The Ambassador in Japan (Grew) to the Secretary of State

No. 341

Sir: In the past it has been generally held that the occupation of Manchuria by the Japanese was initiated and carried out by the Japanese Army (or by that part of it stationed in Manchuria) without the previous knowledge and consent of the civil branches of the Japanese Government. While nothing has been disclosed which would alter this view, it now appears that it may not have been the Army, or the Kwantung Garrison, alone which organized and carried out the occupation, but that an important impelling influence behind the Army may have been the South Manchuria Railway. The Embassy has nothing exact and explicit upon which to base this statement, but numerous small facts point to a larger participation in the affair by the South Manchuria Railway than is generally recognized.

There is no doubt that the South Manchuria Railway had reason for desiring the Japanese control of Manchuria. The Railway was the principal sufferer from the pin-pricking policy which the Chinese administration of Manchuria adopted as a means of resistance to Japanese political and economic encroachment. Despite the Japanese claim that the so-called “parallel railways” were in violation of an agreement, the Chinese were from time to time building railways which served to deflect traffic from the South Manchuria Railway, whose receipts in consequence were steadily decreasing. With the impending completion of the Chinese port of Hulutao, connected with the Chinese net-work of railways, the South Manchuria Railway could foresee its fall from the position of supreme economic factor of Manchuria. Diplomatic protests against this invasion (as it was considered) of the South Manchuria Railway’s territory having had no effect, it would not be strange if the Railway backed forcible measures in order to maintain its supremacy.

On June 12, 1931, Count Uchida was appointed President of the South Manchuria Railway by a Minseito Cabinet, although he was formerly supposed to have Seiyukai leanings. Count Uchida is said to be in general a careful, astute diplomat of strong nationalist leanings, but when aroused to be a hot-headed zealot, stubbornly and fanatically devoted to a cause. He has long been an ardent supporter of Japanese expansion in Manchuria, and, according to Tsunego Baba, in an article in the Chuo Koron of May, 1932, it was through his efforts, while Minister to China in 1903, that the Russo-Chinese secret agreement of alliance failed of conclusion. Count Uchida is said to have realized then that the agreement would have [Page 248] “deprived Japan of any pretext upon which she could make war on Russia to assert her interests in Manchuria”, and consequently he “spared neither money nor energy to induce Chinese high officials and other notables to cancel the secret treaty which was then ready for ratification by the Empress Dowager”. It is reported that Uchida spent two million yen (a part of which went to the Empress Dowager herself) to secure the non-ratification of the agreement. The ostensible reasons for the appointment of Count Uchida to the Presidency of the South Manchuria Kail way were (1) to take the railway out of Japanese politics, and (2) to provide as President a man of sufficient strength and prestige to be able to conduct necessary negotiations with the Chinese regarding the many pending questions. At that time, however, the Japanese-Chinese relations in Manchuria were rapidly approaching a crisis, and it is possible that influences outside of political circles in Tokyo desired to have as President of the South Manchuria Railway a man of strong nationalistic tendencies and of the moral courage necessary to carry through a plan which would certainly arouse great opposition throughout the world.

The Embassy can adduce no direct evidence that Count Uchida was a party to the planning of the Manchurian outbreak, but it is significant that the outbreak occurred only three months after he took office and that in the October following the outbreak he came to Tokyo to advocate the policy which had been taken by the military in Manchuria. At that time, it will be remembered, there was a fairly open conflict between the apparent views of the Japanese military authorities and those of the civil authorities, and it seemed somewhat strange that Count Uchida, himself a civil official appointed by the civil authority, should plead the cause of the military. A probable explanation of this anomaly lies in the supposition that Count Uchida was a party to the plans of the military, if not the master mind behind the entire scheme.

After the downfall of the Wakatsuki Cabinet, according to Baba, Premier Inukai of the incoming Seiyukai Cabinet, because of an old personal enmity toward Uchida, endeavored to remove him from the Presidency of the South Manchuria Railway, but was prevented from doing so by the influence of the military. Later, when the Saito Cabinet was formed with the concurrence of the military party, Count Uchida was selected as Foreign Minister, although he did not take office until after the Lytton Commission had completed its investigation of conditions in Manchuria. Count Uchida, it will be remembered, was retained in office in Dairen in order that he might advocate before the Commission the cause of the Japanese military occupation of Manchuria and the necessity of a separatist movement in Manchuria. These various circumstances would indicate that Count Uchida, from the beginning of the incident, if not [Page 249] before, was working in close contact with the military and was thoroughly in accord with their views. By inference it can also be presumed that the organization of which he was head, i.e., the South Manchuria Railway, was likewise in close accord with the actions of the military.

