Foreign Relations of the United States Diplomatic Papers, 1938, The Far East, Volume IV

693.001/359: Telegram

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

Tokyo, October 15, 1938—11 a.m.
[Received October 15—10:30 a.m.]

670. Our 659, October 12, 2 p.m.

1. My British colleague informs me that his Government was much impressed by our note of October 6 to the Japanese Government³ relating in general to Japanese interference with American interests in China, the substance of which he cabled to London, and that the authorization which he then received to approach the Prime Minister on somewhat the same general lines as I had done on October 3 was a direct result of his Government’s favorable reaction. Craigie has lent me in strict confidence a copy of his telegram to his Government reporting his conversation with Prince Konoye on October 11, and since that document reports the interview in greater detail than was possible in our 659 and also since it reflects the present general atmosphere of Anglo-Japanese relations I think it is worth repeating to the Department in full as follows:

“Addressed to Foreign Office telegram No. 1178 of 11th October, repeated to Embassy, Shanghai number 944. I saw Prime Minister this afternoon and spoke as authorized in your telegram number 661, I added that there appeared to be two main causes of our difficulties—the British conviction that unfair discrimination was being used against them in China and the Japanese belief that we were affording concrete assistance to the Chinese Government in the prosecution of war. Having given instances of the discrimination of which we complained, I have said that we might hope to get the conversations on a higher level by avoiding recrimination about the past and concentrating on the future. I then referred to the conversations which had been proceeding in London before the outbreak of the incident and gave His Excellency the assurance that His Majesty’s Government were no less anxious now than 18 months ago to reach a fair and comprehensive general settlement between the two countries.

Prime Minister declared that although there had been two changes in the portfolio of Foreign Minister, the policy of the Japanese Government remained unchanged and in particular their determination to respect foreign rights and interests in China. In reply to observations I had made on Shanghai and the Yangtze questions, Prime Minister stated that delay in meeting our wishes in regard to the first was due to the need of maintaining order and, as regards the second, to the necessities of the military situation. It was His Excellency’s opinion that the two countries should cooperate for the future development of China and for the establishment of a lasting peace. There were in Japan elements unfriendly to Great Britain who desired to see our interests driven out of China, but the Japanese Government did not share these views and on the contrary wished to solve all these matters by friendly compromise. In response to a remark I had made as to the need of ‘fair play’ in dealing with British interests in China, Prime Minister said he was in full agreement that basis of our mutual policy should be fair play both as regards settlement of difficulties in China and in the wider sphere of Anglo-Japanese relations generally. As regards China he thought the main difficulty arose from the fact that this was a life and death struggle for Japan, whereas in foreign countries the matter was naturally viewed from a different angle. He concurred in an observation of mine that it was our duty in the calmer atmosphere of Tokyo to apply to the solution of these problems a more dispassionate analysis than was perhaps possible for our respective authorities in China. This would be his endeavor and he would study the questions at issue. I thanked His Excellency for this promise and suggested that he should direct his attention in the first place to the important questions of the northern Settlement area in Shanghai and navigation on the Yangtze. I touched briefly on the dangers of interfering with the present judicial machinery in the Settlement and begged him to believe that if we were unable at once to accept every Japanese proposal this was not through any lack of desire to cooperate but because sometimes the Japanese proposals were simply not practicable. Cooperation for maintenance of law and order implied a working together for a common end, not the forcing on one party of proposals favored by the other. I begged His Excellency to start from the premise that it was the sincere desire of the British authorities and the Municipal Council to do what was in their power to stamp out terrorism and anti-Japanese activities in the Settlement.

The Prime Minister said he fully accepted my interpretation of the word ‘cooperation’ and said he appreciated the need of pressing on with these questions as soon as possible. He thought our programme should be (1) the settlement as far as practicable of outstanding differences in China, (2) restoration of peace and, (3) general settlement Japan and Great Britain of all outstanding difficulties on the lines of the proposals under consideration before the outbreak of the present incident. Craigie.”

2. In a long talk with me last evening Craigie discussed what he considers would be the most profitable attitude of our representative [respective?] Governments in connection with our interests in China. First of all, he is convinced that whatever the precise outcome of the military campaign, Japan is in China to stay. Even if military reverses should occur and even if the Japanese Army should fail to reach and hold all the objectives at which it now aims, nevertheless the virility, determination and inherent strength of the Japanese nation and the continental policy which it has adopted lend certainty to the hypothesis that at least for the visible future we shall have to reckon with Japanese dominance over a considerable area of China. It is therefore the better part of selection in our own interests to approach this situation from a practical rather than from a purely theoretic point of view. In this respect, says Craigie, he differs from his own Government which in his opinion is too legalistic. He feels that nothing is to be gained and much is to be lost by legalistic intransigence; that method and manner of approach are all important, and that by adopting a friendly and conciliatory policy and by making such minor concessions as can be made without sacrificing important principles in dealing with the Japanese Government we shall, in the long run, be able to salvage something instead of losing everything.

3. Craigie has expressed these general views to his Government and has asked how far his Government is willing to go in following the conciliatory policy which he recommends. The British Government has replied that it desires to keep in step with the American Government as regards degrees either of opposition or of conciliation and has instructed Craigie to consult with me in shaping policy and action here, but on general lines he has been authorized to proceed with the Japanese Government as follows:

• “(a) Repeat that our authorities in China are prepared to receive and investigate any complaints or suggestions by the Japanese and will be willing to meet them short of doing anything legally improper or detrimental to China’s interests.
• (b) Repeat the offer of good offices as and when both sides desire them for promotion of a fair and lasting settlement between Japan.
• (c) Undertake, when hostilities cease, to afford what facilities we can to Japanese and Chinese alike in repairing damage and effecting economic reconstruction which will be necessary; and
• (d) Negotiate generally comprehensive settlement with Japan.

