793.94119/470: Telegram

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

802. 1. We are informed by Associated Press and United Press that they have already telegraphed to the United States the complete text of the statement issued last night by the Prime Minister.71

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2. With one exception, the papers vie with each other in commending the “moderate and magnanimous” character of the Japanese peace terms, which are summarized as follows:

(a)
China’s recognition of Manchukuo;
(b)
Conclusion of Sino-Japanese agreement to combat communism which would grant Japan the right to station troops in specified parts of China and would designate Inner Mongolia as a “specified anti-communist area”;
(c)
Economic cooperation between Japan and China, including the “freedom of residence and trade on the part of Japanese subjects in the interior of China” and “China should extend to Japan facilities” for the development of natural resources “especially in the regions of North China and Inner Mongolia”.

It is generally agreed that these peace terms, along with disclaimer of intention to demand indemnity from China and to seize any part of China, should effectively convince the United States and Great Britain that “the lawful activities in China of third countries which recognize the new order in East Asia will not in any way be restricted” (Yomiuri). The Kohvmin Shimbun, however, deplores failure to set forth in the statement details of ways and means by which the Japanese peace conditions are to be carried out, and it is concerned lest the full expectations of Japan be misunderstood. It stresses that the basic principle of the “new order” policy is to eradicate completely those “conditions which place China under European and American dominance”, and it hopes that this point will be emphasized in subsequent official statements.

3. The possibility of the Japanese Government having been influenced in the direction of moderation, by adverse reaction abroad to Japan’s economic defense program, is indirectly suggested in a feature article in the Nichi Nichi, which states inter alia:

“It is believed that last night’s statement will be effective toward removing the necessary fears of third countries with regard to their economic interests in China. The Government will accordingly profit by every opportunity and will use every means to assure these powers, and of course China, that Japan will endeavor to bring about a settlement of the conflict on the basis of the terms set forth in the statement.”

4. Our own comment on this statement, as on other recent Japanese utterances, is that, being couched in too general terms and hedged about with qualifying clauses, it commits Japan to nothing specific. We believe that it has been thus framed to permit Japan all possible latitude to move as circumstances warrant. The peace terms, as such, are not new and, in the absence of a concrete plan for implementation, cannot be appraised. It will be, of course, the guarantees which will be demanded from China for the latter’s observance of these terms, that will actually define them.

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5. The question, to whom is the statement addressed, naturally arises. We do not believe that it was addressed primarily to the Chinese Government, although it might be supposed that it was formulated partly with an eye to encouraging those elements in the Chinese Government which are reported to be weary of the conflict. Again, it was probably intended to provide a means by which the regimes in China might observe the proprieties in accepting the Japanese terms. However, it would seem to us that the audience which the Japanese Government had chiefly in mind was the United States and Great Britain. The moderate language of the statement and the tone of the press comment both suggest that the statement was intended as an invitation to these countries to explore ultimate Japanese intentions.

Repeated to Shanghai for Chungking and Peiping.

Grew