Foreign Relations of the United States Diplomatic Papers, 1937, The Far East, Volume III

894.00/696

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

No. 2209

Tokyo, January 1, 1937.
[Received February 19.]

Sir: Reverting to the Embassy’s despatch No. 1630 of January 7, 1936,² I have the honor to submit to the Department the following survey of the situation confronting Japan at the opening of the year 1937.

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United States

General Araki observed to the British Ambassador a year or two ago that if it were not for the exclusion clause of the Immigration Act of 1924,³ the relations between Japan and the United States might be considered as thoroughly satisfactory. While it is true that no current controversies of prime importance are at present sufficiently acute seriously to disturb those relations, nevertheless we should not close our eyes to the fact that several current issues may in due course become acute and are potentially hazardous. First and foremost is the naval issue which has automatically arisen with the termination of the Washington Naval Treaty.⁴ How the future will shape up in this respect we cannot yet foresee, but it is safe to say that if a race in naval building and in the construction of fortifications results, the suspicion and uneasiness engendered will inevitably make for tenseness in those relations. Other issues which appear to be potentially disturbing are Japan’s aggressive policy in China with the possibility of that policy eventually interfering with American interests, and the flooding of American markets with Japanese low-priced goods against which we may ultimately be obliged to protect ourselves with resultant international friction and irritation. It appears unnecessary, however, to cross these bridges until we come to them. The forthcoming unofficial visit of representatives of American cotton textile manufacturers, who will endeavor to arrange a gentlemen’s agreement for the voluntary restriction by the Japanese of their textile exports to the United States⁵ is a step in the right direction to avoid the necessity of crossing that particular bridge at all.

The Philippine Islands also remain as a potential, although not an immediate, source of danger to the relations between Japan and the United States. The Davao land question, quiescent for the moment, may arise again and necessitate intervention by the American Government. The strengthening of American naval and army bases in the Philippines, and the further development of American air services to and within the islands (thus tending to check Japan’s “southward advance”) would certainly act as an irritant to the relations between the two countries. However, this again is a bridge which need not be crossed at present.

Other current controversies such as the petroleum problem, fisheries, et cetera, are susceptible of adjustment by negotiation and in any case are not, at present at least, of sufficient seriousness to disturb the even tenor of our general relations. There is no good reason to believe that these general relations may not maintain their present satisfactory status for some time to come. On the contrary there is very good reason to feel that the Japanese Government values American friendship, especially in view of Japan’s increasing difficulties with other nations, and will not purposely alienate the United States unless situations arise where Japan considers her own national interests to be acutely involved. The outlook for 1937, so far as Japanese-American relations are concerned, therefore, would not at present appear to justify pessimism.

China

A recent series of articles in the Osaka Mainichi by Kumataro Honda, ex-Ambassador to Germany, castigates the Government for what he calls “diplomacy by slogans”, and so far as China is concerned the term is apt. In 1931 and 1932 the current slogan was “Manchuria the Life-Line of Japan”. Once the Manchurian situation had been dealt with, a new slogan shortly was heard: “Japan the Stabilizing Factor in East Asia”. This latter slogan soon developed into Hirota’s three points for settling Japan’s relations with China, namely, the checking by the Chinese Government of anti-Japanese activities and propaganda, Sino-Japanese cooperation against communism and the stabilizing of China’s factual relations with “Manchukuo”.^* Obviously these points were susceptible of a very broad interpretation. Later, as various anti-Japanese incidents took place in China, one series of “demands” after another were formulated and publicly announced in a truculent and aggressive tone. The failure of Japan’s diplomacy and consequent loss of face in China arise from the fact that save in a few instances where local incidents have been settled through minor concessions, few if any of these general demands have been met. Protracted conferences have taken place in Nanking and official announcements have frequently been made in Tokyo to the effect that the negotiations were proceeding, but so far as the Embassy is aware they have led nowhere. Their failure has been ascribed to China’s “insincerity”, a somewhat overworked expression habitually and indiscriminately used by the Japanese to characterize those foreign governments which fail to concede Japan’s desiderata by signing on the dotted line. While this Embassy is not informed of the specific results of the Nanking conversations, it would seem that the astuteness rather than the insincerity of the Chinese Government has succeeded in playing the Japanese negotiators along without surrendering Chinese sovereign rights. Moreover serious military involvement in China has been avoided by the Japanese Army because of the remarkably improved morale and military forces of China and of the changed situation in Siberia—a very different Eastern Asia from 1932.

