Chapter IV
The Military Domination of Japan and Preparations for War

The Lukouchiao Incident Was Instigated by the Army

The incident at Lukouchiao, was the culmination of the Army's scheme for bringing North China under Japanese rule. In May 1935 KIDO had noted the determination of elements within the Kwantung Army that the military should take the lead in dealing with North China, as they had done in the case of Manchukuo. In December of that year the Kwantung Army had despatched to


the War Ministry a propaganda plan made in contemplation of that Army's advance into China proper. in the following month HIROTA, as Foreign Minister in the Okada Cabinet, has established the policy of diplomatic cooperation with the soldiery in carrying out the Army's plans for North China. The opening battle of this phase of the war in China, like the Mukden Incident, which had led to the conquest of Manchuria, was planned, instigated and carried out upon the initiative of the Army itself.

Less than a month before the fighting began, Lieutenant-General TOJO had placed the issue of peace of war squarely before the Army General Staff. As Chief-of-Staff of the Kwantung Army, he believed that the moment was propitious for an offensive against the Chinese government's forces; and that such a campaign should precede the initiation of a war with the Soviet Union. Whether or not Japanese military strength warranted the taking of such a step was a question of larger strategy to be decided by the General STaff.

The decision was a momentous one, for the long-range economic and military planning, u-on which the War Ministry was even then engaged, took no account of an immediate embroilment in China. All the factors in this complex situation must have been known to Lieutenant-General UMEZU, who had for the fifteen previous months occupied the position of Vice-Minister of War. The manner in which the first outbreak of fighting was permitted to assume the proportions


of a full-scale offensive shows that the Army General Staff had made its election in favour of a war with China.

On the night of 7 July 1937, Japanese garrison troops at Lukouchiao held an unusual manoeuvre; and, alleging that a Japanese soldier was missing, demanded entry into the City of Wanping to conduct a search. Fighting broke out while the Japanese complaint was still under negotiation; and, on the afternoon of 8 July 1937, the Japanese issued an ultimatum for the surrender of the City. In the battle which ensued, the Japanese forces sustained substantial casualties; and, on 10 July 1937, a truce was agreed to upon the proposal of the Japanese commander.

The incident might then have been regarded as closed; but that was not the Japanese intention. Within twenty-four hours of the initial conflict, large units of the Kwantung Army began to converge upon the scene of the fighting. Reinforcements having reached North China, new demands were made for the withdrawal of Chinese forces. On 13 July 1937, the Army General STaff decided that, if Chinese troops were sent to North China, resolute steps would be taken to meet the situation. In default of compliance with the new Japanese demands, fighting was resumed at Lukouchiao upon the following day.


The First Konoye Cabinet Adopts the Army Policy
of War With China

Although the Army had chosen the time and place for the attack, war with China was a foreseen consequence of Japanese national policy. In February 1936, while Hayashi was Prime Minister, it had been decided to establish North China as an anti-Soviet buffer state, and to include it in the Japanese-Manchukuoan economic bloc. Now, in the months which followed the first onset at Lukouchiao, government and Army worked together, in the words approved by the Five Ministers on 11 August 1936, to achieve "a steady footing on the Asiatic continent", and "to become the stablizaton power in East Asia".

When the first news of fighting was received, the Cabinet had resolved to seek a local settlement of the matter; but had not countermanded orders for the movement of further troops to the area. Two days later, on 11 July 1937, the Cabinet, of which HIROTA and KAYA were members, reconsidered the situation which had arisen. Afterwards there was issued an official statement to the effect that the Japanese government, though anxious to maintain peace and order in North China, intended to take all necessary measures for despatching troops to that region. Mobilisation within Japan itself was postponed; but units of the Kwantung Army were permitted to continue


their advance. Simultaneously steps were taken to send to North China new diplomats and consular officials, who now once more came under the control of Foreign Minister HIROTA. A new Chinese offer to submit the quarrel to negotiation and an American tender of good offices, both of which followed the resumption of fighting, were alike unheeded. Although direct negotiation continued, preparations for an Army mobilisation within Japan went forward uninterruptedly after 17 July 1937, and received specific governmental sanction.

On 26 July 1937, a new Japanese ultimatum led to fighting at Peking; and on the following day Prime Minister Konoye revealed in the Diet his government's determination to achieve the "new order" in Asia. he protested, as other government spokesmen had protested before the conquest of Manchuria, that Japan did not covet Chinese territory. he said, in the language of the advocates of the Greater East Asia Sphere, that all Japan looked for was cooperation and mutual assistance -- a contribution from China to Far Eastern culture and prosperity. He added, more significantly, that he did not consider it sufficient to settle locally existing problems with China. Japan, he declared, must go a step further, and obtain a fundamental solution of Sino-Japanese relations.

It was then clear that the Cabinet had resolved the same conclusion as th Army General Staff; and that Japan was irrevocably committed to the conquest of China.


The Relationship Between Preparations for War
and the Conquest of China

It is important to note that this decision was not merely in furtherance of the basic national policy; but that it also added an element which was lacking in the decision of the previous year. The Five Ministers, with HIROTA at their head, had decided that Japan would at all costs expand upon the Asiatic continent. They had realised that this process of expansion would make enemies of the Western Powers, and would render war with the Soviet Union almost inescapable. They had recognised that nothing short of mobilisation for war on a national scale over a period of years would enable Japan to meet the consequences of her expansionist programme. But they had not determined at what stage in the programme of preparations it would be expedient to make a new major onslaught upon Chinese territory.

TOJO had assumed the conquest of China would be a minor affair, incidental to the coming trail of strength with the Soviet Union; and later events showed that the Japanese cabinet also had underrated Chinese powers of resistance. In September 1937, Foreign Minister HIROTA was still speaking in terms of a quick punitive blow against the nationalist armies. Furthermore, the whole area of North China was included in the plans for war-supporting economic and industrial development, and was therefore necessary to the success of the national mobilisation itself.


The essence of the decision which Konoye's government made was that the dangers of prematurely intensified international hostility did not outweigh the advantages already enumerated. The very circumstances in which this fighting in China broke out show that the conquest of China was regarded as ancillary to the programme of preparation for a greater struggle.

The Relation of the Fighting in China
to the "Principles" of Kodo and Hakko Ichiu

This was, in later years, the view taken by the foremost Japanese publicists, who related the progress made upon the Asiatic continent to the earlier planning of the "new order", and to the principles of Kodo and Hakko Ichiu.

SHIRATORI, in a book published in December 1940, said that the classic phrase of Hakko Ichiu had been adopted as a national slogan to represent this movement, the ultimate object of which would be the establishment of a "new order" in East Asia. The conflict, both in Manchuria and in China, had represented the spirit of the "Imperial Way", and was directed against the democratic viewpoint. He added that the war between Germany and the Western Powers might be said to have arisen from essentially the same conflict.

