI5, so the Municipal Council had to ask us for help, but we were also in a precarious situation. As a result, the security of the International Settlement gradually spiraled out of control.
Moreover, as this area was the most prestigious district in Shanghai, home to the most luxurious residences and designer shops, high-ranking officials of the puppet regime established their residences here after the regime moved to Nanking. This attracted "Chungking-aligned individuals" to carry out assassinations in the area. Japanese military police and puppet regime agents responded with brutal retaliation, completely disregarding the fact that this area was nominally under the jurisdiction of the International Settlement police. Later, the Municipal Council simply retreated to the original concession border and set up another checkpoint, which was tantamount to tacitly declaring the area where roads were built beyond the concession's boundaries as uncivilized territory. Later generations did not understand why Japanese forces had already entered the International Settlement before World War II, but the reason actually stemmed from the "quasi-concession" created by the road construction beyond the concession's boundaries.
After discussing with my superiors, I decided that, based on maintaining a future cooperative relationship, I could privately provide him with some minor intelligence to meet Chiang Kai-shek's needs. This was the beginning of Sino-British intelligence cooperation, but unfortunately, it was later interrupted due to various subjective and objective factors. Before the outbreak of war, Tai Li had considered cooperating with British intelligence, so he was very interested in maintaining relations with us. At that time, the United States was not as powerful as it was after the war, and experts generally did not trust the capabilities of American intelligence personnel, even considering them to be big mouths who dared not share important intelligence with them. Therefore, the United States' international intelligence standing was not high before the war. Britain, on the other hand, had a long history and tradition, especially our naval intelligence group, which was renowned internationally. Tai Li's choice to cooperate with us was a natural and inevitable result under the circumstances at the time. However, not wanting to offend the Japanese, the British government was very conservative about cooperating with Chungking. Therefore, they also approached Americans, as Americans could participate in foreign wars in their personal capacity, something unthinkable for British intelligence personnel. They chose Herbert O. Yardley, a veteran in our field, who had been the US military's head of this department during World War I. The Nationalist government hired him in Chungking in 1938 with a hefty sum to oversee codebreaking. He later wrote a book called "The Chinese Black Chamber," which is less a memoir of his work in China and more a vulgar and absurd novel. I think he made absolutely no contribution to the Chinese government in terms of codebreaking, because his method of solving riddles was outdated and difficult to crack encryption modes based on cipher machines. He was also unable to handle the large amount of intelligence that needed to be deciphered in real time every day. In other words, he couldn't keep up with the fast pace of World War II. So he was basically neglecting his duties in Chungking. He even went so far as to personally hunt down Japanese spies, which was really unprofessional. When I arrived in Chungking in the spring of 1942, he had already left China and returned to the United States. However, I heard many stories about his experiences in Chungking from Chinese people who had worked with him, which greatly disappointed me, as he had been my idol. I believe that Yattles's work was ineffective not only because his technology couldn't keep up with the times, but more importantly because he was never able to integrate into Chinese society. He only associated with Westerners, lived a Western-style life, and viewed the Chinese with the arrogant eyes of a Westerner. He neither went deep into the lives of ordinary people nor got along well with the upper-level bureaucrats. This political incompatibility and disharmony among the people doomed him to be unable to carry out sensitive work like intelligence in China. In this respect, he was far inferior to me. Even after his unpleasant encounter with Yattles, Tai Li still wanted to cooperate with the British Naval Intelligence Group. One reason for this was Tai Li's personal interest in the navy, despite his complete ignorance of ships. He once told me that if he had the chance to do it all over again, he would rather study naval affairs than do this universally disliked inquisitive job. Even after the cooperation with the British Naval Intelligence Group ended, he chose to cooperate with the US Navy instead of the Office of Strategic Services (OSS), which greatly displeased the OSS, who considered themselves the legitimate authority, and even incurred their wrath against Milton Miles. Furthermore, to my knowledge, Tai Li almost became the Commander-in-Chief of the Chinese Navy after the war; had he not died in a plane crash in 1946, Kui Yungching would never have had a chance. One of the key tasks of my intelligence group in Shanghai was deciphering the Japanese Navy's radio communications codes. After the war in Europe, Japan imported and improved upon cipher machines from Germany. The first generation was called the "Type A" cipher machine, which the United States designated "Red." It was deciphered by the U.S. Army Signals Intelligence Service in 1936. However, by the end of March 1939, the second-generation "Type B" cipher machine appeared. This cipher machine, which the U.S. military designated "Purple," was extremely complex, with a double-conversion structure. Decoding it out of thin air was almost impossible unless a large number of reference samples were available. But this was practically impossible. Where would you continuously obtain a large amount of Japanese military intelligence for reference? "Since we can't get intelligence on the enemy, why don't we just manufacture it ourselves!"
