894.00/797: Telegram

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

399. 1. Further intelligence and observations enable us reliably to extend as follows the estimate of the recent reconstruction of the Cabinet contained in our 333, May 26, midnight and 335, May 27, 6 p.m.67

2. The Prime Minister and certain other members of the Cabinet had long realized that if progress were to be made in bringing the China campaign to a successful conclusion and in consolidating Japan’s position in China without serious friction with Great Britain and the United States, the control of all but purely military affairs must be taken out of the hands of the military and lodged in the civil part of the Government.

3. Hirota68 fell because he was paradoxically too weak in opposing certain demands of the army while at the same time too intransigent in insisting that the Foreign Office which is unpopular with the army must control Japan’s foreign relations concerning China. By way of compromise the authorities are now in process of setting up the so-called “China Organ” which is to consider political, economic and other non-military affairs relating to China.

4. Ugaki and Ikeda accepted office69 only on condition that the control of political and economic affairs in connection with China should be taken out of the hands of the military. This coincided with the views of Prince Konoye and further explains the appointment of [Page 200] General Itagaki as Minister of War because he possesses the confidence of the younger officers in the army and at the same time believes that the army should stay out of politics and should attend exclusively to its duties as an efficient fighting machine.

5. Both Ugaki and Ikeda realize that the solution of Japan’s problems in China will be difficult unless good relations are maintained with Great Britain and the United States. Ugaki therefore proposes to do all in his power to ensure the protection of the respective interests of those and other foreign countries at least to the extent of reducing friction to a minimum.

6. With regard to economic affairs the purpose of the setting up of the North China Development Company and the Central China Promotion Company is to take these matters also out of the hands of the military. It is intended that these companies shall function under the general direction of the “China Organ”.

7. With reference to point 5 above we have recently seen indications of Ugaki’s desire to remove causes of friction with the United States in connection with American interests in China. Having in mind the arbitrariness of the army and navy it is hardly to be expected that the Foreign Minister will be able to accomplish this desirable end rapidly or completely. Nevertheless while omitting no proper step ourselves and while continuing to make official representations as specific cases and developments arise, I have felt it desirable to avoid bringing early pressure to bear on the Minister while closely watching the working out of his efforts. I have therefore confined our recent representation to interviews with the Vice Minister and other officials of the Foreign Office with the idea of “saving ammunition” for an eventual frank discussion with Ugaki on the whole field of American interests in China along general lines.70 I believe that this procedure will add weight to such an interview when it takes place. I see no good reason why such an interview should not take place in the near future and suggest, if the Department concurs, that an up-to-date outline of American desiderata be cabled me for use at an opportune moment. The Embassy is presumably in possession of all or most of the data which might be used for such an interview but I feel that an instruction from the Department would be helpful in indicating the specific issues which should be brought forward in such a general discussion and the relative emphasis to be placed upon them as reflecting the views of the American Government. This telegram is being repeated to Mr. Johnson who may desire to submit comments to the Department.

Repeated to Shanghai for Hankow.

  1. Vol. iv, pp. 599 and 601, respectively.
  2. Former Japanese Minister for Foreign Affairs.
  3. As Ministers of Foreign Affairs and of Finance, Commerce and Industry, respectively.
  4. See also vol. iv, pp. 1 ff.