Yosuke Matsuoka, when Foreign Minister in 1941, gave a similar description of his country's


development. He denied, as Konoye and other statesmen had consistently denied, that Japan had desired to acquire new territories or to exploit other countries. He said that the Manchurian Incident was an exultation of the national spirit, which had, in a way, been caused through the oppression of Japan's peaceful development by America and the European Powers.

He told his audience that Japanese diplomacy must play an important part in spreading the great spirit of Hakko Ichiu throughout the world. In executing her national policy, Japan would need to remember that she was a divine country which must go forward in accordance with the divine will. This, and no material constraint, had been the reason for the "China Incident".

HASHIMOTO, who published a new book in the same month as SHIRATORI, was even more explicit. He said that the "China Incident" might well be called the opening battle for the construction of a "new world order"; and that the achievement of that order was incompatible with any compromise with Great britain and the United States. The China War he described as "a grand revelation of national polity".

He urged then, in December 1940, as he had urged in August 1936, that the whole force of the nation should be united in the principle of Kodo which would make possible the achievement of the goal of world domination or Hakko Ichiu. The crisis of the European War would, he said, be turned into a golden opportunity, enabling Japan to lead the world to a "new world order".


Hirota's Foreign Policy After the Lukouchiao Incident

During the latter months of 1937 the war in China increased steadily both in scale and in intensity. Foreign policy statements were made in accordance with the Kwantung Army's plan for conducting, simultaneously with the advance into China, a propaganda campaign to convince the whole world of the lawfulness of Japan's actions.

On 1 September 1937, Horniouchi, the Vice-Minister of Foreign Affairs, gave a radio address, in which he insisted that Japan had no wish to acquire Chinese territory; and that she desired merely the realisation of conditions permitting genuine cooperation between the two countries.

Four days later, on 5 September 1937, Foreign Minister HIROTA developed the same theme in reviewing foreign policy in the Diet. He said that the basic policy of the Japanese government was aimed at stabilising relations between Japan, China and Manchukuo for their common prosperity and well-being. China, ignoring Japan's true motives, had mobilised vast armies, which Japan could not do otherwise than counter by force of arms. In self-defence and in the cause of righteousness, Japan was determined to deal a decisive blow to China, so that that country might reflect upon the error of its ways, and so that the Chinese armies might lose their will to fight.


A month later, however, on 6 October 1937, the League of Nations decided that Japan's military operations against China were out of all proportion to the incident which had occasioned the conflict; and could be justified, neither under existing treaty rights, nor upon the ground of self-defense.

Meanwhile HIROTA followed the principle laid down in the national policy decision, which stipulated that Japan, while attempting to maintain amicable relations with the Western Powers, would let nothing stand in the way of her schemes for expansion upon the Asiatic continent. On 29 July 1937, two days after Konoye had stated his cabinet's policy towards China, HIROTA advised the budget committee that he did not expect interference from third powers in regard to the China dispute. He assured the committee that, if any such proposal should emanate from a third power, the government would not hesitate to give a firm refusal.

ON 10 August 1937, Ambassador Grew conveyed to HIROTA a new tender of good offices by the United States; and only then did HIROTA acknowledge Secretary Hull's first pronouncement of 16 July 1937. In the reply, delivered to Hull on 13 August 1937, it was stated that, while the Japanese cabinet concurred in the principles which Hull had enunciated, for the maintenance of world peace, it believed that the object of those principles could be obtained in the Far East only by giving consideration to the particular circumstances of that region.


On 25 September 1937l, HIROTA replied in similar terms to an invitation to participate in the work of the League of Nations Advisory Committee, which was then investigating the situation in China. He said that the Japanese Cabinet was convinced that an equitable and practical solution of their difficulties could be found only by China and Japan themselves.

The resolution of the League Assembly on 6 October 1937, showed the extent of the international resentment which Japanese activities in China had aroused. it was then resolved that the member states would refrain from taking any action which might weaken China's position, and that each should consider what steps it might take to offer her positive aid.

It was also agreed that, pursuant to the provisions of the Nine-Power Treaty of 1922, a conference of the powers signatory to that treaty should be held to consider the situation of difficulty which had arisen in China. The United States expressed general concurrence in these findings and resolutions.

The Brussels Conference and Violation of Treaty Obligations
as Part of the Pattern of Preparations for War

During October 1937, the Cabinet, of which HIROTA, KAYA, and KIDO were now members, refused an invitation to attend the Nine-Power Conference, which was to be held in Brussels. The Cabinet, in conveying this decision, alleged that Japanese acton in China was of a defensive nature, and expressed great resentment


at the unfriendly findings and resolutions of the League Assembly. In the cabinet's view, the solution of the conflict lay in Chinese realisation of the need for cooperation with Japan; and only by comprehending this need could other nations contribute effectively towards the stabilisation of the Far East.

Whatever justification Japan might plead for her actions in China, her refusal frankly to discuss the situation was inconsistent with her obligations as a signatory to the nine-Power Treaty. It was, however, wholly consistent with earlier pronouncements; for violation and repudiation of treaty obligations had long formed part of the general scheme of preparations for war.

Japan's withdrawal from the League in 1933 had been precipitated by just such an adverse finding -- on that occasion in relation to the Manchurian Incident. In giving notice to the League of her intention to withdraw, Japan had charged that body with failure to grasp the realities of the Far Eastern situation, thus detracting from the stabilisation of East Asia. Her spokesmen had said that Japan could no longer cooperate with an organisation, the majority of the members of which "had attached greater importance to upholding inapplicable formulae than to the real task of ensuring peace".

During the same year, the Navy Minister in the Saito Cabinet had been invited to expound the Japanese attitude toward the naval limitation treaties.


In doing so, he stressed Japan's dissatisfaction with the existing ratios, and sad that, if changes in the international situation should occur, "there is no reason why a nation should remain forever content with a treaty which it had once signed. Only out of regard for the welfare of humanity, we signed the London Naval Treaty, but we did not do it unconditionally. As regards the Washington Agreement, it was signed twelve years ago and in our opinion is no longer adequate to guarantee the security of this empire, as the international situation has thoroughly altered in that period of time".

When preliminary discussions for a naval disarmament conference were held in London in 1934, the Okada Cabinet issued a statement for the guidance of public opinion at home. "Japan", they said, "who resigned form the League of Nations with regard to the Manchurian Incident, experienced the fact that a just claim is not always recognised at an international conference". Japan, it was added, would have nothing to fear, even though the agreement should not be concluded. in the following year, 1935, non-recognition of her "just claims" caused Japan to abandon the system of limitation of armament by international agreement. In 1937, the first year after the treaties expired, the Japanese programme of naval preparations for war took definite shape.