(Figure 4-10-7) Paul Draken and Yankee discuss the design and manufacture of the "Deep Purple" cipher machine.
In 1933, I met with Kenji Doihara in Manchuria and we agreed to exchange intelligence. However, this was a pretense; our real purpose was to obtain code samples for comparison. Because we already knew the contents, we were able to reverse-engineer the coding principles from their coded telegrams sent to Tokyo. Over the years, we had mastered almost all of it. In 1940, in order to obtain material aid from the United States, we exchanged some of our decryption results with the US. Therefore, you may now see some declassified documents from the US State Department claiming that the US Army Signal Intelligence Service successfully deciphered the "Purple" code on September 25, 1940; in fact, that was our achievement.
Deciphering a code is one thing, but being able to decipher it in time is another. Otherwise, with the speed of manual decoding, by the time it is deciphered, the event has already occurred. In Shanghai, based on the old-fashioned cipher machine I saw in London in 1930, and combined with our imagination of "purple," I asked Yang, a radio technician in our group, to design and build our own "purple" machine, which we called "Dark Purple."
Yang graduated from the Shanghai Sanji Telecommunication School and was responsible for assisting the communications officer in maintaining the radio equipment within the group, we all call him "Yankee". Yankee was an extremely talented person. Instead of using the complex mechanical structure of the German cipher machine, he replaced it with a large number of circuits, which was the only way to perform complex calculations at high speed. The principle of its operation was completely beyond my understanding at the time, but looking back decades later, it is surprisingly similar to the principle of modern computers.
When "Dark Purple" was finished, I patted him on the shoulder and said, "Well done, Yankee!"
Yankee whispered to me, "To be honest, Lieutenant Draken, the idea for that crucial storage core inside wasn't mine; it came from one of my neighbors."
"What?" I exclaimed in surprise. "How could such a confidential matter be..."
"I'm sorry, I was really racking my brains and couldn't figure it out at all before I went to discuss it with him," Yankee said. "But don't worry, I didn't tell him what it's for!"
"That's true, but..." I said, "How about this, tell me who he is and then we'll see what happens!"
I took out my notebook and wrote down this personal information that I still remember vividly to this day: "Wang An, Teaching Assistant, Department of Electrical Engineering, Shanghai Chiao Tung University..."
"Deep Purple" can be decoded automatically and quickly, making decryption work practical. So now you know why the US obtained the "Purple" code but couldn't decipher it in time to warn the Hawaiian naval fleet commander, causing the major losses of the Pearl Harbor attack—the key is that we kept a trump card and didn't hand over "Deep Purple" to them!
However, the Chinese stole the secret of "Deep Purple" from us. Dr. Wen Yuking, the director of the Telegraph Department of Chiang Kai-shek's Ministry of Transportation, was in charge of the Military Commission's Technical Research Office, a code-breaking agency. He bribed Yangkee with a large sum of money to obtain all our research results. One of Dr. Wen's subordinates was a very capable student named Chi Buzhou who had studied in Japan. He used these technologies to decipher many codes of the Japanese Ministry of Foreign Affairs, the most famous of which was the intelligence on the Japanese attack on Pearl Harbor. I will mention this story later. Here, I would like to first mention what happened in the Military Commission's Technical Research Office and its connection to me.