It does not appear necessary, for the purpose of this report, to deal extensively or in detail with Japan’s diplomacy and activities in China during the past year. Suffice it to say that the overt intention and efforts of the Japanese military to detach the five northern provinces from the jurisdiction of Nanking largely miscarried; that the support of the Japanese military of the widespread smuggling operations not only became an international scandal but went far to bring down on Japan the censure of foreign countries including the United States and Great Britain; and that, far from cooperating with Nanking in an effort to control the anti-Japanese sentiment rapidly developing throughout China, the Japanese have constantly intensified that sentiment by their truculent and aggressive attitude and tactics. Thus the Chengtu incident, wherein Japanese lives were lost, was caused by their shortsighted attempt to force the opening of their consulate in that place which had been closed for some 5 years, in the face of Chinese opposition, and this incident, whether directly or indirectly, led to similar incidents at Pakhoi, Hankow, Shanghai, Changsha and Tsingtao.⁶ Each of these several incidents, involving the death or injury of Japanese subjects, led to violent demands for satisfaction which in the majority of the cases have not been fully met. Thus Japan has lost face, further anti-Japanese sentiment has been evoked and a thoroughly vicious circle established. Japanese support of the invasion of Suiyuan by Mongol troops appears similarly to have miscarried and to have served only to increase anti-Japanese feeling throughout the country.

As Mr. Takao Saito, a leading member of the Minseito Party, recently wrote in the Asahi:

“What is to be Japan’s relation to China? It is said ad nauseam that Japan’s policy is to be China’s friend, that Japan’s policy is to cooperate with China for the sake of peace in the Far East, and so forth. These phrases have been preached for years, but I have yet to see any manifestations of actual friendliness in Sino-Japanese relations.

“Had there been such manifestations there could hardly have occurred the anti-Japanese incidents which have taken place all over China. Probably the real cause of animosity between the two countries is that Japan, while asserting a policy of friendship and understanding, takes the attitude of continual readiness to knock her neighbor down. Whether or not this is a true characterization of Japan’s policy is beside the point; the fact is that real cooperation requires abandoning the attitude. I believe it is time for us to look into our continental policy fundamentally.”

Now, at the opening of the new year, the Japanese program in China, whatever it may be, appears to have come to a temporary halt owing to the new developments arising out of the capture and subsequent release of Chiang Kai-shek⁷ by Marshal Chang Hsueh-liang.⁸ The Japanese are clearly marking time. Whether these developments will lead to an intensification of the anti-Japanese movement in China and whether, and to what extent, they will induce a stiffening of the future policy of Nanking remains to be seen. Similarly, there is as yet no indication as to how they may affect the immediate development of Japan’s policy and tactics in China. Japan has seriously lost face through the failure of her negotiations with Nanking. The Japanese Cabinet will be taxed with that failure in the coming session of the Diet and while Japanese Cabinets have a way of carrying on in spite of censure and lost confidence, it is not inconceivable that the Cabinet may fall. If it does fall there will be every probability of the appointment of a more reactionary cabinet, but whether the present Cabinet falls or not, no one can yet predict with any assurance if the trend of policy during the present year will aim to develop friendship with China on a more stable basis or will move in the direction of more positive aggressiveness. The outlook in that respect is still quite nebulous.

The Japanese nation seems to be somewhat thunderstruck by the sudden and unexpected determination of China to yield no more to Japanese pressure. The nation is, figuratively, scratching its head and wondering what it should do next. There has been some discussion in the newspapers of a reorientation of policy toward China, but there has been no indication as yet of the direction which that reorientation will take. It is strange but true that Japan appears to have been the last to appreciate the changed conditions in China. Now that Japan realizes that its bluff of military pressure no longer works, some other aggressive method of dominating North China may be tried. Economic cooperation, with emphasis on its aim being, “improvement of the condition of the people”, is an old army plan that is being advocated increasingly by army spokesmen which might be an outlet for Japanese expansionist activities, not too objectionable to the Nanking Government. For the present it appears that Japan is not attracted by the thought of a frontal attack, on her own volition, against Nanking. More probable is the method of peripheral penetration and digging in in North China and along the Mongolian frontier.

