793.94/6592: Telegram

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

73. My 72, April 20, 8 p.m. and Dept’s 54, April 20, 6 p.m.

1.
The opinion of foreign observers is now tending towards the belief that the Foreign Office statement of policy was issued at the present moment owing to anxiety over the increasing evidence of foreign activity in China. Rajchman is on his way to Geneva to report to the League of Nations on the question of technical assistance. Monnet, also of the League, is reported by my French colleague to be active in Shanghai in endeavoring to organize an international syndicate, with alleged prominent participation of American capital, for the purpose of financing a public works program. The Chinese Government is said to insist upon the exclusion of Japanese from participation in the proposed financing. The German General von Seeckt is reported to have arrived in China with a considerable number of officers to give military instruction, while Americans, Italians, and French are said to be active in selling airplanes. The Legation in Peiping is doubtless in a better position than the Embassy to confirm or deny the foregoing reports. At any rate the combined effect of these various alleged activities and enterprises lead to Japanese fears of a strengthening China and is believed to have precipitated the recent definition of policy. Observers now believe that the statement was issued with Hirota’s full endorsement although none of my colleagues appears as yet to have discussed the matter with him.
2.
On being questioned yesterday as to the method by which Japan proposed to circumvent the delivery of war material and other foreign assistance to China, the Vice Minister for Foreign Affairs told Fleisher that pressure would be brought to bear not on the countries of origin but on the Chinese themselves.

Repeated to Peiping.

Grew