During December 1934, Sir John Simon had pointed out to Matsudaira, the Japanese delegate to the preliminary naval conference, that Great Britain, as a party to the Nine-Power Treaty, had rights and obligations in respect of China; and had asked what the Japanese policy was to be in regard to the independence of that country. No satisfactory or clear-cut reply was received. But in the 1936 policy decision and in the Army's 1937 five-year planning, the position was clarified. Japan would secure a steady footing of her Empire on the continent, and would "ingeniously" exploit the resources of North China. The war in China was a consequence of that policy.

Industrial Planning in Manchukuo After the Lukouchiao Incident

During the latter half of 1937, many facets of Japanese policy and planning were exemplified in the measures concerning Manchukuo. Steps were taken to develop the resources of that country and to promote the establishment of heavy industries. These measures were in general accordance with the Army's five-year planning, and involved the creation of larger industrial units, responsive to governmental control.

This policy in turn gave rise to further violations of the rights of the Western Powers under the provisions of the Nine-power Treaty. While Japan exercised complete control over the development of Manchukuoan industry, some deference


was still paid to the fiction that the two countries were entirely independent of each other; for, by this device, Japan might disclaim responsibility for the broken treaty obligations of which the Western Powers complained.

On 3 August 1937, the two governments concluded an agreement to establish, under their dual control, a joint stock company. Its objects were to promote Japanese immigration into Manchukuo, and to develop the lands of that country.

On 22 October 1937, three days before Foreign Minister HIROTA ceased to hold the additional appointment of President of the Planning Board, the Cabinet met to consider new industrial measures for Manchukuo. Finance Minister KAYA and Education Minister KIDO were then among its members. The Cabinet was agreed that the situation in which Japan found herself demanded, in particular, the urgent expansion of heavy industries; and that, to achieve this result in Manchukuo, new measures of industrial control were necessary. It was decided that the two governments, acting in conjunction, should promote a new national policy company, which would establish and develop heavy industry in Manchukuo. Special attention would be given to the use of substitutes as raw materials. The Manchukuoan government would supply half the capital required; and the remainder would be subscribed privately. The management of the new venture would be


entrusted to the most suitable Japanese civilian; and the products of the new enterprise would be treated in Japan as though they were not of foreign origin.

In Manchukuo itself, HOSHINO, who had held in succession the positions of Vice-Minister of Finance and Chief of the General Affairs Section of the National Affairs, Board, became, on 1 July 1937, the head of that board. As Chief of General Affairs of Manchukuo, all industries were under his control; and, as a Manchukuoan member of the Joint Economic Committee, his was the vote which enabled Japan to carry all decisions. HOSHINO used these large powers to place Japanese in charge of all industries, and to exclude the people of Manchuria from business enterprises.

On 1 December 1937, pursuant to an agreement made in the previous month, Japan released her extraterritorial rights in Manchukuo. This measure, which had been contemplated in the Japanese-Manchukuoan Treaty of 10 June 1936, was used by the Japanese-dominated Manchukuoan government as a device for insisting that all foreign firms in that country be subjected to its jurisdiction. An immediate protest was made to Japan by the United States concerning this action, which constituted a violation of the rights secured by the "open door" provisions of the Nine-Power Treaty.


Development of the War-Supporting Industries
After the Lukouchiao Incident

On 25 October 1937, the Planning Board was reorganized; and thereafter, HIROTA, whose office as President was abolished, was free to devote his whole attention to the conduct of foreign affairs. But, prior to that date and immediately following the outbreak of war in China, measures were taken to promote within Japan itself the development of the war-supporting industries, and to make the Japanese economy subservient to the needs of war. Though the war in China undoubtedly prompted the measures taken, and determined their relative priorities, they were of that long-range character which the Army had planned.

An assured supply of oil and petroleum was the most crucial need of all, for Japan was itself able to supply only 10 per centum of normal civilian needs. By building up a steadily increasing reserve of oil and oil products substantial provision had been made for such a contingency as a short war in China; but the Army, in its 1937 planning, had decided, in the interests of self-sufficiency, to develop a synthetic industry under government subsidy. New national policy companies were to be created to promote the production of synthetic petroleum.

During August 1937, the month after hostilities were renewed in China, legislation was passed giving effect to these long-range plans. it was decided to advance the production of


synthetic petroleum, using coal as the raw material. New national policy companies, under governmental guidance and control, were established to develop and finance the industry; and provision was made for a system of licensing, tax exemptions and governmental subsidies.

Japan was also poor in indigenous supplies of iron, and was therefore deficient in iron and steel industries. Since 1933, the industry had been under governmental control, and in the decade before 1937, local production had been trebled, but, in March 1937l, while Hayashi's Cabinet was in office, new plans had been made setting increased production goals. On 12 August 1937, a new law was passed, giving effect to the Army's plans for the iron and steel industries, and designed to double local production within a five-year period. To encourage the production of these and other strategic materials, large subsidies were paid; and special encouragement was given to those industrialists who manufactured parts essential to the growing shipbuilding industry.

In its detailed plan of 10 June 1937, the Army had also stipulated that the government should strive completely to equip all railways, harbours and roads. On 1 October 1937, legislation was passed for the creation of a new and heavily capitalised national policy company, which would develop and control all transportation facilities within Japan.

But, even at this stage in the China War, long-range industrial preparations


were not confined to measures affecting the specific industries and utilities most vital to the war effort. As in Manchukuo, so in Japan itself, effect was given to the Army's plan for regimenting heavy industry into larger units, more susceptible of governmental control. The Major Industries Control Law, passed in August 1937, encouraged the formation by industrial groups of new associations or cartels, which were given wide powers of self-government.

The Establishment of a Controlled Economy

The Army, which had planned these things in its detailed programme of 10 June 1937, had also foreseen that they must be achieved in conjunction with a planned and regulated economy, which would require far-reaching measures of trade and financial control. The measures requisite to achieve this end had been set out at length and in detail; and had ended with this exordium: -- "The success or failure of this programme is doubtless solely dependent upon the government's consistent and firm guidance under the national policy. The government should support various industries with all possible means from the standpoint of strengthening the nation's power, and it is especially of vital necessity that measures for financial aid should be taken by the government". The estimated amount of government assistance required for the war-supporting industries rose from 57 million yen in the


remaining months of 1937 to 338 million yen in 1941. Much of the responsibility for the success of economic and industrial preparations for war therefore rested with Finance Minister KAYA.

In August 1937, the month most productive of industrial legislation, special measures were passed to stimulate the production of gold as a means of acquiring foreign exchange; and the government took power to control the disposition of all gold reserves.

In this same month a first measure of import licensing was taken; and in the following month a more comprehensive measure was passed to adjust the balance of trade. Under this law of September 1937, passes as a temporary expedient but never repealed, the government assumed complete control of imports, their selection, distribution and utilisation. These powers the Planning Board exercised through government-controlled export and import associations, one to each essential industry.

