793.94119/440: Telegram

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

539. My 534, August 15, 9 p.m.

In my talk with Craigie today the question of response to good offices was fully discussed along the lines of your 285, August 12, 7 p.m.
Craigie said that he fully concurs in the analysis presented in our 510, August 2, 10 p.m. He does not propose at the present time to make to the Foreign Minister an offer of good offices and I gather that he will not now approach our German colleague.
The Foreign Minister has twice in conversation with Craigie referred to the statement of the British Prime Minister in Parliament that Great Britain were ready to offer good offices if both sides so desire. General Ugaki said that the moment for such an offer was not opportune. He remarked that Chiang Kai Shek himself is not intensely anti-Japanese but that he must bear the responsibility for the intensive anti-Japanese propaganda in the schools and elsewhere and that until he undergoes a conversion the Japanese Government cannot deal with him. Craigie interprets this as meaning “until the Generalissimo breaks with the Communists.” Nevertheless Craigie feels that Ugaki’s approach to this subject twice on his own initiative emphasizes the importance of “keeping the door open” for an eventual offer of good offices when the time appears opportune. Craigie believes that such a moment may arise after the fall of Hankow because he feels that even the army, after it had achieved that outstanding victory, would welcome an opportunity to retire from that area.
In view of the foregoing considerations Craigie proposes in his interview with the Foreign Minister tomorrow afternoon to approach the subject by inquiring whether any importance can be attached to certain observations made by Tani64 in Shanghai after his recent return from Tokyo. Since his return Tani has seen a number of leading British business men and has been at great pains to impress on them the Japanese desire to improve relations with the British. He has given the impression of being very frank and outspoken. Regarding the policy of the Japanese Government he has said that:
  • “(a) They are now ready to make peace with Chiang Kai Shek but on condition that he breaks completely with the Communists;
  • (b) Japan is determined to have a special area in Inner Mongolia recognized as such by the Chinese, run by Japanese military possibly on the lines of Manchukuo;
  • (c) Apart from Inner Mongolia Japan has no territorial ambitions: she is willing to recognize Chinese sovereignty over the whole of the rest of China, but must have a voice in the affairs of North China and for that purpose wants Japanese advisers appointed to various offices;
  • (d) Central China to be completely independent of Japanese or other foreign influence with all (sic) open door, equal opportunity for all. Japan has no demands to make about Central China except that she must agree to a wide demilitarized area around Shanghai;
  • (e) Wishes the customs and other national services to be maintained.”
It appears that Tani conveyed the impression that while Japan would demand recognition of “predominant interest” for Japan in North China and freedom from Japanese “or other foreign influence” in Central China, it would be understood that Great Britain or France (sic) might properly claim predominant interest in South China, Craigie observed that this plan of course visualized a return to the old system of spheres of influence. (It is to be noted that, somewhat naively, Craigie did not mention the United States in this connection.)
Craigie says that on Thursday morning he will tell me the result of his interview with Foreign Minister which I shall report to the Department.

Repeated to Hong Kong with request that Hong Kong forward code text to Ambassador Johnson in Chungking by air mail.

  1. Japanese Minister at Large in China.