There can be no doubt as to the soundness of the statements contained in the final paragraph of our despatch No. 1630 of January 7, 1936,⁹ surveying the general situation facing Japan at the commencement of the last year, which said, in relation to Japan’s policy with China:

“The procedure to be followed and the methods to be pursued are open to influence by some or all of the factors suggested in this despatch, but the expansionist urge is fundamental, and I think there is no doubt that whether quietly and gradually or openly and aggressively Japanese energies will be found, from now on, steadily directed towards consolidating Japan’s control in North China and Mongolia as a primary axiom of her future strategic safety and economic welfare.”

Soviet Russia

Good relations between Japan and Soviet Russia in the present political era are an anachronism. Apart from frontier incidents and other minor troubles it is perfectly obvious that Russia’s well justified fears of eventual Japanese expansion into Mongolia and Siberia on the one hand, coupled with Japan’s fear of the spread of communism in neighboring territory on the other hand, are in themselves sufficient to prevent the development of any basis of mutual confidence. Nevertheless, up to the month of last November, diplomatic efforts had succeeded in elaborating a fair modus vivendi under which Soviet-Japanese relations might be carried along for the time being without too great risk of critical developments. The appointment of a mixed commission to consider frontier questions had been accepted in principle and a fisheries treaty, distinctly favorable to Japan, had been initialled and was ready to be signed on November 20. The Soviet defenses in Siberia and Vladivostok, coupled with the double-tracking of the Siberian Railway, had been brought to a point of effectiveness where Moscow could afford to regard the bluster and sabre-rattling of the Kwantung Army with a degree of cynical tolerance, while the Japanese on the other hand were too busy modernizing their army and aiming to strengthen their forces in Manchuria to a point of reasonable balance with the Soviet forces to the north to seek further grounds for early conflict.

This temporary amelioration in Soviet-Japanese relations, however, was rudely shattered by the conclusion of the Japanese pact with Germany.¹⁰ While ostensibly the pact aims only at cooperation in combating the activities of the Comintern in spreading communistic propaganda and practice abroad and is therefore not openly directed against the Soviet Government, nevertheless the existence of a secret understanding or agreement between the General Staffs of the two countries is generally accepted as fact and the Soviet Ambassador in Tokyo asserts that Moscow is in possession of precise evidence to that effect. Political opponents of the Cabinet in Japan maintain that if the news of this pact had not been permitted to leak before November 20, the Soviet-Japanese fisheries treaty would have been signed and all would have been well and they therefore charge the Foreign Minister¹¹ with a grave blunder in allowing this leakage. But it is inconceivable that Moscow was not well aware, long before that date, of what was going on in Berlin, and the blunder, if such it was, would seem to lie not with the leakage before a certain date but in entering into any such pact at all. The explanation is simple. The pact and whatever secret agreement may be attached to it were concluded by the Japanese military, the negotiations with Germany having been largely carried on by Major General Oshima, the Japanese Military Attaché in Berlin. We do not know whether these negotiations were conducted with the blessing of the Japanese Foreign Office, but since the Foreign Office has long been assiduously working to improve and stabilize Japan’s relations with the USSR as a matter of major policy, it is reasonable to question whether the shattering effect on those relations of a pact with Germany would not have been abundantly clear in advance and whether the civil Government in Tokyo could have been in sympathy with so sharp a divergence in the political orientation of Japan’s diplomacy. Certainly the pact has called forth widespread criticism throughout Japan. Here again the dual system of policy control in Japan would seem to have manifested itself. At any rate, the die is now cast and it is obvious that Japan’s relations with Soviet Russia have suffered a rude setback which is not likely to be overcome in the near future. Moreover we may be sure that the Soviet Government will continue to act on the principle that the only language understood by the Japanese is force, and that when struck, whether by a minor frontier incursion or by some broader form of aggression, the wisest policy to follow is promptly to strike back with double the force.