As regards the press, you might say that our feeling is that if the Japanese continue to ride roughshod over our rights and interests they cannot expect us to refrain from complaints or invite our press to desist from criticism: the Japanese have only to restore what they have taken and to refrain from further attacks on our interests and tone of our press will moderate itself. We do, however, do what we can to induce leading newspapers to refrain from use of unnecessarily wounding phraseology.”

4. Reference our 633, September 28, midnight.⁴ As a primary point for conciliation, Craigie feels strongly that some compromise must be worked out to bring about the return to the authority of the Shanghai Municipal Council of the northern Settlement. He points out that there was a reversion in 1911 to the former Consular Courts and believes that the same reversion could be put into operation now for the period of the emergency, under an arrangement by which the present judges would be retained and would act as assessors, thus preserving the practical advantages of the present system while obviating the Japanese distrust of subserviency to judicial representatives of the National Government. Craigie’s chief argument in this issue is that unless some compromise is soon reached which will bring about the return of the northern Settlement, the present situation may well crystallize in a way which will prevent such return at all. Here again Craigie feels that legalistic arguments ought to be superseded by practical considerations and corresponding action in meeting halfway the two Japanese conditions.

(This terminates the presentation of Craigie’s views as expressed in our conversation).

5. In appraising Craigie’s views as set forth above, the question arises in my mind whether there inhere to an equal degree in the respective American and British positions with regard to the situation in the Far East all the same and common factors. I do not refer, of course, to their common interests in principles of policy which are embodied in the Nine Power Treaty,⁵ but to considerations which spring from physical and material circumstances. Briefly stated, the points I have in mind are:

(a) Politically, it is the present declared intention of the United States in due course to withdraw from the Philippine Islands,⁶ its only territorial possession in Asia, whereas Great Britain envisages the permanent retention of its possessions in its area. The course which each of these nations must pursue toward Japan must, therefore, be formulated to a substantial degree by their long range objectives with regard to their respective territorial possessions in Asia;

(b) Economically, British investments in China are a part of the pointed British system of overseas investments which forms an essential element in the economic scheme of a nation which requires assured income from abroad to help offset unfavorable trade balance caused by inadequate food and other raw material resources. The protection of British investments in China, as elsewhere, is therefore one of the primary objectives of British policy;

(c) Commercially, it is British rather than American competition which especially concerns the Japanese.

6. We should also consider the fact that the respective positions of Great Britain and the United States in Japanese eyes are not at present identical. The present wave of anti-British feeling in Japan is intense and this must necessarily color the attitude and action of Japanese authorities. The attitude towards the United States of both Government and people in Japan is at present one of marked friendliness.

7. In the light of all the foregoing considerations, I am doubtful whether the British can completely concert their attitude with ours.

8. I do not cavil at Craigie’s opinion that the Japanese are in China to stay and that whatever assets we are going to be able to salvage from the general wreckage of our rights and interests in China, unless we are prepared to exert positive leverage, cannot be salvaged by legalistically controversial approaches. Regardless of its repeated assurances as to the maintenance of the Open Door and respect for foreign rights and interests in China, the Japanese Government will unquestionably be guided, both now and in the future, by practical rather that legalistic considerations. The Prime Minister’s use of the term “life and death struggle” in his conversation with Craigie is significant and correctly reflects the Japanese attitude toward the conflict in China and the aftermath thereof.

9. In my telegram 321, August 27, 1937, 4 p.m.,⁷ and in my letter dated September 15, 1937, to the Secretary⁸ I laid before the Department my views with regard to the course which should be followed by the United States in endeavoring to protect its rights and interests in China. These views have not changed. Although our approaches to the Japanese Government have not brought forth the results to which we are entitled, the discretion which the Department has given me with regard to the method of approach along with the attitude which our Government has taken with regard to the various issues created by the Japanese in China have placed the United States in a more favorable position to conserve its interests than have the methods employed by the British placed the British Government in a position to protect British interests. The method and manner of our approaches to the Japanese have constantly commended themselves to the Japanese Government. Whenever we have found it possible to reach a settlement on a practical basis, we have done so, perhaps reluctantly, but with good grace. At the same time, we have yielded none of our fundamental rights except temporarily and under unequivocal reservation.

10. Although entirely mindful of the desirability and need for coordinating action and policy with the British, I would be reluctant to see such cooperation conducted on the basis of our adopting present British methods.

11. I have expressed to Craigie my agreement with his thesis on general lines but have told him that I would communicate his views to Washington in order to elicit such affirmative or counter views or instructions as the Department may wish to express or to issue.

12. The question as to the use of “leverage” has been dealt with in previous communications from me. Financial or economic sanctions to compel respect for our diplomatic representations depend upon domestic considerations in the United States which we here are hardly in a position to gauge. Naval or military sanctions are highly unwise unless there exists behind them the determination to follow them up if necessary to their logical conclusion. Failing the use of positive leverage we had best continue to follow the policy pursued up to the present which has envisaged, so far as I can see, precisely the elements of attitude and method recommended by Craigie to his own Government.

Grew

3. Foreign Relations, Japan, 1931–1941, vol. i, p. 785.
4. Vol. iii, p. 305.
5. Signed at Washington, February 6, 1922, Foreign Relations, 1922, vol. i, p. 276.
6. See the Philippine Independence Act, approved March 24, 1934, 48 Stat. 456.
7. Foreign Relations, 1937, vol. iii, p. 485.
8. Ibid., p. 525.