Restrictive legislation of this type was not entirely new, for Japan's exports had seldom been sufficient to pay for her imports; and on these she was dependent for her economic livelihood and position as an industrial nation. The rising tide of her programme of industrialisation, and the virtual extinction of her foreign credit since the time of the Manchurian Incident, had led to the adoption of a succession of measures for trade and financial control. Laws relating to foreign exchange control were


passed in 1932 and 1933. The Foreign Exchange Control Law, passed in March 1933, had given the cabinet wide powers to control and canalise all foreign exchange transactions.

These powers, however, had not been completely invoked until January 1937, when all exchange transactions involving more than thirty thousand yen per month were made subject to government license. By December 1937, the position had so far deteriorated that the exemption level stood at one hundred yen per month.

Under the Temporary FUnd Adjustment Law of 10 September 1937, complete authority over Japan's finances was centralised in the Bank of Japan, and made subject to the overriding discretion of Finance Minister KAYA.

Army Preparations Against the USSR
After the Lukouchiao Incident

Although the drastic financial controls imposed in 1937 were occasioned in part by the large subsidies paid in that year to encourage the development of the war-supporting industries, these were small in comparison with the demands made upon the national exchequer by appropriations for the Army and Navy. Ordinarily the budget of each Ministry was comprised of a general account and a special account; but in 1937 a third account was set up to meet expenditure directly entailed by the war in China. This "War Expenditure Account", although originally a temporary measure occasioned by


the emergency in China, was never closed. Total expenditure upon the Army alone rose from rather more than 500 million yen in 1936 to nearly 2,750 million yen in 1937.

This large expenditure had made possible an enourmous increase in Japanese military strength. The League's Advisory Committee, in its report of 6 October 1937, found that Japan had not ceased to intensify her action; and that she was employing larger and larger forces, and more and more powerful armaments. The standing strength of the Army rose from 450,000 men on 1 January 1937, to 950,000 men on 1 January 1938.

The Army, which had initiated the hostilities in North China, in part, upon Lieutenant-General TOJO's advice, still regarded them as a preliminary to the coming struggle with the U.S.S.R. While the fighting raged in China, TOJO, as Chief of Staff of the Kwantung Army, made other plans in preparation for an attack upon the Soviet Union; and, in December 1937, he transmitted them to Lieutenant-General UMEZU, Vice-Minister of War. In the following month TOJO suggested to UMEZU, and obtained, the passage of a regulation which increased the strength of the Kwantung Army; and, on 24 January 1938, General Ueda, then in command of that army, advised War Minister Sugiyama of the contribution which North China should make to the preparation for "the fast approaching war with Soviet Russia".


The China War Led Japan to Adopt the Army's Scheme
for a Nation-Wide Mobilisation

More important than the purely military preparations of 1937. was the degree in which the Army had achieved the realisation of its broader scheme to mobilise the entire strength of the Japanese nation for war. By electing to renew the war in China the Army had undertaken a new commitment, the magnitude of which it had not fully realised. It had thereby interrupted the smooth progress of its long-range planning for the Japanese nation. But, on the other hand, in the first six months of war, the Army had seen its major schemes adopted by government and nation with a readiness scarcely possible of attainment in time of peace.

Already the basic steps to secure a planned and regimented war-supporting economy had bene taken both in Manchukuo and in Japan itself. Even the Navy, whose armaments were steadily increasing, had been brought to play an active part in the Army's all-embracing purpose.

In August 1937, when the Army attacked Shanghai, it was supported by a force of some thirty naval vessels, despatched to the scene by order of the Cabinet. Later in the same month, the Navy proclaimed a blockade of the China coast, with the object of preventing supplies from reaching Chinese troops.

In December 1937, a new step was taken to bring Chinese territory within the "co-prosperity sphere".


In that month the Japanese established at Peking, a new provisional Chinese government, one of the avowed purposes of which was to exploit the industries of the area it governed. A publicity organisation, created for the purpose of bolstering the new regime, was placed under the control of the Japanese military forces in North China. The Kwantung Army expected from this subjugated area a contribution towards its preparations for war with the Soviet Union.

Sato on National Preparations for War
After the Lukouchiao Incident

Major-General SATO, when Chief of a Section of the Military Affairs Bureau in March 1942, had occasion to survey broadly the developments with which we had been dealing. In a speech, to which reference has already been made, he corroborated the conclusions which other evidence has established.

SATO pointed out that the Lukouchiao Incident, which revived the war in China, occurred during the first year of the Five-Year Plan for the Expansion of Productive Power. "What worried us most", he said, "was the fear that this incident might cause the breakdown of our Armament expansion Plan and the Five-Year Production Expansion Plan. So we decided to see that the Chinese Incident would not end in a war of attrition on our side. Accordingly, generally speaking, we spent 40% of our budget on the Chinese Incident and 60% on armament expansion. In respect


to iron and other important materials allotted to the army, we spent 20% on the Chinese Incident and 80% on the expansion of armaments. As a result, the air force and mechanised units have been greatly expanded and the fighting power of the whole Japanese Army has been increased to more than three times what it was before the Chinese Incident. I believe that our Navy, which suffered very little attrition in the China Affair, must have perfected and expanded its fighting power. Of course, production power of the munition industry has been expanded seven or eight fold at a rough estimate."

This was a topic on which SATO could claim to speak with some authority, for form 24 June 1937 to 29 July 1938, he had been first an investigator, and then Secretary, of the Planning Board. During the same period he had served as a special member of the China Affair General Mobilisation business Affairs Committee, and as a section staff member of the War Ministry's Bureau of Military Affairs. He had been released form his staff appointments in December 1938. In March 1941, he had assumed such important posts as Commissioner dealing with the affairs of the War Ministry in the Diet; secretary of the Liaison committee of the Asia Development Board; and Secretary of the Manchurian Affairs Board. These and similar appointments he still held at the time he made this speech.


The Cabinet Advisory Council,
Imperial General Headquarters,
and the War Expenditure Account

During this same period steps were taken which tended to increase the Army's influence over the cabinet, and to make effective its long-range planning. On 15 October 1937, there was created, as a temporary measure, a Cabinet Advisory Council, whose task it was to render expert advice upon matters arising out of the "China Incident". The twelve members of this body, who were each accorded the privileges of a Minister of State, would represent the three principal aspects of the national mobilisation for war. Businessmen would join with military men and politicians in advising the cabinet, and in participating in the Cabinet's deliberations. MATSUOKA and General ARAKI were appointed as Cabinet Councillors on the day of the Council's inception.