The Military Commission's Technical Research Office was a unit Tai Li had long coveted. He placed his confidant, Wei Taming, there, intending for the Military Intelligence Bureau to dominate China's cryptography business, thus creating conflict with Wen Yuking. Dai Li was unaware of the origins of "Deep Purple," but discovered that Dr. Wen had close ties with the British. Therefore, he deliberately spread rumors that Dr. Wen was colluding with British intelligence to sell the secrets of "Deep Purple" to Britain. In fact, Tai Li's statement was the exact opposite of the truth. However, unable to bear the harassment from the secret agents, Wen Yuking left Chungking for Hong Kong in June 1940 under the pretext of seeking medical treatment.
(Figure 4-10-8) Tai Li was arrested and detained by the Hong Kong police. Paul Draken came to bail him out, but Tai Li refused to leave and protested to him.
At that time, many important officials of the Nationalist government used the excuse of seeking medical treatment to go to Hong Kong and then secretly went to Shanghai and Nanking to join the puppet regime. For example, Wang Kingwei, the vice president of the Kuomintang and the executive president of the Nationalist government, was one such person. Therefore, as soon as Wen Yuking left Chungking, Tai Li immediately announced that he intended to betray the government and that he would personally go to Hong Kong to arrest him. However, Wen Yuking's accomplices deliberately leaked the information to the Hong Kong police. The police stationed at the Hong Kong airport did not know who Tai Li was. They only knew that a person was carrying a pistol and boarded the plane but refused to surrender it. So they arrested him and imprisoned him in the Kowloon Police Detention Center.
Tai Li, the head of the secret service, had imprisoned countless people throughout his life, never imagining he would become a prisoner of the Hong Kong police. He was furious, and to make matters worse, he blamed me, believing I had colluded with Wen Yuking. He also knew I came to Hong Kong every month from Shanghai to chair the coordination meeting of the cryptography working group, and assumed I was deliberately targeting him behind the scenes. I was indeed in Hong Kong at the time, and upon hearing the news, I was shocked and rushed to try and bail him out. However, Tai Li refused, insisting that Chungking coordinate through diplomatic channels before he would leave in what he called a "glorious manner." He later claimed that the Hong Kong government was under pressure from the Japanese military to deliberately embarrass him, but that was not the case at all.
Tai Li's experience of being imprisoned in Hong Kong made him deeply resentful of British intelligence. Just then, the Americans arrived, and the two sides hit it off immediately, eventually establishing the "Sino-American Cooperative Organization." The relationship I had painstakingly built before the war vanished because of this inexplicable misunderstanding. Otherwise, I would have had the opportunity to make a name for myself in China's intelligence community. This is why I left the intelligence community and turned to the air force in the later stages of the war.
In late 1941, almost simultaneously with the Chinese, we cracked Japan's plan to attack Pearl Harbor, and I immediately sent the intelligence to headquarters in Hong Kong. At that time, we had already installed the "Deep Purple" on the "HMS Peterel", and the Japanese, through radio direction detection, also knew that this gunboat anchored on the Whampoo River was problematic. On the morning of December 8th, a Japanese naval lieutenant commander boarded the "HMS Peterel" to take over. The on-duty radio operator immediately triggered the self-destruct device according to the original plan. Seeing this, the surrounding Japanese ships opened fire, and the "HMS Peterel" along with the "Deep Purple," quickly sank into the Whampoo River. It's a pity that the world's first computer met such an end.
I believe our intelligence must have reached Prime Minister Churchill, but whether he told President Roosevelt is unknown. After the Chinese deciphered it, Chiang Kai-shek immediately informed the US government through his military attaché in the US, but none of this intelligence could avert the catastrophe at Pearl Harbor. The reason for this remains a mystery to this day.
