Foreign Relations of the United States Diplomatic Papers, 1935, The Far East, Volume III

793.94/6994

The Minister in China (Johnson) to the Secretary of State

Nanking, May 1, 1935.
[Received June 1.]

Sir: It is worth while considering some of the factors involved in the current speculation regarding the future of Japan in Asia, particularly with reference to Japan’s policy toward China and Chinese response to the policy.

Japan’s foreign policy in recent years has been founded upon a search for a solution of the problem of her population. Settled upon a group of islands, only sixteen per centum of whose soil is capable of providing subsistence, Japan’s population has already reached a point where the question of food is a pressing one. Her population is at the moment increasing at the rate of from eight hundred thousand to a million each year. This problem has for a considerable space of time been the chief preoccupation of the minds of the leaders of Japan, for it is imperative that means be found whereby her people may be fed.

It is not a characteristic of the people of Japan that they should give up and accept without a struggle this situation which fate and a limited environment have prepared for them. The Japanese have initiative, a flair for orderliness in their social organization and a deeply seated belief in their civilizing mission. They fought their way northward from the southern place of their ancient origins and they have the spirit to fight for their chance to live in the world in which they now have their national being.

It is true that there are times in the life of a Japanese when, thwarted on all sides, he will retire into himself and brood upon his fate, shutting himself off from his fellows. Such brooding may end in suicide, a violent admission of an individual’s inability to find a way out, or a protest against conditions that he finds unbearable. But before setting out upon such a period of brooding the Japanese may be expected to use every means at his disposal to find the way out.

The Japanese people are now faced with what on the surface appear to be insolvable problems connected with the feeding of their rapidly increasing population and it is clear that they are trying by every means to find the solutions that are imperative if their people are to live happily and fulfill the mission which they have persuaded themselves is theirs.

This population problem of Japan is essentially a modern one. It was not a pressing one during the period of seclusion, when the ordinary checks to population, famine, pestilence and infant mortality kept the population fairly stable. With the beginning of the Meiji era, however, in 1868, there came better conditions for the people, better government, better sanitation, better communications and better control of the conditions that permitted of famine. The checks are gone but the momentum of life continues at the old rate with the result mentioned.

It seems to me that birth control as a check to this life momentum is a subject of somewhat academic interest at the moment. It will be some time before any such methods could become sufficiently universal in use to have any appreciable effect. The fact is that generations are now coming into the world and growing to adulthood that must be fed. These are the generations that must cause the trouble.

Migration is out of the question. In the West where population pressure was earlier felt the white peoples took thought of the situation and marked out for themselves the areas into which they have been and are pouring their surplus peoples. The United States ceased to be a haven for the surplusage of Europe’s population with the enactment of the immigration laws of 1924.³² There is not a chance that the United States will open its doors to unlimited immigration from Asia. Nor will the colonies of the British Empire, which still offer a home to the peoples of Northern Europe, take kindly to a proposal that they open their doors to the people of Asia.

There is a current belief that Asia offers a home for the surplus population of Japan. This belief is based upon inadequate information regarding China’s own population. There is reason to believe that China’s population has been increasing at a rate not dissimilar to that of Japan. The evidence of this increase is found in the low standard of living everywhere visible and in the fact that the Chinese have been migrating outward all along the periphery of the country. Chinese settlers are moving northward into the Mongolian steppe lands at a rate variously estimated at from one to one and a half miles per year. This fact lies at the base of the constant difficulties between the Chinese Government and the nomadic Mongols. The nomad with his communal interest in the soil moves away from the neighborhood of the sedentary Chinese farmer who brings within him his peculiar attitude toward land and its cultivation. The same pressure to a lesser degree is evident to the northwest into Turkestan and along the Tibetan marshes.

But the area best suited to the sedentary habits of the peasant Chinese farmer bent on finding a new home is found in Manchuria. For a long time the Manchus discouraged Chinese migration into the country which they considered the land of their origin, but from the time of the Russo-Japanese War on this ban was lifted. By 1909 Manchuria had a Chinese population of somewhere in the neighborhood of 10,000,000 and this Chinese population had increased to about 29 millions by 1931. It can be expected that with the better conditions that will prevail under Japanese rule in Manchuria the Chinese population will increase in the next ten years by a third if not by a half so that it is easy to see that there will be little if any room for Japanese to settle in Manchuria.

