894.00/693: Telegram

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

52. Embassy’s 43, February 6, 11 a.m. Two appointments of significance were made yesterday:

General Nakamura has resigned as War Minister because of illness (apparently real) and last night General Hajime Sugiyama, Inspector-General of Military Training, was appointed as his successor. Sugiyama has a stronger character, is better known, and enjoys the confidence of the army to a greater extent than Nakamura. He has had wide experience both at home and abroad and has successfully held important posts in the army organization. He is an advocate of an augmented military machine. His appointment will undoubtedly strengthen the military influence in the Cabinet and on the other hand will enhance discipline within the army. The Cabinet will be strengthened by the acquisition of Sugiyama but as he will probably insist upon the approval of the proposed military budget the Cabinet’s financial difficulties will not be lessened. Sugiyama was succeeded as Inspector-General of Military Training by Terauchi, former War Minister.
Fukai resigned on the 8th as Governor of the Bank of Japan and yesterday Seihiu Ikeda, formerly managing director of the Mitsui Organization, was appointed as his successor and Juichi Tsushima, formerly Vice Minister of Finance and Financial Commissioner at New York and London, was appointed Vice Governor. Both are well known to American financial circles. It is reported that Ikeda will follow a more positive policy of cooperation with financial and industrial circles than did Fukai who was regarded by financiers here as more of a scholar and theorist than a practical banker. The appointments of Ikeda and Tsushima are welcomed by financial circles in Japan which believe that with Yuki a strong triumvirate [Page 710] has been formed which while giving all possible assistance to industry will be able to steady the disturbed financial situation in Japan.

Repeated to Nanking by mail.