One day, I was ordered to assist the consulate in dealing with the recent large influx of Jewish refugees from Europe to China. They came to Shanghai to seek refuge because of the increasingly intense anti-Semitic actions in Germany. Although the Shanghai International Settlement was one of the few places in the world that could accept them because no visa was required, security checks were still necessary. Because there were too many people coming in at once, we, who were no longer handling visa business, were temporarily transferred back to help. While examining my documents, I suddenly realized I did look somewhat like them. I had experienced this before when I met Hitler in 1934, probably because my mother was of Central Asian descent. In any case, this gave me an idea. Since it's very difficult for the Japanese to trace the original identities of these refugees, if I issue myself a Jewish refugee certificate now, it shouldn't be easy to be discovered in the future. Of course, I never imagined that I would almost be "exterminated" because of this identity in the later stages of the war. Germany sent Nazi officers to Shanghai to demand that the Japanese authorities carry out the same extermination of Jews as Germany. The Japanese went along with the Nazis' demands, and the extermination was never carried out until the end of the war in 1945. As a result, tens of thousands of Jews stranded in Shanghai escaped the massacre. Although I had prepared my Jewish refugee identity certificate, I never used it for various reasons.
(Figure 4-10-9) The Italian cruise ship "SS Conte Verde" carried Jewish refugees from Europe to Shanghai.
Shanghai already had a large Jewish population, including synagogues. Some of these Jews held British passports but were actually from the Middle East and were very wealthy. Two of the richest Westerners in Shanghai, Silas Aaron Hardoon and Victor Sassoon, had such backgrounds. When Germany began its anti-Semitism, many Jewish refugees fled from Europe to Shanghai, mostly aboard the Italian luxury liner "SS Conte Verde". This liner had close ties to Shanghai, which will be mentioned later.
There was a reason why Shanghai accepted Jewish refugees: after Japan occupied Shanghai and Nanking, the Nationalist government had retreated to the inland and was unable to issue visas to Jewish refugees. The concession authorities also did not have this authority, so they simply allowed them to enter without visas, making Shanghai the most attractive refuge for European Jews.
Although Japan and Germany were Axis allies, their attitudes toward Jews differed drastically. Japan had no historical ties with Jews and little motivation for anti-Semitism; instead, it sought to utilize Jewish funds and technology, leading to the "Fugu Keikaku" project. Originally, Jews were concentrated in Manchuria, having fled Russia after the 1917 revolution. Later, due to various events, they migrated en masse to Shanghai in 1933. Consequently, European refugees also flocked to Shanghai, reaching a peak of over 20,000, mostly concentrating in Hongkou District.
(Figure 4-10-10) British troops set up checkpoints at Waibaidu Bridge to prevent large numbers of refugees from entering the concession.
Similar to previous situations, war in the Shanghai International Settlement during the isolated island period inevitably led to a massive influx of refugees, making housing a major problem. Many residences were divided into small rooms crammed with several families, and even stairwells were used for living. However, due to the large population and booming consumption, the market was actually quite prosperous, creating a stark contrast with the desolation outside the Settlement. Nevertheless, the Japanese, who occupied the area surrounding Shanghai, frequently used various methods to restrict the entry of essential goods into the isolated island in order to pressure the Settlement authorities into compliance on certain issues. This caused prices to soar, making life increasingly difficult for ordinary people.
In fact, there were many wealthy Chinese who fled into the concessions. My friend Shao Sinmay, for example, fled into the concessions with his American mistress Emily Hahn and their publishing house's belongings. Although their living space became much smaller, their lifestyle remained just as extravagant. This was a reflection of the isolated period in the Shanghai concessions, a kind of decadent and morbid state, but also as dazzling as the sunset. Of all the years I spent in China, this period was the most unforgettable.
