894.51/385: Telegram
The Ambassador in Japan (Grew) to the Secretary of State
[Received November 15—2:27 a.m.]
268. Referring to my despatch No. 165 of October 21, 1932,17 I can now report that powerful opposition is developing among the political parties, newspapers and prominent economists to the bond issue of nearly a billion yen proposed for the coming fiscal year for the purpose of meeting the cost of the Manchurian campaign, the augmentation of national debt and the budgetary deficit. Some influential vernacular newspapers directly criticise the military for endangering Japan’s economic stability by demands for funds which can only be supplied by means of loans; others indirectly criticise the military by expressing disapproval of the bond issue which these demands will cause. Leading financial and economic authorities have expressed alarm over the financial and social dangers which will arise from the proposed borrowing.
It now appears certain that the proposed military appropriations will meet strong opposition in the next session of the Diet but it is impossible at present to attempt to forecast the outcome of the expected discussion or the effect of discussion upon the present military program or their control of Japanese politics.
Repeated to Peiping by mail.
- Not printed.↩