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

No. 2727

Sir: Enclosed with this despatch are copies of translations as published in the Japan Advertiser of the public messages released on January 1 by Japanese officials,2 in accordance with the prevailing custom of new year pronouncements.

All the messages maintain a tone of optimism. Most put in a word for renewed exertions by the nation, and some forecast 1938 as a year of great importance in the destinies of Japan.

Premier Konoe speaks with a sense of impending renaissance, changes in 1938 more significant than the Meiji restoration period or the Russo-Japanese war. He says that Japan’s effort is to help China recover from degeneration, and that nothing short of such recovery is vital to Japan’s own security. There is probably a warning of further government control when the Premier states that Japan must more fundamentally mobilize the whole strength of the whole nation for the objectives of the state. In discussing China he holds out an invitation to a new régime. He asserts that responsibility is keenly felt for mishaps to British and American vessels on the occasion of the fall of Nanking.

The Foreign Minister calls attention to the Sino-Soviet non-aggression pact3 as a political guarantee of continued supplies to China of Soviet munitions. He expresses pleasure over the amicable settlement of the Panay incident, and anticipates continued friendship with the United States as a good neighbor. Mr. Hirota expresses gratitude for the friendly attitude of Germany and Italy, and soft-pedals the anti-comintern accord4 by ascribing its significance to cultural relations. He speaks with favor of Italian recognition of “Manchukuo”, [Page 586] and of exchange of notes of recognition between “Manchukuo” and the Franco régime in Spain.

The Home Minister, Admiral Suetsugu, glorifies the victories in China and admonishes preparation for protracted war, asserting that the international situation confronts Japan with difficulties in the years ahead.

Finance Minister Kaya speaks as if pleased with the results of emergency financial measures thus far and pleads for diminution in popular consumption.

The message of Mr. Yuki, the governor of the Bank of Japan, has more to say than Mr. Kaya’s. Although finding the operation of emergency measures satisfactory he points out that more money was put in circulation by the government in 1937 than in 1936, and that in 1938 the sum must be larger still. He admits that absorption of government bonds has not been fully satisfactory, he favors maintenance of the foreign exchange rate, and he anticipates that the coming year, though not one of panic, will be one of recession.

Mr. Yoshino, Minister of Commerce and Industry, states that Japanese imports for eleven months through November exceeded exports by ¥650,000,000 and that the adverse balance in 1938 will be worse. He urges economy in consumption while keeping open the importation of essentials, and in general betrays no great concern for the present condition of the country.

The Minister of Agriculture and Forestry gives himself particularly to exhorting the rural population to continued sacrifices. He is however frank enough to indicate that in rural districts the people are beginning to feel shortages in labor, agricultural machinery, fertilizers, fodder, and oil.

New year messages would ordinarily be optimistic rather than otherwise, but even making full allowance for this natural bent it still remains unlikely that the dominant views of the officials of the government are other than those expressed. The nation is confident. Hostilities in China have progressed rapidly and successfully, and the serious economic load necessary therefor has been borne with very little domestic hardship. It is in the country districts that the burden will in all probability fall with the greatest impact, but that effect can be deferred for some time, and has not yet become a pressing problem. Two convictions appear to prevail among the people and among the men in office: first, that Japan is at grips with problems of prime importance in the country’s history; and second, that the nation is equal to the task.

Respectfully yours,

Joseph C. Grew
  1. None reprinted.
  2. Signed at Nanking, August 21, 1937, League of Nations Treaty Series, vol. clxxxi, p. 101.
  3. See Foreign Relations, Japan, 1931–1941, vol. ii, pp. 153 ff.