In late 1938, a friend of Annie's father who ran a textile factory in China temporarily left Shanghai to escape the war. He believed he would return after the war, so he did not sell the property, leaving behind a beautiful Western-style house, all the furniture, and an Austin car. He asked Annie's father to find a reliable person in Shanghai to keep it safe, and I was the obvious choice.
This house, which looks like a European fairytale castle, is located in Hongchiao, a western suburb of Shanghai. The main building has two floors, a sloping roof covered with copper tiles, and more than a dozen rooms. There is also a round glass house facing the courtyard with a grand piano inside. There is a swimming pool behind the house, and it is surrounded by a large lawn, walls and trees.
When I moved into this house from my rented apartment, I thought it was great—I could enjoy such a nice environment without paying rent. However, a few months later, I realized something was wrong. I had overlooked the fact that I had to pay the housekeeper and gardener's salaries every month. Fortunately, due to the war, many Chinese people from other places were flocking to the concession, and they were content with just having a place to stay, which led to a drop in overall wages. Also, I had dismissed the driver and was driving myself, so I was managing to get by. But living alone in such a large house for a long time made me feel lonely. My colleagues in the intelligence group originally wanted to use this house to hold a party for Christmas 1938, but the higher-ups had explicitly forbidden any event where the entire group was present at the same time, so we had to give up. However, during this period, I spent an average of one-third of my time in Hong Kong, and for the remaining time in Shanghai, I had to spend several nights on the river gunboat "HMS Peterel", so I didn't actually have much time to spend in this house.
(Figure 4-10-11) Paul Draken and Emily Hahn in the villa's ballroom.
Shao Sinmay did bring Emily Hahn here to see me once, trying to move his publishing house here, but I declined, saying I wasn't the owner and had no right to agree. This villa has a magnificent ballroom with a gramophone and many records. Afterwards, Emily Hahn came to dance with me alone several times. We danced together in the ballroom, Emily pressing her sexy body close to me, making me feel restless. That evening, she offered to stay the night, but because of her complicated social connections in Shanghai, and the possibility that I might have to go underground in the future, I quickly sent her away for safety reasons.
Because I went to Chungking, the rear area, at the end of the war, I was unable to continue to preserve this house. In 1945, the Japanese were defeated and surrendered, and the original owner returned to Shanghai to continue his business. He spent a lot of money and used many connections to drive away a Kuomintang general who was occupying the house. Four years later, Shanghai was liberated, and they left again, but this time they never came back.
I also received a Supermarine S6 seaplane, owned by a wealthy Shanghai businessman who loved flying. He gifted me the plane, along with a hangar on the Whampoo River, as a gesture of goodwill when he left Shanghai. It was my dream racing plane, capable of speeds up to 350 miles per hour, and a perennial winner in the Schnieder Trophy seaplane racing competition. However, during Shanghai's isolationist period, I rarely had the opportunity to fly it, unless I wasn't afraid of being shot down by the reckless and aggressive Japanese military pilots!
However, I still flew it over Hong Kong once. I needed an extra escape route in case something happened in Shanghai, so I had to do a test flight first to scout out the supply points and alternate airports along the way. Unexpectedly, it came in handy later. I once thought of painting it yellow and naming it "China Pearl 2" in memory of Annie, but I didn't have time to do so.
(Figure 4-10-12) Paul Draken was gifted a Supermarine S6 class seaplane, which was his dream.
Stephen had limited time to consider me. Although the Kennedy family was mainly on the East Coast, he still arranged for us to meet in San Francisco. He also thoughtfully bought me a round-trip ticket from Hong Kong to San Francisco on Pan Am's "China Clipper," which cost $950 one way—something I absolutely couldn't afford on my own.
(Figure 4-10-13) Paul Draken boarded the Martin M-130 "China Clipper" seaplane in Hong Kong and flew across the Pacific Ocean to San Francisco, USA.
The "China Clipper" was a trans-Pacific luxury airliner first launched by Pan Am in October 1936. It used a Martin M-130 seaplane and operated once a week from Hong Kong via Macau, Guam, Wake Island, Midway Island, Honolulu to San Francisco, a journey that took five days.
