Memorandum by the Chief of the Division of Far Eastern Affairs (Hamilton)

The hostilities between China and Japan which developed from an incident near Peiping on the night of July 7 are now entering into their [Page 597] fourth month. The Chinese have shown a unity and a determination which has surprised the Japanese, and the Japanese have not been able to win, as they desired and anticipated, a quick and decisive victory. The hostilities are proving costly to both China and Japan, especially so to Japan, for China’s economy is still so essentially primitive that disturbances affect it less keenly than is the case with a more highly organized economic system.

Militarily, Japan has already gained substantial military control of the four northern provinces of Hopei, Suiyan, Chahar, and Shansi, and Japanese troops have already pushed down into northern Shantung. It seems reasonable to conclude that Japan’s military objective in the north has been in large part attained. The Chinese may, however, offer determined resistance on the line of the Lung–Hai Railway. At Shanghai, the fighting continues to be severe. The Japanese are, however, slowly pushing the Chinese back.

Should the Chinese suffer further substantial defeats in the north and/or should they be forced to withdraw from Shanghai, it is impossible to predict with any degree of accuracy what the effect on Chinese morale would be. The answer hinges upon a psychological factor: has the development of a national consciousness in China during the past few years, accelerated as it has been by the resentment and bitterness resulting from Japanese aggression, disciplined China’s soul sufficiently to give China a firm resolution to continue the hostilities, or will the age-old Chinese habit of compromise come to the fore? Probably no Chinese Government can or will sign an agreement with the Japanese Government recognizing Japan’s gains, but Japan can as it has in the past cause to be set up in the conquered territory new administrations independent of the Chinese Government. Regardless of whether Japan can within the next few months push her campaign in China to a decisive conclusion or whether the hostilities will continue for an indefinite period, Japan’s energies will be subjected to an increasing strain. The administering and pacifying of such a large area with a huge Chinese population will present tremendous difficulties. If active hostilities continue the drain on Japan’s resources will be a heavy one.

In the diplomatic field, the League of Nations and the United States have announced conclusions to the effect that Japan’s action in China is in contravention of the provisions of existing treaties. It is believed that such announcement will have no immediate deterrent effect upon Japan but will tend rather to harden Japan’s determination decisively and quickly to defeat China. In Japan’s present mood it seems highly improbable that any proposal by the interested powers or by China that an armistice be declared would be accepted by Japan at this time. If that estimate is correct, there is then raised the question [Page 598] whether restrictive action by the powers directed at Japan would be advisable.

It seems to me that restrictive measures to be effective must be thorough-going and should be applied in the incipient stages or in the later stages of a controversy. If they are not thus applied, are they not more likely to serve as an irritant than as a deterrent and to cause the country against which they are directed to intensify its efforts at aggression? In the present case of hostilities between China and Japan, it seems to me that there is no likelihood of there being adopted thorough-going measures of restriction, and Japan’s present adventure in China has moved far beyond the incipient stages. That adventure has not, however, yet reached a stage where Japan has been seriously weakened or even begun seriously to feel the strain.

The experience of the last few years in the adoption of restrictive measures by the nations of the world indicates clearly that some one nation has always taken the lead and become the spearhead of the restrictive movement. In the Italian-Ethiopian affair, Great Britain assumed that position. Other powers were willing to go along with Great Britain because Great Britain was in the van and thereby assumed the major risk. In the present situation, Great Britain and France are so preoccupied with the European situation as definitely not to be willing to assume a leading position among the nations in the adoption of restrictive measures against Japan. The Soviet Union is so preoccupied internally and also with the European international situation as not to be in position to assume a position of leadership. The League of Nations has studiously avoided any step which would seem likely to bring about the imposition of sanctions under the League Covenant. There then remains only the United States. Should this country become the spearhead in leading a movement among nations in restrictive action against Japan? It is believed that the assuming of such a position by any country would bring that country face to face with a very real hazard. It is also believed that if no nation is willing to assume leadership in a program of restrictive measures, probably nothing very effective would or could be done. It seems to me that public opinion in the United States is definitely opposed to the United States assuming a position of leadership in the imposing of restrictive measures directed at Japan. Moreover, it should be borne in mind that if restrictive measures should take the form of economic “sanctions”, the United States would be called upon to carry the heaviest burden—for the trade of the United States with Japan is almost twice as large as the trade with Japan of all European countries combined (excluding India and the possessions in the Pacific of European countries).