The development of the Manchurian incident itself, at least in its early stages, indicates that it may have been organized at the instigation of the South Manchuria Railway. In the Embassy’s despatch No. 374, of October 24, 1931,73 with which was transmitted Mr. Salisbury’s74 report on his investigations in Manchuria, Mr. Salisbury pointed out that the purpose of the Japanese military actions in Manchuria in September, 1931, appeared to be to obtain control of strategic points (i.e. the railway terminals), rather than to protect Japanese nationals, which was the ostensible purpose of the actions. On September 18th and 19th the Japanese Army occupied Mukden, Changchun, Antung and Yingkow (Newchwang) and on the 21st occupied Kirin. Later operations were extended to Tunhwa, Tungliao, Taonanfu, Hsinmin and Tsitsihar—all, it will be noted, either railway terminals or important railway towns. The purpose of the military actions therefore undoubtedly was to obtain control of the Chinese railways, either for strategic reasons or in order to permit their operation to be taken over and controlled by the South Manchuria Railway.

This latter objective was attained almost immediately after the occupation, although insurgent operations prevented any extensive use of the railways until the fall of 1932. That the operation of all railways in Manchuria (except the Chinese Eastern Railway, which is half Russian owned) should be placed under the control of the South Manchuria Railway was apparently understood from the early days of the Manchurian affair, as on November 13, 1931, a press ban prohibited the publication of reports that “the South Manchuria Railway is making some preparations with the new Manchurian Government about the construction of the new railways or the extension of its railway lines”, and on December 9, 1931, a notice was sent to the newspapers to the effect that “Your attention is called to the fact that publication of the report that such railways as the Ssupingkai-Taonan and Taonan-Angangchi railway will be placed under the trust management of the South Manchuria Railway upon the establishment of the Heilungkiang government would violate the ban placed on November 13th”. Although the South Manchuria Railway operated (as far as possible under the conditions) all the railways of Manchuria from the time of the occupation, no agreement to this effect was made public until March 2, 1933, when the [Page 250] alleged substance of a contract (no date given) between “Manchukuo” and the South Manchuria Railway Company was published. Under this contract, all loans and advances made to “Manchukuo” or the previous administration, amounting to Yen 130,000,000, by the South Manchuria Railway for the construction of railways in Manchuria, are merged into one loan on the security of the railways, the management of which is entrusted (apparently indefinitely) to the South Manchuria Railway. According to this contract, it appears that the South Manchuria Railway can at any time default in payment to itself of principal and interest on the loans and thereupon claim title to the railways of which it is already in practical possession. If it can be assumed, therefore, that one of the primary influences impelling the Japanese occupation of Manchuria was the desire of the South Manchuria Railway to obtain possession of the Chinese railways in Manchuria, this desire can now be considered to have been fulfilled.

As a more concrete indication of the connection of the South Manchuria Railway with the Japanese military activities in Manchuria, Mr. Tokuzo Komai may be cited. Mr. Komai was one of the leading spirits in the establishment of “Manchukuo”, was formerly the head of the General Affairs Bureau of that government, and is now a member of the Privy Council of “Manchukuo”. In his recently-published book, Dai Manshukohu Kensetsu Boku (Record of the Founding of Great Manchukuo) he states that the South Manchuria Railway Company financed the Kwantung Army (the Japanese Army in Manchuria) during the initial stages of the occupation of Manchuria. Again, he states that the lower class employees of the South Manchuria Railway worked in the first lines shoulder to shoulder with the Japanese troops following the first outbreak in Manchuria. If this is true (and there is no reason to doubt it), the relations between the South Manchuria Railway and the Japanese Army in Manchuria must have been so close as to amount to cooperation from the start of the trouble, if not before.

An effort has been made in the foregoing to indicate that the interests of the South Manchuria Railway constituted one of the strong reasons for the Japanese military occupation of Manchuria, if they were not the primary impelling cause, and that it is strongly probable that Count Uchida, while President of the South Manchuria Railway, in collusion with certain officers of the Japanese Army in Manchuria, engineered the entire scheme for the occupation of the region and its separation from China. If such is the case, it would appear to upset the widespread theory that the Japanese action in Manchuria was simply military aggression, modified to some small extent by economic factors. Instead, while military strategic considerations [Page 251] and the ambitions of the Japanese Army were undoubtedly important factors, the actual and immediate cause of the occupation would seem to have been the irresistible growth of economic forces.

This would not be the first time that local economic and social forces on the edge of a nation’s sphere of activity have dictated the policy of the home government.

Respectfully yours,

Joseph C. Grew
  1. Foreign Relations, 1931, vol. iii, p. 314.
  2. Laurence E. Salisbury, Second Secretary of Embassy in Japan at that time.