As Japan became more deeply embroiled in the war with China, members of Konoye's Cabinet discussed the setting up of Imperial General Headquarters. This was an organization which functioned only in time of war or serious incident; and there was some debate as to whether the undeclared and unacknowledged war then being fought in China warranted its institution. On 3 November 1937, War Minister Sugiyama and Education Minister KIDO discussed the question in relation to the saving of the situation which then existed. On


19 November 1937, the Cabinet, of which HIROTA, KAYA, and KIDO were then members gave consideration to the matter; and, on the following day, Imperial General Headquarters was established.

It was a composite body, representative of the Army and Navy Ministries and General Staffs. The Army and Navy Sections med separately in their own General Staff Offices; but, once or twice a week, joint sessions were held at the imperial Palace. These joint meetings were concerned with the questions of tactics and strategy. Questions of administrative policy were matters for the Cabinet to decide with the assistance of its Advisory Council; but Imperial General Headquarters was charged with the direction of military operations.

This was a sphere in which secrecy was held to be essential and in which the Cabinet was to have no part. Imperial General Headquarters was responsible only to the Emperor; and its staff members, while acting in that capacity, were under the direct control, not of the War and Navy Ministers, but of the Army and Navy Chiefs of Staff.

There is little evidence to indicate the importance of the part played by Imperial General Headquarters in the events of subsequent years. It was a poorly coordinated body, which tended to resolve itself into the Army and Navy Sections of which it was composed. But, by its very establishment, the


armed forces were given power to make important decisions on military matters without the approval, or even the knowledge, of the Cabinet of the day.

More important still was the power over Japan's finances which the Army gained through the institution of the War Expenditure Account. Disbursements from that account might be made upon the authorisation of the War, Navy, or Finance Minister; and, in the years which followed, such disbursements were made, not only upon the authorisation of KAYA and his successors in the Finance Ministry, but also upon those of War Minsters ITAGAKI, HATA, and TOJO, and of Navy Minister SHIMADA.

The Control of Propaganda and the Use of Censorship
After the Lukouchiao Incident

s the Five Minsters had acknowledged in their national policy decision of 11 August 1936, their plans depended, in the last resort, upon the Japanese people's will to achieve its "destiny". They had then decided that internal policies must be made to subserve the national plan of expansion; and that, therefore, steps would be taken "to lead and unify public opinion at home, and to strengthen the will of the people to tide over the extraordinary emergency of our country". On 20 May 1936, before that decision was made, the Army had issued a mobilisation plan which described in detail the measures required to


direct and control public opinion at the outbreak of war. Each ministry would establish its own intelligence and propaganda organs in every part of Japan. In the same year, a Bureau of Information had been created to centralise and coordinate the dissemination of propaganda by the various departments of government.

In September 1937, two months after the Lukouchiao Incident had occurred, this body was reconstituted as a bureau of the Cabinet itself. Lieutenant-General UMEZU, Vice-Minister of War, became, on 25 September 1937, a member of the new Cabinet Information Bureau, upon which devolved the task of carrying out the Army's mobilisation plan for information and propaganda.

A more immediate result of the outbreak of war was the intensification of existing measures of censorship. The High Police, who watched over the activities of all who criticised the policy of the Japanese government, now permitted no one to express opposition to the war in China. It became one of the principal functions of the Home Ministry to suppress such criticism; and the regular police force, which was under that ministry's control, saw that this policy was enforced. Anyone who spoke publicly and in a critical vein of the Cabinet's policy was detained and interrogated. Persons found to have opposed it were arrested and imprisoned.

Nowhere was the control of public opinion


better exemplified than in the schools and universities of Japan. Professors and teachers were expected to cooperate whole-heartedly in propagating the policy of the cabinet. Expressions of thought in favour of the ideals of peace, or in opposition to the policy of preparations for war, were rigorously suppressed.

When, on 22 October 1937, KIDO became Minister of Education, he lent himself immediately to the enforcement of these measures of control. Teachers, whose attitude towards the national policy appeared to be critical, were either dismissed or forced to resign. Often they were arrested and charged under the Public Peace Law upon suspicion of being opposed to the political structure of the Empire of Japan.

The facility with which these oppressive measures were carried out affords an indication of the success which had attended the efforts of soldiers, statesmen and publicists to prepare Japanese public opinion for war. The dismissal or forced resignation of these teachers raised no domestic issue at the time, for the general public looked upon them as isolated sympathisers with liberalism.

The Use Made of Education to Prepared Public Opinion
for War After the Lukouchiao Incident

Even before the Lukouchiao Incident had occurred, the Army, through its military instructors, had


taken control of military teaching and training in the schools; and, after the fighting began in China, this control became so absolute that the military instructors dictated the manner in which the schools should be conducted. The Education Ministry well understood that teaching must subserve the government's aims; for, in May 1937, it issued to teachers, students and the public at large, a book entitled The Fundamentals of the National Polity.

In this year also the Educational Council was established to study and investigate the Japanese school system. It was to pursue its studies without regard to changes of Cabinet, and to consider the manner in which the national qualities of the Japanese people might be enhanced. Although it was not created for the specific purpose of promoting military training and teaching in schools, that became its task when the China War broke out.

The Educational Council's recommendations for comprehensive changes in school curricula and in teaching methods did not become effective until 1940; but in 1937 the Council adopted as its fundamental aim the promotion of the cause of service to the country.

With KIDO's appointment as Education Minister on 22 October 1937, the reorganisation of the Japanese school system began to take effect. After 1937, teaching was designed to promote the warlike feeling of the nation. In the subjects of the ordinary school course, as well as in those periods set


aside for purely military training, the spirit of Kodo or ultra-nationalism was instilled into schoolchildren. They were taught that Japan was strong, and that she must show to the world her special characteristics. In universities as well as in schools, military training and academic teaching were both used to inculcate a spirit of militarism, until the idea of regarding Japan as supreme had permeated the whole nation. War was represented as glorious, productive, and necessary to Japan's future.

Kido Averts a Cabinet Crisis in November 1937

During the latter half of 1937, Foreign Minister HIROTA had striven unsuccessfully to gain German support for the conquest of China, representing that conflict, both to his own people and to the Germans, as a struggle against Communism. Although, on 6 November 1937, the Privy Council had ratified a new treaty admitting Italy as a third partner in the Anti-Comintern alliance, German disapproval of Japan's activities in China remained undiminshed. Germany had important interests in China, and considered the koumintang as a potential ally in her anti-Soviet policy. She had therefore elected to ignore the existence of hostilities and to regard herself as not bound by the rules of strict neutrality because neither China nor Japan had declared war.

In November 1937, the Konoye Cabinet was oppressed by problems arising out the lengthening war in China. In spite of huge expenditure in materials


and manpower, the war continued to assume greater proportions, and there was now no prospect of a speedy victory. The acute strain placed upon the nation's economy was giving rise to grave financial difficulties. The Nine-Power Conference, then meeting at Brussels, served only as a reminder that Japan was friendless among the nations. On 3 November 1937, War Minister Sugiyama and Education Minister KIDO discussed the manner in which the situation might be saved.