Germany

That the treaty between Japan and Germany envisages anything in the nature of a pact of military mutual assistance in case of war seems highly unlikely. It is said that Japan did her best to get Poland to participate in the arrangement with Germany but without success, and with Poland independent of commitments, and with France at Germany’s back, it is hardly likely that Germany would undertake to attack Russia in case of a Soviet war with Japan. Nevertheless the existence of an agreement for an exchange of military information and for the supply of arms and ammunition and technical aid to Japan in return for commercial commodities from Manchuria is a reasonable hypothesis. Whatever the precise nature of the agreement concluded, it is evident that a new orientation has arisen in Japan’s policy, that her relations with Germany are likely to be strengthened as time goes on and that this new orientation is bound, whether intentionally or otherwise, to react unfavorably on any improvement of Japan’s relations not only with Soviet Russia but with Great Britain and other democracies as well.

Italy

While there is no good reason to believe that Japan is purposely aligning herself with a Fascist bloc, nevertheless her recent almost simultaneous pacts with both Germany and Italy have naturally given rise to such a theory. In actual fact, the agreements by which Japan will withdraw her Legation from Addis Ababa and substitute therefore a Consulate, while Italy opens a Consulate General in Mukden, thereby implying de facto recognition respectively of the Italian acquisition of Ethiopia and of the “independence” of “Manchukuo”, would appear to envisage reciprocally privileged trade relations rather than to have any important political bearing.

Great Britain

Japan would like good relations with Great Britain but, as the British Ambassador recently said to me, she would like them on the basis of “all take and no give”. Sir Robert Clive says that his Military Attaché is constantly telling him how very friendly and cordial the Japanese army officers are to him, to which the Ambassador replies that this cordiality is but skin-deep and is induced solely by the consideration that the Japanese Army has at last awakened to the fact that in the event of a Japanese war with Soviet Russia Great Britain might not preserve even a benevolent neutrality. This fact gives them pause. A large element of the British people today are anti-Japanese in sentiment as a result of the Manchurian episode, Japan’s aggressiveness in China, trade questions, the Keelung incident¹² and other controversies. In the meantime no serious setbacks in Great Britain’s relations with Soviet Russia have occurred during the past three years. These relations are not cordial but they are at least satisfactory. The Soviets know that communistic propaganda in Great Britain will not be tolerated. Naval and trade agreements have been concluded. Thus the former enmity of the two countries is largely evaporating while Britain’s relations with Japan have steadily grown worse, and the Japanese Army has at last grasped the possible future implications of these developments which are beginning to cause anxiety. Under these circumstances it is not surprising that Japanese army officers should go out of their way to be cordial to their British confreres.

Potentially serious is the Japanese program of control in various parts of China because such control is certain, sooner or later, to interfere with British interests in that country. The notorious Amau Statement¹³ and other pronouncements of Japanese policy relating to China have not served to render any less determined Great Britain’s intention to support and develop those interests, and it is reasonable to surmise that, if carried to their logical conclusion, the respective policies of Great Britain and Japan in China are bound to clash.

In the meantime Anglo-Japanese relations have been rendered difficult by trade controversies in India, Australia, and elsewhere, and by the oil question, while the Keelung incident, wherein British naval seamen are alleged to have been assaulted and injured by Japanese police in Formosa, has further embittered these relations. As the Japanese Government has, up to the present, refused to make adequate amends for this incident, the situation has come to an impasse. The Commander in Chief of the British East Asiatic Fleet has postponed his official scheduled visit to Japan while embarrassing questions have been asked and resolutions introduced in the British Parliament. Although Prince Chichibu, the Emperor’s brother, is to represent the Emperor at the forthcoming Coronation in London in May, it would appear, under present circumstances, that he may not receive so warm a welcome as would have been the case a few years ago.

In Japan itself, much outspoken criticism is heard by those who dislike the agreement with Germany and who would prefer to strengthen the old Anglo-Japanese friendship, a friendship which at present is distinctly on the decline.

