894.34/237: Telegram

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

125. Subject, Japanese naval estimates.

The fourth naval replenishment program presented to the Diet on March 6 amounts to yen 1,674,142,000 and breaks down as follows: For warship construction yen 1,205,780,000; for perfection of marine and land equipment, which is assumed to be for naval bases and dockyards yen 188,321,000; for expansion of air force yen 300,041,000. The total sum amounts to an increase of nearly 50% over the third replenishment program (to be extended from 1937 to 1942) which amounted to yen 1,166,708,971 and will be applied over a period of from 5 to 6 years beginning with the fiscal year 1939–40.
Further comparison with the third replenishment program reveals that the fourth replenishment program provides for an increase of nearly 50% in warship construction; over 100% in naval bases and dockyards; and nearly 300% in the expansion of the Air Force. From the published figures it appears that no provision is made for refitting and modernization or for replenishment of naval stores; these items, it is assumed, will be taken care of under the third replenishment program which runs concurrently for 2 more years.
It is of course idle to speculate upon what these figures mean in the field of actual construction of warships. However, assuming the costs per ton of construction to be roughly twice as great as the estimated figures for 1933 (which were given out at that time when the second replenishment program was under consideration by the Diet) the present budget figures would permit for example the construction of two battleships, four cruisers, two aircraft carriers, eight destroyers and submarines. It must be reemphasized that the foregoing program of construction is wholly speculative and illustrative in character as Japanese naval plans are guarded with a secrecy remarkable in its effectiveness.
It can however be stated with some confidence—and the following represents the consensus of the opinion of the Naval Attachés in Tokyo—that the fourth replenishment program would permit construction at least equal to, if not greater than, that possible under the third replenishment program. This takes into consideration the considerable increase in the costs of construction (materials and wages) since 1937.
The Naval Attaché concurs in the foregoing and requests that a copy of this telegram be furnished to the Navy Department.