The Japanese Army was, like the Germans, preoccupied with the coming war against the Soviet Union. So great did the embarrassment of the China War become, that the Army General Staff sought German intervention to bring the fighting to a close. Major-General OSHIMA, military Attaché in Berlin, was instructed to use his influence to this end.

When, on 15 November 1937, Prime Minister Konoye told KIDO that he was thinking of tendering his Cabinet's resignation, KIDO was quick to see the repercussions which the is development might entail. He thought that it would affect adversely financial and other circles, and that the rate of exchange would fall. This, in turn, would prejudice the outcome of the war in China. KIDO considered that an unsettled political situation at home and the changing of the war in China into a defensive operation were each possible results of a Cabinet resignation. He saw that, in either


event, the unfriendly attitude of foreign countries, which, he acknowledged, "had finally turned serious", would be strengthened. Such a development should be avoided at all costs.

On 16 November 1937, KIDO urged these views upon Konoye, and asked him to retain his office; and this for the present Konoye agreed to do. Four days later, by establishing Imperial General Headquarters, the Cabinet displayed a new resolution in the prosecution of the China War.

Hirota Strengthens the Cabinet's Resolve
to Achieve the Conquest of China

But, in this same month of November 1937, there was an opportunity, had the Cabinet so desired, of bringing the war in China to an end. So unsatisfactory had Japan's position become, that even the Army General Staff had abandoned hope of a speedy victory. Under pressure of German disapproval, and through German intermediaries, Foreign Minister HIROTA presented, on 5 November 1937, the first of three peace offers to the Chinese. The negotiations thus begun continued through December 1937 and into January 1938; but HIROTA's vague and changing demands provided no basis for a concrete agreement. While the negotiations were proceeding, the Japanese continued their offensive in China with vigour.

By January the Cabinet had strengthened its opposition to any compromise peace. On 11 January 1938, an Imperial Conference, called to determine the disposition of the "China Incident", decided


that, if the Koumintang would not yield to Japan's demands, it must be crushed, or merged into a new central regime.

To the last of Japan's three peace offers the Chinese returned a conciliatory answer, asking that the Japanese proposal be sated more specifically. HIROTA, at whose instigation the proposals had been put forward in a very indefinite form, and who now feared that the Chinese might gain support from Great Britain and the United States, reacted angrily. On 14 January 1938, he told the German intermediaries that China was beaten, and must give a speedy reply. He emphasized that Japan would not permit the matter to become the subject of international discussion or mediation. The Germans, in reporting to their own government, made it clear that, in their opinion, Japan was not acting with candour.

On this same day, 14 January 1938, it was decided at a Cabinet Conference, which Konoye, HIROTA and KIDO attended, that Japan would have no further dealings with the Koumintang, and would negotiate only with a new Chinese Government, the establishment of which was expected. This was not an empty expectation, for already, on 1 January 1938, the Japanese had inaugurated with some ceremony a new local government at Nanking. In an official statement, issued on 16 January 1938, the Japanese Cabinet reiterated its respect for the sovereignty and territorial integrity of China, but this, now, had reference to a Chinese Government of Japan's creating. The


same statement promised respect for the rights and interests of other powers in that country.

On 22 January 1938, both Konoye and HIROTA echoed these assurances in the Diet, while reaffirming once more that the Japanese Cabinet held fast to the principles set forth in the 1936 national policy decision. " It is scarcely necessary for me to say", said Prime Minister Konoye on this occasion, "that Japan's immutable national policy aims at building the edifice of permanent peace for East Asia on the unshakable foundation of close cooperation between Japan, Manchukuo and China, and to contribute thereby to the cause of world peace". He added that the end of the conflict was still far ahead; and that Japan's mission as the stablising force of East Asia was greater than ever.

Five days later the real design of exploitation and armed domination was once more revealed. On 27 January 1938, the Cabinet decided that the Japanese-sponsored Nanking regime should form the nucleus of a Central China Provisional Government. It was to be "a highly pro-Japanese regime", which would gradually free itself from dependence pon Great Britain and the United States. Its naval and air forces would be included in Japan's defence plan. It would "smoothly amalgamate" with the existing puppet government of North China.

On 26 January 1938, the German Ambassador in Tokyo, being now convinced that Japan would conquer China, urged his Cabinet to accept the fait accompli.


Ambassador TOGO in Berlin had offered to the Germans the additional allurement of economic participation in the new China which Japan was building. After this date Germany withdrew her support of China, and her opposition to Japan's designs upon that country. On 20 February 1938, Chancellor Hitler took the long-delayed steps of announcing German recognition of the state of Manchukuo, and his own preference for a Japanese victory in China.

In the space of two months, and in the face of the Premier's despondency, KIDO and HIROTA ad succeeded in committing Japan once more to the pursuit of that "steady footing in the Eastern continent", which was to be achieved in spite of all difficulties.

The Army Continues to Plan and Prepare for
the Expected War With the Soviet Union

in the opening months of 1938, while the Cabinet formed a new resolve to complete the conquest of China, the Army continued to make preparations for war with the Soviet Union. In December 1937, Lieutenant-General TOJO, as Chief of Staff of the Kwantung Army, had communicate to UMEZU, the War Vice-Minister, a plan for meteorological installations in Inner Mongolia in preparation for a war with the U.S.S.R. On 12 January 1938, TOJO urged upon Lieutenant-General UMEZU the need for the speedy completion of this work,


which he considered to be of vital importance in regard both to the "China Incident" and to anti-Soviet strategy. At the same time he referred to UMEZU, for decision, the question of extending the enlistment of soldiers serving with units in Manchukuo; and, on 29 January 1938, UMEZU informed him that such action would be taken. On 11 February 1938, TOJO sent to UMEZU the Kwantung Army's plan for the erection of anti-Soviet fortifications during the years 1938 and 1939.

The Army did not, however, confine its attention to purely military planning and preparation. The leaders of the Kwantung Army, standing upon the fringe of the fighting in China, regarded that conflict, and every other aspect of Japan's domestic and foreign policies, as so many factors to be considered in relation to the approaching struggle with the Soviet Union.

While TOJO and UMEZU settled the detailed military planning, General Ueda, then in command of the Kwantung Army, addressed his attention to a question of broader strategy. On 24 January 1938, he communicated to War Minister Sugiyama, his views upon the manner in which North China should be developed, so that its people might best be made "to contribute to the preparation for the fast approaching war with Soviet Russia".

