894.00/792: Telegram

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

335. Our 333, May 26, midnight.

There is little information available today to add to our estimate contained in the telegram under reference of the causes and purposes of the reconstruction of the Cabinet. There is general agreement in the press and in private circles that the Cabinet is now representative of all positivist elements.
The following additional information has been obtained today:
Although no specific reference has been made by the press to the forthcoming resignation of Sugiyama, it is now an open secret that he is to be replaced, probably by General Itagaki, although there is minority opinion that some other officer, perhaps General Koiso, will be appointed. General Umezu, now Vice Minister of War, is expected to leave office with his chief and to be replaced by General Tojo, one of the regional garrison commanders of metropolitan Japan.
We must correct one detail of our previous estimate. We had good reason to believe that Hirota was a member of the positivist group in the Cabinet, and we were therefore somewhat puzzled over his replacement. We were informed today by a Japanese diplomat who is very close to the militarists that Hirota was closely associated with Sugiyama on the question of prosecution of the China conflict, and that he was confident until a few days ago that the Sugiyama bloc in the army would be able to retain control.
There is no warrant for assuming that Ikeda will be the mouthpiece of big business although he is a man of acknowledged practical business experience. Informed circles confirm our understanding that he has become affiliated with those who favor national reconstruction in social and economic fields. However, according to the press, business has responded favorably to his appointment.
Ugaki, who has been the leader of an army faction opposed to that led by Araki, has accepted Japan’s China policy as a road on which there is no return. The opinion prevails that he has paved the way for eventually assuming the Premiership.
We understand that General Itagaki has no factional commitments, but that he is both a positivist on the China conflict and a reconstructionist on domestic issues.

Repeated to Shanghai for Hankow.