Netherlands

Relations with the Netherlands have improved measurably during the past year due to the ironing out of the trade and economic difficulties with the Dutch East Indies. The first obstacle to good relations was removed by the final settlement of the protracted shipping dispute and with that out of the way satisfactory progress is now being made in connection with the much desired commercial treaty.

It will be recalled that in 1934 the Japanese sent a commercial mission to The Hague, headed by a man of ambassadorial rank, for the purpose of inaugurating negotiations for a commercial treaty. This commission so antagonized the Netherlands Government by its inept use of publicity and its attempt to address the people directly, with promises of cheap goods, that although 6 months were spent in Holland they were at length forced to return with no result. When the shipping dispute arose the Japanese attempted to use the negotiations on this question as a lever to force the matter of the commercial treaty negotiations but the Dutch stood firm and refused flatly to take up the question of the commercial treaty until after the shipping matter was out of the way. They eventually won their point and the Japanese ceased their dilatory and obstructionist tactics with the result that last year the shipping question was settled to the satisfaction of both parties.

Negotiations were then resumed on the question of the commercial treaty and are now in progress between the Japanese Consul General at Batavia and a member of the East Indies Government appointed for that purpose. It was agreed that publicity should be confined to the issuance of a simple communiqué stating that conversations were under way and that nothing further should be given out until the negotiations had reached a conclusion one way or another. I am informed that they have now reached a stage where a draft has been submitted to the home government at The Hague for approval. In this connection the question of sugar is a most important one, and it is the object of the East Indies Government to arrange that Japan shall continue to purchase 90 per cent of their total sugar imports from Java; at the same time they hoped to obtain a guarantee that Japan will not increase the production of sugar in Formosa, although it is doubtful whether they will be succesful in this direction. Much of the sugar imported by Japan from the East Indies is re-exported to China. At first the Dutch objected to this but recently they have been willing to give way on this point and have come to the conclusion that it is just as profitable to sell sugar to Japan for re-export as to attempt to increase their Chinese market at the expense of the Japanese.

It will therefore be seen that considerable progress has been made during the past year and that relations have improved between the Netherlands and Japan and while, of course, a wary and watchful eye is being kept upon Japan’s new policy of “Southward Advance”, there is nothing on the immediate horizon which should interfere with continued improvement of relations between these two countries.

A tentative invitation from the Japanese Government to the Netherlands to send its fleet on an official visit has been tacitly left in abeyance for the present owing to the desire of the Netherlands Government to afford at least moral support to the British Government in its attitude towards the Keelung incident, mentioned elsewhere.

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Respectfully yours,

Joseph C. Grew

2. Not printed.
3. Approved May 26, 1924; 43 Stat. 153. See section 13 (c). For correspondence regarding the restriction of Japanese immigration, see Foreign Relations, 1924, vol. ii, pp. 333 ff.
4. The Japanese denunciation was announced by note on December 29, 1934; for text, see note No. 250, December 29, from the Japanese Ambassador, Foreign Relations, Japan, 1931–1941, vol. i, p. 274; for correspondence, see Foreign Relations, 1934, vol. i, pp. 405 ff.
5. See vol. iv, pp. 780 ff.
6. These points have been variously reported and variously interpreted. They are set down here as described to me by Mr. Hirota himself. J. C. G[rew]. [Footnote in the original.]
6. For details, see Foreign Relations, 1936, vol. iv, pp. 414–458, passim.
7. Generalissimo and President of the Chinese Executive Yuan (Premier).
8. Vice Commander in Chief, Bandit Suppression Forces for the Northwest until December 25, 1936; under arrest thereafter.
9. Foreign Relations, 1936, vol. iv, p. 706.
10. Signed at Berlin, November 25, 1936, Foreign Relations, Japan, 1931–1941, vol. ii, p. 153; for correspondence, see Foreign Relations, 1936, vol. i, pp. 390 ff.
11. Hachiro Arita.
12. This took place October 7, 1936, and involved the arrest and mistreatment of British sailors by Japanese police at Keelung, Taiwan (Formosa).
13. Statement by spokesman of the Japanese Foreign Office, April 17, 1934, Foreign Relations, Japan, 1931–1941, vol. i, p. 224; for correspondence, see ibid., pp. 223 ff.