The Martin M-130 was the world's largest passenger plane at the time, with an all-metal structure and four powerful propeller engines, achieving a top speed of 130 miles per hour. The cabin was spacious, bright, and luxuriously decorated, accommodating 36 seats or 18 berths, and featuring a restaurant and entertainment area, much like a luxury cruise ship. This reminds me of Annie's "China Pearl" . How wonderful it would be to own a private aircraft like that! But I heard it cost $430,000, an astronomical figure. Perhaps due to the high cost, only three were ever built, and with such a small passenger capacity, the average ticket price was naturally high.
Because of the fame of my and Anine's round-the-world trip on the "China Pearl" years ago, the captain knew I was on this flight and came to pay his respects. He even invited me to sit in the co-pilot's seat for a flight experience. The plane landed in San Francisco Bay, very close to the spot where the "China Pearl" took off.
Stephen greeted me at the pier, and when we embraced, he couldn't help but shed tears. He had long considered me his son-in-law, even after Annie passed away. We drove into the city, and Stephen said that someone in his family in San Francisco was hosting a dinner that day to show hospitality; he said it was his cousin.
When I arrived at the restaurant, I saw a middle-aged man with glasses who looked refined but had a cunning air about him come forward to greet me: "Hello, Mr. Draken, I am Joseph Kennedy, Chairman of the U.S. Maritime Commission, currently working in San Francisco."
During dinner, Joseph asked me about a tricky case he had been handling recently: the Chinese Air Force's accidental bombing of the "SS President Hoover" in Shanghai.
(Figure 4-10-14) Chinese Air Force aircraft mistakenly bombed the "SS President Hoover" in Shanghai.
The owner of the "SS President Hoover" was the Dollar steamship Co., whose boss, Robert Dollar, made his fortune in China and had excellent political and business connections. After World War I, he decided to enter the luxury cruise ship industry, and through loans and acquisitions, he built the world's most luxurious cruise ship fleet, with ships named after US presidents. In August 1937, with the fighting in Shanghai escalating, the "SS President Hoover", carrying US Marines from Manila, sailed to Shanghai to reinforce the defense of the foreign concessions, with plans to evacuate its citizens on its return journey. On the afternoon of the 30th, while the ship was waiting for quarantine at the Wusongkou port, it was mistaken by Chinese Air Force bombers for a Japanese transport ship and bombed, resulting in injuries to seven people, including a Canadian sailor who died the following day. Joseph took out a piece of paper and said, "Look, the Dollar steamship Co. is seeking US$1,564,086.92 in compensation from the Chinese government. The largest item is US$1,178,989.08 for 'impact on future profit opportunities.' This does not include compensation for the dead and injured passengers and crew."
(Figure 4-10-15) The "SS President Hoover" was mistakenly bombed in Shanghai and sailed back to San Francisco for repairs.
This incident was also related to the accidental bombing. After the "SS President Hoover" was bombed, it sailed back to San Francisco for repairs. At the time, a major seafarers' strike was underway, and the captain couldn't find enough sailors, so he had to hire unemployed people from the dockside to fill in. This laid the groundwork for the ship's later sinking. A more direct connection was that the captain, fearing another accidental bombing, dared not take the traditional Taiwan Strait route and instead took the less familiar route along the east coast of Taiwan. Unfortunately, the Japanese authorities had turned off all navigation lights along the coast because of the fighting in Shanghai, and with Manila calling to urge them on, the "SS President Hoover" struck the coastal rocks of Hoishoto Island (today's Green Island) in the middle of the night.
(Figure 4-10-16) The "SS President Hoover" ran aground on Hoishoto Island.