Measures taken during the same period for the economic and industrial development of Manchukuo and of the occupied provinces of North China were closely related to the Kwantung Army's planning. Until 20


December 1937, the promotion of all heavy industries in Manchukuo had been governed by the South Manchurian Railway Company--the first of the great "national policy" companies. Under MATSUOKA, it continued after that date to play an important part in the Kwantung Army's preparations for war, cooperating not only in the enforcement of domestic policies, but also in the Army's operational and other preparations for war with the Soviet Union.

But the South Manchurian Railway Company could not meet the additional strain of financing strategic developments in North China; and, on 20 December 1038, a new holding company was created by Manchukuoan Ordinance. in this new "Manchurian Industry Development Corporation", set up pursuant to an agreement between the Japanese and Manchukuoan governments, was centered the control of industries in Manchukuo. The Manchukuoan General Affairs Board, under HOSHINO, assisted in drafting the laws which governed it, and which placed it under governmental supervision. The new corporation was established early in 1938.

After February 1938, when Manchukuo was accorded German recognition, the Army made plans to foster closer relations between that state and Germany. Diplomatic relations were established between the two countries, and a treaty of amity was signed. On 15 May 1938, TOJO expressed to the Army General STaff the Kwantung Army's wish that Manchukuo should,


as soon as possible, become a party to the Anti-Comintern Pact. On 24 May 1938, UMEZU replied that the Japanese Cabinet would offer no objection, but desired to preserve the fiction of Manchukuoan independence. It was thought best that the Manchukuoan government should take the first step, acting as if of its own volition, and requesting Japanese assistance.

The Consolidation of Japanese Power,
and the Development of War Supporting Industries, in China

Meanwhile, in the areas of China which the Japanese had subdued, Japan's "new order" was in process of building. After the fall of Nanking in December 1937, various Japanese-controlled local governments were set up; and, on 28 March 1938, a new government for Central China was established upon the Manchukuoan pattern. The nominally independent "Renovation Government of the Republic of China" was bound by its constitution to exploit the resources of the areas it governed, and to promote their industrial development. It would also take anti-Communist measures, but would strive to maintain friendly foreign relations. As in the case of North China, a new propaganda society was formed to support the puppet government.

The official Tokyo Gazette proclaimed the inauguration of a new phase in Japanese relations with China, significant because it marked the progress


made towards the goal of Hakko Ichiu. It was declared that the ideal of "the whole world as one family" had always constituted the basis of Japan's domestic and foreign policies; and that it explained the policy now adopted towards China.

The article followed closely the tenor of the policy statements which Konoye and HIROTA had made before the Diet. Japan's first aim had been to deal China "a punishing blow", in the hope that she would abandon her anti-Japanese attitude. In January 1938, the Japanese Cabinet had expressed its irrevocable determination to have no further dealings with the Koumintang, and to assist in developing new governments in North and Central China. The ultimate purpose of Japan's present action, the article continued, was to eliminate all those causes of friction which imperilled the peace and security of East Asia. Thus would the countries of the Far East be enabled to enjoy among themselves "the ideals of co-existence and common prosperity".

In this manner Japan acquired a new field for the production of war materials and the expansion of war-supporting industries. On 8 April 1938, a new Japanese-financed company was promoted to develop and exploit the iron ore deposits of the Yangtse Valley.

On 30 April 1938, two new "national policy" companies were created to serve the same purpose in China as similar companies had done in Manchukuo.


The North China Development Company and the Central China Promotion Company were established to promote the development of heavy industries in the subjugated areas of China. Half the capital of each company was subscribed by the Japanese government; and Lieutenant-General UMEZU, Vice=Minister of War, was appointed as a member of the organising committee of each. Konoye considered that the work of these two companies was vital, both to Japan's military operations, and to her political activities, upon the continent.

Hirota's Foreign Policy in 1938 Was Founded on the
Five Ministers' Decision of August 1936

These developments in China reflected the policy of Foreign Minister HIROTA, who adhered steadfastly to the goal of the basic national policy decision of 11 August 1936. While the Army was obsessed with the prospect of a coming war with the Soviet Union, and looked to Germany as an ally, HIROTA took a broader and more cautious view. He aimed only at the achievement of expansion on the continent, and, at the same time, at the completion of Japan's preparations for whatever conflicts that expansion might ultimately entail.

On 29 May 1938, HIROTA left the Foreign Ministry; but at some earlier date he laid down the principle which would govern German and Italian participation in the economic development of North China. The prime and unchanging goal was the establishment of Japan's


"new order" in East Asia; and relations, both with the Axis and with the Western Powers, would be governed, not be professions made or pledges given, but solely by the criterion of expediency.

Ambassador TOGO in Berlin was instructed to solicit German assistance. He would propose that, in return for German recognition of Japan's special position in East Asia, Japan would endeavour to place Germany in a position not inferior to that occupied by other countries. Where possible, German interests would be preferred to those of other powers. In principle, Germany and Japan would occupy equal positions in the Chinese market--though, in certain respects, a special position might accrue to Japan as the power actually responsible for the maintenance of the Chinese currency system. Nevertheless, in setting up any import and export control system, Germany's interests would certainly be preferred to those of any third power.

HIROTA, therefore, did not intend to respect the treaty rights of the Western Powers, or to honour his assurances that they would be preserved. He was, however, careful to warn his subordinates that Germany and Italy could not be allowed a preferred position, equal, or even inferior, to that occupied by Japan, if the preference given should threaten to cut off entirely the future participation of Great Britain and the United States in the economic development of China. Therefore the modes prescribed for German participation


were virtually limited to those most advantageous to Japan herself--namely, the supply of capital, and of machinery upon credit, with provision for a sharing in the management of particular enterprises.

Deterioration of Japanese Relations With the Western Powers
After the Lukouchiao Incident

Despite this policy of duplicity, Foreign Minister HIROTA did not achieve the secondary aim of maintaining amicable relations with the Western Powers. In the latter months of 1937, Japanese statesmen had continued to deny that their country harboured any designs upon Chinese territory. The Cabinet had given repeated assurances that foreigners and foreign property would be protected, and that foreign treaty rights would be preserved. But, so great had been the discrepancy between these professions and the nature of Japan's activities upon the Asiatic continent, that the rift between Japan and the Western Powers had become perceptibly greater.

Nevertheless, efforts had still been made to allay Western suspicion and resentment; and to discount the significance of Japan's association with the Axis. in December 1937, it was proclaimed in the Tokyo Gazette that the Anti-Comintern Pact was not directed against any particular nation. The Cabinet complained that the pact had been misconstrued and subjected to unfair criticism.


During this period the conduct of the Japanese armies in China had served only to magnify Japan's estrangement from the West. In spite of frequent protests and renewed assurances, attacks continued to be made upon British and American citizens and property in China. So little did the Army value friendship with the Western powers that, in December 1937, an unprovoked attack was made upon their naval forces. A United States gunboat upon the river Yangtse was fired upon and sunk. Attacks were made upon a British gunboat, and on British merchant ships. These acts of provocation were carried out by local military commanders, and notably by Colonel HASHIMOTO, in pursuance of definite orders to attack all vessels proceeding in the vicinity of Nanking, regardless of the nationality.

