Oral Statement by the Japanese Minister for Foreign Affairs (Matsuoka) to the American Ambassador in Japan (Grew), December 17, 1940

1. The key to a fundamental solution of the pending issues between America and Japan is to be found in the consideration, in a constructive spirit, as to how the conflicting national policies of the two countries may be adjusted. If, however, there is, for the moment, little possibility of bringing about such adjustment, the only alternative for the two governments, I believe, would be to join in an endeavour to [Page 896]dispose of these questions in a realistic manner, without prejudice to the question of principles.

I desire to invite the attention of Your Excellency to the tendency on the part of the American Government to mix the discussion of fundamental issues with the consideration of practical methods for solution. When your Government insist upon taking up abstract points of legality, we are perforce constrained to contend that there exists a state of war or military operations on an extensive scale, and/or that there has arisen an entirely new state of affairs. There will be then, as I shall explain, no room for a settlement of any case. If it is really the intention of the American Government to seek a realistic solution, I hope they would maintain consistently a realistic attitude and confine themselves to realistic considerations. There have been instances in the past (for instance, Universal Leaf Tobacco Co.; Incident between the Japanese Gendarmerie and the American Marine) where a practical settlement might have been arrived at on the spot but for the attitude of your State Department insisting upon principles.

2. I have studied carefully Your Excellency’s notes and appended documents of June 10 and of September 15,78 relating to the so-called “Infractions of American rights in China.” Therein are listed all sorts of cases, large and small, including those that have been settled and those that are purely local in character. I presume that Your Excellency does not expect me to offer explanations severally regarding each of these cases. Such explanations, if required, will be given by the officials in charge of these matters. Today I can deal with them only in a general manner.

The cases enumerated in the documents seem to fall under two categories.

Those of economic character, arising from or in connection with
The coastal blockade.
Control of transportation of goods.
Closure of the Yangtse.
Trade and exchange control in North China.
The alleged “monopolies” in North China.
Control of the transportation and shipment of light industry materials in North China.
Control of money transmission in Mengchiang.
Closure of Swatow harbour.
Tobacco control in Shangtung.
Various control measures in Kwangtung.
Those cases of damage resulting from military operation or arising in connection with various restrictions imposed for the maintenance of peace and order, such as:
Damages due to bombings and shellings.
Personal injuries; indignities and affronts.
Trespasses on, or occupation, removal or destruction of, private properties.
Restrictions of residence and movement.
Censoring of mails.
The so-called “Anti-American movement.”
Alleged restrictions on American rights in Japan proper, Chosen and Taiwan.

I had the informal statements prepared for each item of the first category (A) and a general explanation regarding the cases of damage in the second category (B).

3. The claims and charges of the American Government appear to be as follows:

American citizens are, by treaty, legitimately entitled to engage in various economic activities in China, and Japan has no right to restrict or abridge them.
Japan intends to establish an economic structure in China, which is calculated to benefit Japanese alone, and she is according discriminatory treatment to third Powers.
Despite the assurances that American rights, will be respected, Japan is wilfully destroying the said rights.

4. Regarding these three points, my views are as follows:

There have been going on in China for the past three years and a half war-like operations on an extensive scale. It is extremely unrealistic for the American Government to expect the economic activities of American citizens in China to go on undisturbed as though there were no hostilities.
America, while refusing to supply Japan with articles of certain kinds, objects also to Japan’s attempt, in self defense, at insuring the supply of these articles in the spheres within her reach. Our people regard this attitude of the American Government as unreasonable, to say the least.
The American Government totally ignore both the sincere intention and the earnest endeavours of our military authorities to prevent the occurrence of untoward incidents. The allegation that damages are wilfully and maliciously inflicted upon Americans is altogether unfair as it is unfounded.

5. To put it briefly, the complaints of the American Government arise largely from their refusal to face the reality of the situation—to recognize the actual existence of hostilities of a huge scope, and the fact of a new Government being established in China. [Page 898]

As long as we are fighting with the armies of Chiang Kai-shek, we can tolerate nothing that will benefit our enemy while we must seek to insure the safety of our forces and the supply of military provisions. It is for this reason that the movement of goods to and from enemy territories is prohibited; travel in the interior is restricted, measures are taken to maintain the value of the military notes; or a system of inspection is instituted. Obviously, we cannot acquiesce in the demand of any Government to abandon all these measures. The best we can do, and are actually doing, is to minimize the inconvenience to the nationals of third Powers within the limits dictated by military necessity.
It is perfectly proper and legitimate for the new Government in China which are endeavouring to solidify their foundation [to?] have seen fit to inaugurate exchange control and control over the operation of principal industries as well as to establish a central bank for unifying their currency system. Such measures must be considered as legitimate. In fact under the prevailing conditions in the world practically every country has found it necessary to exercise exchange control in one way or another.
The new Government of China certainly will not abolish their control over currency, exchange and also certain branches of industry and trade, notwithstanding protests from third Powers.
The only means by which the complaints of third Powers could be met, it seems, would be to seek some practical and amicable adjustment within the scope of these controls.
As regards the various troubles with our sentries, the American Government seem to labour under an erroneous impression that no stringent orders from Tokyo to prevent the recurrence of these troubles have been issued; or that soldiers on the spot are lacking in discipline and do not abide by their orders. However, without a knowledge and correct appreciation of the actual backgrounds of these troubles, one cannot properly decide the merit of the disputes. As for our soldiers they are mostly simple men from the country-side who are discharging their duties as conscientiously as they know how. On the other hand, there are many Europeans and Americans in China, who have been accustomed to look down upon Chinese, and who will not cast aside their overbearing manners even in the presence of our sentry. They contend that they are under no obligation to obey regulations set by our army for the maintenance of peace and order. They refuse sometimes to show their passes or alight from their cars, when passing the sentry line. Modification of this attitude on the part of such foreigners will go a long way toward the prevention of most of the troubles such as have occurred. I need not add to say that our soldiers have been and will be strictly ordered to use the utmost restraint in their dealings with innocent third Power nationals.
As regards the bombing question, my predecessor had already made to Your Excellency a detailed statement as to the utmost precautions that are being taken against causing damage to third Power nationals.
I am not aware of the existence of an “Anti-American Movement” such as is mentioned in Your Excellency’s note, although it must be admitted as a fact that certain measures adopted by the American [Page 899]Government have aroused considerable feeling in this country. I may add that we have numerous reports of incidents that have occurred in the United States since the outbreak of the China Incident, in which Japanese subjects were subjected to pressure and indignities.

6. By way of supplementing the general statement I have made just now, I desire to transmit to Your Excellency informal documents that have been prepared as replies to some of the more recent representations from your Embassy.

Concerning the egg trade (Reply to No. 1639, Sept. 19)79
Concerning the American trade in petroleum products80 (Reply to No. 1636, Sept. 18)
Concerning the control of shipment of raw materials for light industries in North China81 (Reply to No. 1665, Oct. 24)

Furthermore, I have the honour to transmit to Your Excellency an informal statement giving a general explanation regarding the cases of damages caused by air raids and other military operations.81

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  3. Infra.
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