The Taiwan Governor-General's Office only learned of the incident the following day after being informed by the American Consulate. They immediately dispatched ships to the scene, but most Japanese warships were in the north. The distance from Keelung to Hoishoto Island was not much shorter than from Manila, and with a day already lost, the Governor-General's Office was in a state of panic. They had no choice but to order the Navy to launch a seaplane from the light cruiser "Tama" to fly over the "SS President Hoover" and drop a communication tube, announcing: "The Imperial Cruiser is about to arrive!"
(Figure 4-10-17) The Japanese heavy cruiser "Ashigara" sent an officer to board the US destroyer in a small boat and authorized it to enter Japanese territorial waters.
(Figure 4-10-18) The US destroyer received a telegram about the "USS Panna incident" and loaded its main guns in preparation for a possible battle.
Just as the US and Japanese navies were interacting in accordance with international law and diplomatic protocol, a telegram arrived to the US destroyer reporting that at the same time, the "USS Pannae", a US Navy river gunboat, had been sunk by dozens of Japanese aircraft near Nanking, resulting in three deaths and more than ten serious injuries. The situation immediately escalated, and the US destroyer promptly loaded its main gun turrets with ammunition, preparing for any eventuality. If war fight broken out, World War II would have erupted four years earlier. Fortunately, both sides exercised restraint, and no conflict occurred.
Joseph knew nothing about these matters; of course, the telegram wouldn't have been so detailed. Then he showed me a telegram titled "Crew Mutiny" and asked if I knew what it was about. Apparently, after the "SS President Hoover" ran aground, the passengers were taken ashore and cared for by local families, but then the crew began hoarding supplies, drinking heavily, and harassing female passengers. These disorderly crew members were unemployed vagrants hired at the San Francisco docks. This was something Joseph, as chairman of the Maritime Commission, had to handle.
The telegram complained that Japanese police confiscated the revolvers of the ship's officers when they went ashore, making it impossible to maintain order. However, this was because Japanese law prohibited civilians from owning firearms, and Americans, without guns, didn't know how to maintain order. But when the destroyer arrived, armed soldiers were sent aboard at the captain's request to control the mailboxes and prevent crew looting, and the Japanese police did not interfere. In fact, the deck of the ship was floating American territory, which the Japanese had no jurisdiction over, but once they landed on Hoishoto Island, they entered Japanese territory and naturally had to abide by Japanese law. It seems the Japanese have a much higher level of legal awareness than the Americans.
You ask me how I know so much? It's not that I was on the scene all the time, but that we were listening to the telegrams of all the ships at sea, so we were able to detect anything unusual immediately. In particular, when I heard about the "USS Panay Incident" in Nanking, I was so scared that I couldn't sleep for several days in a row when I thought about the ten 8-inch guns and six torpedo tubes facing each other a few hundred meters away on Hoishoto Island off the east coast of Taiwan, and the possibility of an accidental clash.
Returning to the issue of compensation, I asked Joseph, "If the ship is total lost, does the claim for the so-called 'impact on future profit opportunities' of $1,178,989.08 still exist?"
Joseph was stunned; he hadn't expected this at all. Later, the "SS President Hoover" was indeed completely destroyed, and its on-site dismantling was contracted out for 500,000 yen. Huang Chao-chin, the Republic of China's Consul General in San Francisco, who was in charge of the negotiations, also raised the same point I had raised in rebuttal. In the end, the Chinese government only compensated for repair costs of US$249,807.47. The Dollar SteamShip Company suffered heavy losses, went bankrupt due to inability to repay loans, and was liquidated by the Maritime Commission, reorganizing into the "President Shipping Company." That official document was signed by Joseph Kennedy.
My intelligence impressed Joseph, and when he learned of my father's position in the British Foreign Office, his eyes lit up. He said his dream was to become the US ambassador to Britain, and if my father recommended him, his chances of success would be very high. I thought to myself, how could I possibly discuss such a thing with my father? But outwardly, I remained polite. Soon after, somehow, he was indeed appointed ambassador to Britain by President Roosevelt in 1938. However, Joseph made pro-Nazi remarks in London, which strained his relationship with Churchill, and he was dismissed and sent back to the US in 1940.