This assumes of course that the Japanese will care to go to Manchuria to settle as farmers. The Japanese have attempted and continue to try to settle their people as farmers in Manchuria, the latest scheme being to bring young farmers and their families over to settle them along the lines of the railways under obligation to act as guards for the railways in return for the assistance that the Government gives in placing them on the land. Experience thus far indicates that Japanese brought over tend to gravitate toward the cities where they can get the so called “high collar” jobs which they consider better suited to the dignity of a conquering and ruling people.

There is a mysterious incompatibility between the peoples of the two countries that I have never seen explained. The Chinese look down upon the Japanese as a people with little or no culture of their own and there is no doubt that the Japanese despise the Chinese. Intermarriage between the two peoples is almost unknown. This fact was brought out incidentally by a survey made of the population of Hawaii where Japanese, Koreans, Chinese, Portuguese, Filipinos, Kanakas, Russians and American whites live peaceably together. Here it was found that whereas Japanese and Kanakas and whites intermarried, there was no intermarriage as between Koreans and Japanese or as between Chinese and Japanese. The Japanese are more emotional than the Chinese, and have an innate sense of the artistic that the Chinese do not appear to have. The Chinese have and create artistically beautiful things, paintings, gardens, buildings, carved stone and wood and porcelains. But they are generally content to live in surroundings and in rooms that from an esthetic point of view are extremely uncomfortable. The Chinese surrounds himself with a wall and looks inward at himself and his belongings. He is an individualist and never so happy as when surrounded by confusion. The Japanese builds on high ground when he can and opens his house to look outward. The two peoples are not happy in one another’s company.

Formosa may be taken as the test tube in which the chemical composition resulting from Japanese and Chinese living together can be observed. In 1930, some thirty-six years after the Japanese had come into possession of the Island of Formosa, there were some 4,309,000 Chinese living in the Island as against 232,200 Japanese. At the end of 36 years the Japanese still look upon the Chinese in Formosa as a subject people. Some two thirds of the Japanese population are engaged in the business of government, employed as police, clerks, administrators, in the opium monopoly, salt monopoly and camphor monopoly. The remaining third are the hewers of wood and drawers of water for the first two thirds. They are the geisha, carpenters, merchants, et cetera who make living possible for the governing Japanese population who live as Japanese, in Japanese dress, in Japanese houses, eating Japanese food and talking Japanese. The Chinese population lives in the river valleys carrying on their peculiar rice culture brought with them from Fukien three hundred years ago, resides in cities in Chinese houses, wearing Chinese clothes, worshipping at Chinese Buddhist temples, eating Chinese food and talking Chinese, generally looking to China as their cultural center just as the Japanese look to Japan. The Japanese have two sets of schools, the one for Japanese and the other for their Chinese subjects.

Some years ago I went over a series of the textbooks prepared for use in the primary schools for Chinese in Formosa and noted with interest that little or no effort was being made to accomplish the impossible task of making the younger Chinese feel that they were co-heritors with the Japanese in the divine heritage of Amaterasu, the Sun Goddess ancestor of the Japanese. The Japanese military service law apparently does not apply to the subject Chinese population, the armies being kept purely Japanese. The Japanese with whom I made a three day trip into the hills was being let out of the Government after seventeen years of employment and was going back to Japan. When I asked him why he did not find work for himself in Formosa, where he had spent the better part of his life and where he was therefore specially equipped to render valuable service to his Government and his people, he stated that the Government did not encourage such a thing. He said that it would be harmful to the prestige of the Japanese for those who had been in Government service and in uniform (all civil servants wear a uniform and are greeted with respect by the people who take off their hats in their presence) to seek employment outside of Government in business either with the Chinese or in agriculture.

On the journey that we took into the hills we passed by a very elaborate scheme for irrigating and reclaiming arid land. By chance I met the Japanese gentleman who was in charge of the enterprise and he told me that they had fifty thousand acres of land ready to be irrigated and put under cultivation. In reply to my questions he stated that he did not propose to bring down Japanese farmers because they could not compete with the Chinese farmers settled in the river valleys, nor could the Japanese farmers use machinery with any degree of efficiency. He stated that they were settling Chinese farmers on the newly reclaimed land. In other words they were bringing in cheap Chinese peasant labor to raise the rice that the company hoped to produce on its new land.

