751G.94/19: Telegram

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

676. My 672, August 7, 10 p.m. From an authentic source, who asks that the information be not attributed to him, I learn the following background and facts concerning the Japan–Indochina situation.

For about 3 weeks in June and July, cut off from communication with the French Government the Governor General of Indochina carried on conversations with Major General Nishihara, chief of the Japanese Commission to Indochina, who is characterized as an officer of high character and reasonable outlook. On July [apparent omission] General Nishihara was recalled to Tokyo to report.
[On July?] 27 General Nishihara was temporarily replaced by Colonel Sato, Chief of Staff of the South China Army, who is known as an extremist. Colonel Sato made certain military demands on the Governor General which the latter stated he was unqualified to discuss and said that they would have to be referred to the French Government at Vichy. These demands were similar to those given in the Department’s 293, August 6, 1 p.m.24
At the beginning of August the French Ambassador in Tokyo was called to the Foreign Office where the Foreign Minister informally conveyed to him the same demands, namely the right to transport troops and to use air bases (nothing was said as to naval bases) in Indochina as a matter of military necessity. Mr. Matsuoka also emphasized the fact that Japan is particularly interested in Indochina from an economic point of view and is desirous of obtaining a “special position” therein.
The French Ambassador replied that presentation of demands directly to the Governor General by the Japanese Commission was inadvisable, he would nevertheless refer to his Government the demands presented by the Minister for Foreign Affairs.
On August [apparent omission] the French Ambassador called on the Foreign Minister and stated that the French Government was prepared to discuss economic questions with the Japanese Government but was not in a position to make the military concessions asked by Japan. In that interview Mr. Matsuoka appeared to be “quite friendly” but stated that the measures which Japan demanded were necessary first of all for the military operations in China and secondly for the increased economic stability of greater East Asia. The Minister suggested that the conversations looking to the implementation of these measures be held in Tokyo but the French Ambassador felt that owing to the adverse atmosphere in Tokyo it would be preferable to hold them in Indochina. General Nishihara has returned to Hanoi. The Ambassador has referred the matter to Vichy and is at this moment awaiting further instructions.
While the door for further discussions has, therefore, been left open, it is inaccurate to say that the French Government has in principle accepted the Japanese demands.
In the meantime negotiations for an economic barter agreement are being conducted in Indochina.
It is obvious that if invaded by strong forces Indochina has not sufficient strength to defend itself and would be obliged to yield.