894.00/815: Telegram

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

636. Our 635, September 29, 8 p.m.

Decision was taken last night that Ugaki’s resignation be accepted and that the Prime Minister assume concurrently for the time being the portfolio of Foreign Affairs and also of Overseas Affairs. Konoye’s investiture in these two offices will occur this morning.
Sato and Arita, both former Ministers for Foreign Affairs, who were recently appointed advisers to Ugaki, have also resigned.
With the removal last night of the press censorship some light is now being thrown on yesterday’s developments which were totally unexpected. A detailed account of the discussions of the various plans with regard to the projected China Organ will go forward by pouch,17 but briefly stated the army insisted that the China Organ should be an indefinite agency, vested with authority not only to formulate policies vis-à-vis China but virtually to administer all parts of China under Japanese military occupation. Ugaki adopted at the outset the position of the senior officials of the Foreign Office, namely that the creation of an agency with such powers and having existence outside the jurisdiction of the Minister for Foreign Affairs would not only be unconstitutional but would render impossible the conduct of peaceful relations with countries having rights and interests in China. He insisted therefore that the proposed functions of the Organ be radically modified and that the Organ be brought within the organization of the Foreign Office. An official in the Foreign Office informs us that yesterday morning Ugaki, after a protracted discussion with his senior subordinates of a new compromise plan, indicated that he would bring the matter to a head at the conference of five Ministers to be held during the afternoon. It appears that at the conference he expressed flat opposition to the whole project, and then presented his resignation to the Prime Minister.
The press this morning roundly condemns Ugaki for divers reasons, but all the papers agree that, following the reorganization of the Cabinet in June, the need for political stability and unity at home transcended all other considerations.
Our provisional comment is that the basic cause for this crisis in the Cabinet is the cleavage of opinion among Japanese leaders, manifested in the resignation of Hirota and General Sugiyama from the Cabinet, over the question of what shall be done with China. The declaration of January 16, that Japan has “ceased to deal with the Nationalist Government”, like Banquo’s ghost continues to harass the extremists.

Repeated to Peiping and Chungking.

  1. Infra.