Japanese officials scattered through the country as police and petty administrators among the Chinese population were as lonely in their work as any American might be whose lot it was to administer some small area among the Filipinos. One cannot come into contact with such facts of Sino-Japanese cooperation without wondering as to its end.

It has been my observation that similar conditions exist in Korea and now in Manchuria where the Japanese have gone in as conquerors and rulers despising the people they govern.

When one considers such facts as these one loses interest in the ancient bogey of the Yellow Peril which used to be described as a mass movement of the yellow peoples led by the Japanese to the conquest of the West. Even the conquering Mongol was unable to recruit his forces from China for the purpose of holding the empire established with Mongol hordes. One wonders anew as to the exact nature of the part that Japan is to play in Asia pressed as she is to find solutions for the problems that her increasing population makes so imperative.

Migration for her people is out of the question. Shut in on all sides and forced to take care of her people at home, she has therefore been obliged to adopt a policy of industrialization, that is, to put her people to work at home to produce goods which can be sold abroad for the money necessary to buy the food and the comforts needed to keep them alive and happy.

The needs of Japan have gone far beyond the mere manufacture of the things that were peculiar to her culture in such surplus as to have stock available for sale abroad. Silk, one of the natural products of Japan heretofore capable of supporting approximately twelve million of Japan’s population, can no longer be relied upon in the face of the competition that is offered by rayon, a product of machine industry having practically all of the qualities of silk.

Japan’s modern industries began in an effort of enterprising manufacturers, aided by a paternal Government, to copy goods which were coming into the country from abroad. It was not long before Japanese factories, well organized and well distributed, were capable of making a wide variety of products which they were prepared to offer in foreign markets at prices which the products of foreign labor could not meet in their own domestic fields. In the special field of textiles the Japanese have had a long and fine experience. This experience they have naturally turned to excellent use in the development of improved looms and in the production of cotton and silk textiles which are being shipped to Europe and to America at prices that the European and American textile manufacturers cannot hope to meet.

The reaction of the West to this effort of the Japanese to find an outlet for the productive effort of their people has been a natural one, although it is perhaps open to the charge that it results only in denying to the consumer his right to purchase his needs in the cheapest market. The West is erecting barriers against the cheaper Japanese merchandise by higher tariffs or by quotas in an effort to raise the price of Japanese goods to western consumers up to the level of prices which it is necessary to charge for western domestically made products if western labor is to be maintained at the standard of wage and living to which it has been brought by a long period of care. Japanese industry has injected into the field of international trade a new element. It is no longer a competition of national skills but a competition in standards of living, costs of labor and management, a competition in which the Japanese with his simpler needs is better fitted to survive.

There seems to be no other way for the western world, with its high living standards and high labor costs, to meet the threat that Japanese industry presents than to shut out of its markets the cheaper products of Japanese industry. The end is of course clear. Unable to send their surplus population abroad and having the products of their stay-at-home population thrown back upon them, the Japanese must turn back to Asia to seek the solution to their problem. As a Chinese leader put it the other day, “If you throw their goods back on them then we must receive their thrust, and we are in no position to resist.”

There seems to be no doubt that Japan’s policy toward China has been adopted as a means of meeting the problem that curses her. In the carrying out of this policy she wavers between the more positive plans of the military group that has always feared the awakening of China and of Russia, and the more negative plans of the liberal, urbanized, industrial leaders who have at times directed Japanese political development and foreign policy since the Restoration.

The military leaders, influenced by the plight of Japan’s rural population from which the bulk of the soldiers are recruited, have apparently hoped by forceful means to place Japan’s military boundary far enough away from the geographical boundaries of Japan proper to meet any threat of Russia before it could reach Japanese soil. They have also hoped to find in Asia an outlet for Japan’s hard pressed population and at the same time so to control political developments in China as to rob them of any threat to Japan. The military boundary has duly been placed at the Hingan Mountains and doubtless Japanese military leaders sleep the more quietly for this fact.

But Manchuria and China as an outlet for Japan’s population have proved and will continue to prove of no value. The constantly increasing millions of Chinese that inhabit Manchuria must absorb most of the profit of whatever Japan can put into that country.

