793.94/14642: Telegram

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

41. My British colleague has received following information from a source75 which he considers both trustworthy and well informed:

Informant had been much struck with marked change in the attitude towards currency question of both Japanese Army officers and businessmen which he had noted in Shanghai on the occasion of a recent visit as compared with a visit some months earlier. On the earlier occasion the belief seemed to prevail that undermining of the Chinese national currency should definitely be a Japanese objective, but now there seemed to be a general agreement that on the contrary it was now Japan’s interest to see the value of the currency maintained at least at its present value. He had also noticed a tendency of the Japanese to consider that the Yangtze River question should be settled by means of business arrangements between the private interests concerned. The main difficulty was the fear of the Japanese officers and businessmen that, once foreign shipping had been admitted, the Japanese ships would run empty; one way of avoiding this would be a profit sharing arrangement which would guarantee Japanese shipping against losses due to purely political circumstances. The profits would be shared pro rata according to the amount of commercial tonnage operating on the river.
Informant found these tendencies encouraging and believed there was now a more genuine realization in Central China that Japan could not expect to exploit these vast areas purely in her own interest.
Informant did not appear to regard the Hiranuma Cabinet76 as a strong one and suggested that they themselves had little idea as to [Page 356] the real meaning of the “new order” in East Asia. Certainly informant had been able to obtain no guidance as to how these vague generalities were to be translated into concrete measures for the promotion of Japanese trade. He did, however, imply that we must expect a more aggressive promotion of Japan’s new policy of economic expansion in the north than in the center or south. Informant was doing his best to persuade Arita, who was a personal friend, of the importance of conciliating the foreign interests concerned, but latter was, of course, under great pressure from other and less friendly quarters.
The foregoing observations, as reported to me, lack precision but they at least indicate the way in which the wind appears to be now blowing in Central China.

  1. Kenji Kodama, Japanese head of the Central China Promotion Company.
  2. Baron Kiichiro Hiranuma became Japanese Prime Minister on January 5.