Inasmuch as no substantial restrictive program appears to be feasible, it is suggested that the American Government might use its [Page 599] influence toward causing the interested powers to approach the problem in the Far East essentially from a constructive rather than a restrictive point of view. The tensions and strains in the Far East so far as they relate to Japan result primarily from two factors: (a) Japan’s desire for economic security (access to raw materials and an outlet for her manufactured goods); and (b) Japan’s fear of other countries, principally Soviet Russia, and communism. If some program could be worked out which would give Japan a reasonable prospect of economic security and which would remove Japan’s fear of communism and attack from the Soviet Union, there would be removed some basic elements in the situation responsible for Japan’s present imperialistic program. In the economic field, an arrangement might be worked out which would give Japan readier access to and a greater share of the Chinese and other Far Eastern markets and resources. This might be done through bringing about a lowering of import and export duties on items of special importance to Japan without, however, setting up preferential rates in favor of Japan. In the political field, some arrangement might be worked out which would lessen tension along the Siberian border. Also, in Inner Mongolia there might be set up an administration along the lines of the administrative system recommended in the League Assembly report of 1933 for Manchuria:9 China’s sovereignty would be recognized but the area would be administered in such a way that it would constitute a buffer region between the Soviet Union and China proper, thus tending to prevent the infiltration of communism from the Soviet Union into China.

The basic problem today appears to be two-fold: (1) to remove the basic causes of Japan’s dissatisfaction; and (2) thereby to undermine the hold which the military now has on the Japanese nation.

In the light of the foregoing, it is suggested that the most realistic and practicable procedure for the United States (and for other governments) would be to devote their primary attention to the evolving of constructive measures, to present those measures to Japan (and to China), to anticipate that Japan probably will not at present be willing to consider those proposals, to be prepared to keep those proposals open until a time (which may come within the next three to six months) when Japan will have found through experience that the attempt to conquer and to administer further large sections of the Chinese Republic is costly, unprofitable and contrary to Japan’s own best interests. When that day comes, the people of Japan will have begun seriously to question the dominance of the Japanese military in the life of the Japanese nation and there will be some prospect that the Japanese Government and nation would be willing to attempt [Page 600] in consultation with and with the assistance of interested powers to work out a basic program of stability and peace in the Far East. Such a program would give practical application in the Far East to the principles of policy set forth in the Secretary’s statement of July 16.9a

Pending arrival by Japan at a state of mind which will make negotiation of peace possible, it is believed that the Government of the United States and other interested governments should continue to keep alive their belief in the fundamental principles of policy which in our opinion should govern international relationships. In so doing, effort should be made to make clear the fact that what the United States and other countries oppose is not Japan but warfare—with all its attendant evils and destructive consequences. We should also continue to adopt an attitude of non-cooperation toward and of disapprobation of Japan’s military gains.

The American Government might go along with other nations—but not take the lead in so doing—in adopting such minor restrictive measures as may be decided upon by other powers. Probably, such measures would not be of a very drastic character. In order to gain the support of the United States, such measures would probably have to fall broadly within the compass of the United States Neutrality Act. And it seems to me that such restrictive measures should be conceived of as, and fall within the scope of, measures symbolic of our moral disapprobation of Japan’s course of action and should not be in the nature of “penalty” measures.

There is one substantial risk which would be involved in connection with the presenting to Japan within the near future of a proposal that Japan agree to negotiate peace along the lines suggested hereinbefore. Should Japan refuse such a proposal, as seems to the writer of this memorandum highly likely, that fact might make very difficult any future consideration by Japan of such terms.

M[axwell] M. H[amilton]
  1. See League of Nations, Official Journal, Special Supplement No. 112, pp. 56, 75.
  2. Vol. i, p. 699.