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

No. 3549

Sir: With reference to my despatch No. 3300, October 4, 1938,76 I have the honor to report that the Koa-in (Asia Promotion Board), which is the name finally decided upon for the central organ established to administer all affairs connected with China, has been officially organized. There are enclosed77 for the Department’s information the Embassy’s translations of the Imperial Ordinances for the official organization of the Asia Promotion Board and for the official organization [Page 432] of the affiliated offices as well as a list of the officials appointed.

The Board, organized under the presidency of the premier, is to administer during the China incident, with the specified exception of diplomatic matters, the following affairs:

Political, economic and cultural affairs which, in connection with the China incident must be managed in China.
Matters having to do with the establishment of policies in connection with the above affairs.
Affairs relating to the supervision of the North China Development Company and the Central China Promotion Company and to the control of Japanese businessmen in China.
Affairs related to the maintenance of unity among Government offices in their relations with China.

The vice presidents are specified in the ordinance to be the Ministers for Foreign Affairs, War, Navy, and Finance. A director general, to be accorded the treatment of an official of shinnin rank, is to be the general administrative officer. General Yanagawa has been appointed to this important position.

The general organization of this board largely conforms to that of former projected organizations which have been fully reported to the Department by various despatches, particularly my No. 3300, October 4, and there is little additional comment which can be made at this time. It may be, however, of some significance to point out the extensive preparations for the establishment of “affiliated offices” in China, a liaison committee for the purpose of facilitating unity in the policies of the various Government offices regarding China and the provision for the participation in the work of the Asia Promotion Board by Army and Navy officers on the active list, such officers to retain their active service standing. The strong position held by the military in relation to the Asia Board is evidenced by the appointment of General Yanagawa, General Suzuki, and other military officers to important positions. It is yet too early to predict to what extent the supervision by the Cabinet will be effective, or whether the scope of this Board may be broadened until it equals or surpasses a ministry in importance.

The progress in the organization of this central organ has been very slow, however, during the latter part of November, it was announced that the Cabinet had finally approved the proposed organization of an official organ for the control of relations with China and that the name to be adopted would be the Koa-in (Asia Promotion Board). On December 2, it was reported that the Privy Council had approved the draft plan, but at the same time had attached a statement of “its hopes” to the effect that the greatest consideration be given to the functioning of the Board, the selection of its personnel, and the relations between the Board and “local agencies”, and further [Page 433] that every care be taken to avoid friction with the diplomatic authorities. The Committee’s approval was followed shortly thereafter by the formal approval of the Privy Council and the Imperial Ordinances were promulgated on December 16. The Board reportedly began functioning immediately. While the Imperial Ordinance states that the Board is to function “during the China Incident”, a Government spokesman reportedly stated in reply to a question posed by the Privy Council Committee that the end of the China incident will be fixed by Imperial decision and that the Asia Promotion Board may exist even if the emergency is brought to an end. It is also obvious from various press reports of Government statements that the emergency will not be considered to have ended with the termination of active hostilities but that the necessity for such organizations as the Asia Promotion Board will continue until Japan’s policies and programs for a new order in East Asia have been realized. This has been interpreted by Government spokesmen to mean until the program for the reconstruction and development of China and the economic, political, and cultural cooperation of Japan, “Manchukuo” and China has been effected.

Respectfully yours,

Joseph C. Grew
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