After dinner, Stephen revealed a lot about Joseph, saying that he made a fortune selling bootlegging with the Mafia during Prohibition, and that he was now a major financial backer of President Roosevelt, which is why he became chairman of the Securities and Exchange Commission. Of course, what most people know most about him is that his second son, John F. Kennedy, later became the 35th President of the United States.
Stephen also mentioned that some of his friends, worried about the war in China, planned to temporarily leave Shanghai. He asked if their assets could be entrusted to me for safekeeping, and of course, I had the right to use them. This explains the origin of the aforementioned castle-like villa, Austin car, and "Supermarine" S6 seaplane.
(Figure 4-10-19) Paul Draken discusses the future development trend of the civil aviation industry with Pan Am President Tripp in the restaurant of the "China Clipper".
On the return trip, I met Mr. Juan Terry Trippe, the founder and president of Pan Am, who was visiting Hong Kong aboard the "China Clipper". He knew about my "China Pearl" round-the-world flight and admitted that the "China Clipper" was a cheesy product developed to pay tribute to my achievements. He also asked me for my views on the future of the civil aviation industry.
I glanced back at the cabin, which had only a dozen or so passengers, and thought of the $2,000 ticket that Annie's father had paid for for me. Suddenly, an idea popped into my head: "With such high costs, carrying only 18 passengers, no wonder a one-way ticket costs a thousand dollars, and only a few people can afford it. If this plane could carry 180 people, the ticket price might drop to one hundred dollars, and more people would be willing to fly, the market would be larger, and the company would make more profits."
"Purely mathematically, this is certainly correct, but it would lower the brand image, and wealthy people would be unwilling to ride with us. My view is that for the sake of the company's image, we should first take good care of high-end elite passengers before considering the low-end market."
Of course, I know this isn't a simple mathematical calculation. To carry more people, you need bigger planes, which increases costs. Another approach is to have less space per person, but that depends on faster, longer-range planes that require less refueling and faster arrival times, making it more tolerable for passengers. Plus, the same number of planes can increase flight frequency. But this depends on breakthroughs in aviation technology. Fortunately, World War II provided the impetus; the demands of war spurred rapid advancements in aircraft performance, leading to the rapid replacement of traditional cruise ships by commercial airlines after the war, including Pan Am's "Clipper" series.
"Mr. Draken, would you be interested in becoming the U.S. representative for China Airlines? I know you have a good relationship with the top levels of the Chinese government, and we really need someone like you," Tripp said. "Moreover, you are a legendary figure in the civil aviation industry, a brand in yourself. If you join us, I'm considering creating another 'China Pearl' product to serve even more high-end customers."
Pan Am invested in China Airlines in 1933 and has always had some distance from the Chinese government's Ministry of Transportation, so it's not surprising that they would consider my value. It would be a lie to say I wasn't interested in Tripp's proposal, but I still had some concerns: "Thank you for your kindness, but I've already promised my country's Imperial Airways that we might have another opportunity to cooperate in the future."
My concern wasn't about Imperial Airways, but rather that when MI6 recruited me, they made it a condition that I could simultaneously operate an aviation business. They wanted to use a private airline for secret missions. Imperial Airways was a British company, which the British government could control, but Pan Am was an American company, which was problematic, especially since it was 1938 and we didn't know whether Britain and the United States would be friends or enemies in the future. So I couldn't make that promise.
Tripp's idea of maintaining a high-end image has always been the mainstream corporate culture of Pan Am. Although it also wanted to expand its market, for example, the development of the Boeing 747 was initiated by Tripp, Pan Am finally collapsed in the 1990s under the siege of other emerging companies that sold air tickets at rock-bottom prices. Tripp had already resigned as president in 1968. I wonder if he remembered the nonsense of a British pilot thirty years earlier.
(Figure 4-10-20) The "China Clipper" arrived in Hong Kong and landed.
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