793.94/8546
The Ambassador in Japan (Grew) to the Secretary of State
[Received March 18.]
Sir: I have the honor to refer to the Embassy’s despatch No. 2266 of February 16, 1937,34 and to report that the proposed alteration of [Page 30] the aggressive policy hitherto pursued by Japan toward China and a reorientation of diplomacy based on economic lines now seem to be taking concrete shape.
The conciliatory remarks regarding China in the speech delivered in the Diet by Premier Hayashi as Minister for Foreign Affairs on February 15* were given added significance by subsequent replies to interpellations in the Diet. Answering a rather chauvinistic interpellation in the House of Representatives on February 19 by Mr. Seigo Nakano, leader of the Tohokai (Eastern Association), regarding Japan’s policy toward China, Great Britain, and the western Powers, Premier Hayashi stated: “I have no faith in a pugnacious foreign policy”. In reply to an interpellation in the Lower House on February 20 by Mr. Hyogoro Sakurai, of the Minseito, as to the Government’s attitude toward the Hirota Cabinet’s three-point policy toward China, Premier Hayashi stated that the Government considered the three points proper but had different views from those held by the Hirota Government with regard to their application. He added significantly: “It is greatly to be regretted if China makes the mistake of thinking Japan is wedded to a policy of aggression. I quite agree with Mr. Sakurai on the question of promoting Sino-Japanese friendship.”
There are indications that Premier Hayashi is considering a complete abandonment of the Hirota three-point policy, which aimed at the eradication of anti-Japanese agitation in China, factual cooperation between Japan, “Manchukuo” and China, and cooperation between Japan and China for the removal of the Communist menace in China. It will be recalled that a number of specific demands based on this policy were the subject of the Sino-Japanese negotiations that failed in December 1936. According to the Japanese press, all of the political demands will be relinquished and the only two points in the former program that will be retained by the present Government are economic in character: the reduction of the Chinese tariff and the establishment of an air service between Japan and China. In the negotiations conducted at Nanking the Chinese were reported to have tentatively agreed to lower China’s import duties on rayon and cotton textiles, sugar, marine products, and sundries for the improvement of trade relations between the two countries. A proposal for the establishment of a Sino-Japanese air service would probably be acceptable to the Chinese under certain conditions.
With regard to the proposed “reorientation” of Japan’s China policy based on economic desiderata, it has recently been reported that the Government has officially decided to send an economic mission to China on March 12 under the chairmanship of Mr. Kenji Kodama, former [Page 31] President of the Yokohama Specie Bank. Mr. Kodama is reputed to be an authority on Chinese affairs and also to be popular in China. At the same time it is reported that the Premier holds the belief that a renewal of diplomatic negotiations with China would serve no useful purpose.
As a result of the lessening of tension over the internal political situation and the Premier’s conciliatory statements in the Diet regarding China there has been a renewal of public interest in Sino-Japanese affairs. There has been an insistent demand on the part of the liberal elements in the Diet for the adoption of a more sympathetic attitude toward China and for a clarification by the Government of its concrete aims with regard to that country. Furthermore, the Japanese newspapers are unanimous in approving the change of policy now being considered by the Government. Most of the newspapers take the position that Japan can now deal with China as an equal because that country is a united nation and not, as formerly, an entity composed of warring factions. In many of the recent editorials concerning China it has been stated that Japan has no wish to infringe on the territorial integrity of that country as an independent State. Thus the contrast between the present tone of the press and its former tone is patent.
It may be of interest to note that The Japan Times of February 22 compared Japan’s reported decision to alter its China policy with President Roosevelt’s alleged decision to abandon the “Stimson policy of sending nagging notes to Tokyo”.
Respectfully yours,