The military who were responsible for the Japanese adventure in Manchuria doubtless believed that they could build up in Manchuria a market for Japanese goods that would justify in the eyes of the urban industrialists the expense of their adventure. But the necessity for local industries to raise living standards and the presence of cheap labor to make such local industries possible indicate another trend.

Another factor making for disillusionment of the Japanese is to be found in the dawning realization of the truth that Manchuria does not contain much in the shape of raw material, metallic or mineral, to meet the necessities of Japanese industry, for it was hoped that in Manchuria Japan might find freedom from her enslavement to the raw material of western markets.

And thus it is that at the moment the Japanese military group, the party of force in Japanese foreign policy, perhaps partially disillusioned for the time being and confining its chief efforts at least temporarily to Manchuria, has given to the more liberal element, represented by a part of the Foreign Office and Japanese industry, an opportunity to try out a less forceful policy. Economic cooperation between China and Japan is the talk and high hopes are held of a profitable arrangement between the two countries whereby Japan will be able to find a greater market for her goods in China and at the same time find in China the raw materials, produced at low cost, that are so necessary. Coal, iron, oil, raw cotton and wool are the materials of greatest need and the search is now on to find these things in China. For these Japan is prepared to pay in the form of goods made in Japanese factories.

Europe and America will be quite content if the two countries can work out some mutually satisfactory arrangement of this kind which will relieve western markets of the pressure of Japanese competition. But the question arises is such economic cooperation possible. Can Japan find in China the solution for the problems that are pressing so hard upon her?

It has become increasingly evident in recent years that China, and this includes Manchuria, does not possess the reserves of iron, coal, oil and other mineral resources that it was customary twenty years ago to credit her with. There is plenty of coal but much of it is so inaccessible to the sea that anyone undertaking to extract it must go to considerable expense before it can be got to the place where it can be used. China’s iron is scattered and does not occur in quantities sufficiently large to make it of much importance when the world situation is considered. Iron can be produced much more cheaply and in greater quantities in India. Such evidences of oil as have been found do not give promise of sufficient quantities to justify the expense of the pipe lines necessary to fetch it to tide water. There is little or no gold produced in the country and no silver to amount to anything. The two metals that are known to exist in China in valuable quantities are antimony and wolfram both of which are useful in the war industries. But in the heavier and more generally important minerals there is little promise of sufficient supplies for an important degree of industrialization over a long period of time.

There remains the question of raw materials that can be produced in the fields and cheap labor that China can furnish in abundance.

The chief raw material of value to the Japanese is of course cotton, followed by wool. There can be no doubt that in the matter of cotton for the textile industries of Japan much should be possible in China, for the cheap field labor is here as well as the soil. It should be neither difficult nor expensive to raise materially the quality and quantity of the cotton grown in China. The chief thing to consider in this connection is the problem of food for the labor used in the growing of the cotton.

As a corollary to the purchase of such raw materials from China there goes the matter of China as a market for the products of Japan. The first requisite in this connection is to build up in China a market friendly to the goods of Japan. There has existed since 1915 a smoldering hostility to Japan and Japanese goods that flames in the form of a boycott every now and then. In recent years the activities of the Japanese in China and particularly in Manchuria and Shanghai have added much fuel to this anti-Japanese fire. It has done tremendous damage to Japanese trade and industry and has caused great losses to Japan. One of the first requisites to a peaceful settlement of difficulties between Japan and China must be the wiping out of the boycott activities that have characterized this anti-Japanese feeling.

There is no doubt that in recent years this feeling against Japan and Japanese goods has been fostered and abetted by agencies of the Chinese Government and the Kuomintang which have used it for the purpose of fanning a national feeling among the people in the schools and in lectures by political leaders. In this connection it must be noted that the activities and pronouncements of Chinese leaders and patriots have been anti-foreign as well as anti-Japanese, for they have used all manner of arguments against the old treaty Powers for the purpose of inculcating national feeling in the rising generations now in school. But the feeling against the Japanese has been intensified by the activities of the Japanese themselves. As a nation they have been singled out for special attention with consequent adverse results to Japanese trade.

