Office of the Historian

693.001/445: Telegram

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

Tokyo, December 28, 1938—noon.
[Received 1:20 p.m.]

811. Our 805, December 24 [27], 9 a.m.80

1.
My British colleague has made available to me his telegram to London reporting his conversation on December 26 with the Minister for Foreign Affairs, of which the following is an outline:
(a)
Craigie left with the Minister for Foreign Affairs an informal paper based on and expanding his instructions, which are set forth in summarized form in paragraph 2 of our 795, December 20, 10 p.m.
(b)
Afterward, commenting on this paper, [Arita] stated that the British Government’s declared intention to examine sympathetically China’s request for financial assistance, and British desire to achieve an equitable settlement of the Sino-Japanese conflict were mutually contradictory. In view of the precarious position of the Chiang Kai Shek government and its inability to offer substantial security, any loan to China in the present circumstances assumed a political significance. Craigie insisted that the British credit extension to China was a purely commercial transaction, and that to refuse such commercial arrangements with China would be incompatible with the maintenance of neutrality.
(c)
The discussion with regard to the Japanese statements of policy involving the principle of equal opportunities in China were substantially similar to the discussion between Arita and myself.
2.
Craigie’s report of a discussion which was held on the point brought out in paragraph 6 of my 795, is as follows:

“His Excellency seemed particularly interested in my slightly elaborated version of paragraph 4 of your telegram No. 800 and admitted that Japan’s primary concern was to develop in China the raw materials of which she had special need and the trades connected therewith. I suggested that it should surely be possible to evolve some means of doing this without treading on anybody’s toes and with the willing assent of the Chinese Government. I still could not understand why His Excellency thought it necessary to spoil his case by threatening trade discrimination even though at the moment we were only being shown the thin end of the wedge. Mr. Arita would not admit that his instrument was a wedge and expressed hope that if I had any suggestion to make by which Japan could attain her legitimate needs without any departure from the principle of equality of opportunity, he hoped I would not hesitate to make it.[”]

Repeated to Chungking.

Grew
  1. Not printed; see memorandum of December 26, Foreign Relations, Japan, 1931–1941, vol. i, p. 818.↩