One aspect of this whole anti-foreign situation has been the encouragement that it has given to the development of Chinese industries. “Buy Chinese goods” has become a general slogan and Chinese industry, following the line taken by Japanese industry in its infant stages, has been making amazing strides in recent years in its ability to produce usable substitutes for many of the products hitherto brought in from abroad. Bazaars for the sale of Chinese made goods are found in all of the large towns. Itinerant sellers of small wares of Chinese manufacture are to be found throughout the countryside. It is a surprising experience to visit such a bazaar for the sale of Chinese goods and there note the wide variety that is offered for sale, modern porcelain dishes and household fittings, textiles of cotton, silk, rayon, and wool, cosmetics, glassware for chemistry and the table, toys, steam and internal combustion engines and so on. Efforts are being made by the Government to encourage the development of such industries through subsidies and bounties and tariffs.

It is possible and probable that the anti-Japanese attitude now prevalent in China may be significantly altered. Certainly the Chinese Government reacting to the pressure of the Japanese is doing what it can to discourage it. But Japanese made products come more and more into competition with products now made in Chinese factories which are acquiring skill as time goes on. For the moment there is an advantage enjoyed by the Japanese product because it is made in a factory better and more economically run. But the interesting question is, will increased skill and experience and the cheaper labor of the Chinese overcome this advantage. Of course a more enlightened attitude in the matter of taxation must govern the financial policy of the Chinese Government; otherwise the Chinese manufacturer will fail under the intolerable burden of uncertain taxes.

The question of silver enters into the picture very definitely for silver is the metallic basis of all Chinese business transactions. The future of silver offers an uncertain factor in this whole field. At present it is rising in cost, in terms of gold, the nominal basis for currency in the West and in Japan. And this rise in the price of silver increases the price of all commodities, including labor, used in extraterritorial factories located in China and at the same time lowers the price of goods manufactured in gold-using countries when those goods are presented for sale to Chinese consumers.

China is a cheap market for foreign goods. Eighty or more per cent of the population are peasant farmers with a very small individual budget out of which to make expenditures for foreign made goods. It is doubtful whether the standard of living of large sections of the people of China will ever be raised much above its present level. In China there is reason to feel that the present dead level must maintain because the population is increasing so rapidly that there is little incentive or possibility of the general run of people living much above the standard now reached, not only because of the expense but also because of the lack of enough to go around.

Something has been said of the development of industries in China intended to supply the demand in China for certain types of goods hitherto manufactured entirely in foreign countries. It is possible that through the development of such industries the standard of living among a large number of the people may be raised considerably. But it is to be remembered that these infant industries of China parallel the industrial development in Japan and it is hardly possible for Japan to find a market for parallel products in China except at the expense of Chinese industry. Japan will seek such an advantage either by forcing China to lower the tariff on Japanese products or by smuggling or otherwise evading Chinese taxes. The result can only be disastrous to Chinese industrial development and a further handicap to any increase in the living standards of a people forced to concentrate upon the production of food, cotton, wool, and other products of agriculture. The picture presented is of China with a large and increasing population engaged almost exclusively in agriculture, being supplied with consumer’s goods made almost entirely in Japanese factories. Such a market must always remain a cheap market, and because of the ever increasing number of people to be fed it is possible that as a market it will grow cheaper and cheaper rather than the other way. I frankly question whether such a situation offers any solution, except a partial one, to the problem of Japan’s own population. Economically such a solution does not appear to be a sound one for it will mean that Japan is doomed to the role that Spain played in her colonies without the compensation that Spain received for a long time in the form of newly mined gold and silver from areas under her control.

In order to maintain China as a kept market for Japanese made products Japan will have to furnish the police force necessary to preserve the order that must characterize such a market. As is already the case in Formosa, Korea, and Manchuria, the Japanese will seek the so-called high collar jobs for the maintenance of her prestige among a subject people and the time will come when the whole economic system will topple of its own weight as it did with Spain.

It seems to me very evident that it is more than likely that this role of the “high collar job” will be extended from the ordinary functions of government to the management of factories; that the Japanese will have difficulty in preventing the establishment of factories in China near to the source of the raw materials and able to take advantage of the inexhaustible supply of the cheapest of intelligent and industrious labor. Here will lie a factor of great difficulty for the domestic industry of Japan.

Herein also is to be found the real Yellow Peril. For it will be very difficult for the countries of the West to continue to deny their people access to the cheap products of cheap Oriental labor under the efficient management of the Japanese.

Respectfully yours,

Nelson Trusler Johnson

32. Immigration Act approved May 26, 1924; 43 Stat. 153.