In their policy speeches, made before the Diet on 22 January 1938, both Konoye and HIROTA again stressed Japan's desire to cultivate friendly relations with the Western Powers; and HIROTA gave yet another categorical assurance that the rights and interests of those powers in China would be respected to the fullest extent. Yet, during the first six months of 1938, in spite of continued representations made to HIROTA by the United States Ambassador in Tokyo, units of the Japanese Army committed frequent and wanton violations of American rights and interests in China.

This display of hostility cost Japan heavily; for, on 11 June 1938, the United States place a


moral embargo upon the export to Japan of aircraft and other weapons of war.

HIROTA had been more astute than the military leaders. He had seen the value of Western assistance during the period of Japan's preparation for war; and he had therefore striven to gain it through false assurances and false professions of friendship. But, at the same time, Japan was making ready for war in the Pacific; and in the promotion of this aspect of his country's warlike preparations, HIROTA was playing a prominent part.

Naval Preparations and Preparations in the
Mandated Islands During 1938

Under the veil of secrecy maintained by the Foreign and Navy Ministries, Japan continued during 1938 to prepare for war in the Pacific, by fortifying and provisioning as air and naval bases her mandated South Seas islands. Until 1937, these preparations had been virtually confined to the islands of the Marianas and western Carolines; but in that year, under naval supervision, construction activity was extended eastward across the Pacific to the Truk atoll. In 1938, work began among the islands of the Marshall group, which, lying in mid-Pacific, constituted Japan's most advanced base for war with the Western Powers. From this time onward the task of construction and fortifying airstrips in the Marshalls was pushed ahead with considerable urgency. The work, now proceeding


secretly, and in breach of treaty obligation, throughout the whole of the widely-scattered mandated islands area, was consistent with no other purpose than preparation for a war in the Pacific, waged against some or all of the Western Powers.

In view of Japan's withdrawal from international agreements for naval disarmament, the United States had, in 1936, embarked upon an extensive programme of naval construction. Although in 1938 Japan maintained her own huge programme launched in the previous year, her naval construction rate was soon out-matched by that of the United States. From 1939 onwards, American construction figures were substantially greater than those of the Japanese.

This naval rearmament race was not of America's choosing. United States delegates to the London Naval Conference of 1935 had warned the Japanese that it would be the outcome of a failure to agree. The new treaty signed in 1936 between the United States, Great Britain, France and Italy had left the way open for Japanese participation; but again, in 1937, Japan had refused to agree to any terms except those which would giver her a preponderance of naval power in the Pacific. In February 1938 the Konoye Cabinet declined a last American invitation to forestall competitive naval rearmament.


Hirota Requests to Exchange Naval Information

One result of the 1936 Treaty, in which Japan did not participate, had been the renewal of those provisions of the Washington Treaty which determined maximum permitted displacements for capital ships and cruisers, and limited the calibre of the guns which might be mounted upon each. This provision was, however, made subject to a right of escalation in the face of uncontrolled building by a non-signatory power. On 4 November 1937, the Japanese had laid the keel of the Yamato, a 64,000 ton capital ship designed to mount 18" guns.

In February 1938 persistent rumours of building by Japan, in excess of the 1936 Treaty limits, were causing concern in the United States. That country therefore brought the question to Japan's notice, explaining that, if satisfactory evidence of Japanese adherence to the treaty limits were not forthcoming, she must exercise the right of escalation which the treaty gave her. If, however, Japan had elected to exceed the limits set by other naval powers in 1936, the United States would upon receipt of information as to the Japanese construction programme, be prepared to discuss a new limitation as between herself and Japan.

This overture was met by a point-blank refusal either to negotiate or to give information. On 12 February 1938, Foreign Minister HIROTA made the government's reply. Japan,


he said, had no intention of possessing an armament which would menace other countries. Although his government was unable to comply with the American request for information, it saw no reason why the United States should conclude that Japan contemplated a naval construction programme in excess of the limits prescribed by the 1936 Treaty. Within two weeks of this communication being sent, the keel of a second 64,000 ton capital ship was laid in Japan.

Hirota's Policy is Explained in the Words of
the Basic National Policy Decision

In this dealing with the United States, HIROTA's policy as Foreign Minister is plainly revealed. The national policy decision of 11 August 1936, had decreed that Japan "should also be prepared for Britain and America"; and that her naval armaments would be strengthened to an extent sufficient to secure the command of the Western Pacific against the United States Navy. To that decision, in which he had participated as Premier, HIROTA was, as ever, faithful. As in regard to Japanese aims in China, so in regard to Japan's naval construction programme, he did not scruple to resort to deception in order to achieve his purpose. It was a cardinal principle of his policy to have Japan's preparations for war completed behind the facade of friendly foreign relationships.


Each essential feature of HIROTA's foreign policy is to be found in that basic national policy decision, the text of which the Army and Navy had prepared. It was therein declared that Japan, while consolidating her position in Manchukuo, should strive to complete her national strength. It would be her aim to exclude from the continent "the Military Rule Policy of the Powers", and to establish her own order based "on the co-existence and co-prosperity principle". yet Japan "would try to prosecute the national scheme in smooth and amicable manner". and "would always be careful to hold most amicable relations with the Powers".

Above all, HIROTA had been true to the basic aim of "securing a steady footing in the Eastern Continent as well as developing in the South Seas, under the joint efforts of diplomatic skill and national defence". When Prime Minister Konoye had wavered in his resolution to complete the conquest of China, HIROTA had rallied the Cabinet to the pursuit of that unchanging goal.

Japan's Economic Domination and Exploitation of
Her Subject Territories

The month of January 1938 had marked the reinstatement of the Army's long-range economic and industrial planning; for in that month the Planning Board produced, and secured Cabinet acceptance of a new programme of industrial development and economic control, limited in duration to the year 1938.


After its reorganisation in October 1937, the Cabinet Planning Board's close association with the Army had been maintained. On 26 November 1937, Lieutenant-General UMEZU, Vice-Minister of War, was appointed a Councillor of the Board; and Lieutenant-Colonel SATO, then a section staff member of the Military Affairs Bureau, became its Secretary. The Board's plan for 1938 related both to the development of the war-supporting industries and to the regulation of the supply and demand of essential materials.

In January 1938, the Konoye Cabinet's new-found resolve to complete the conquest of China, while continuing to make preparations for other wars, placed an additional strain upon Finance Minister KAYA> The Army's demand for manpower and materials was absorbing both the products of Japanese industry and the men who produced them. Expenditure entailed by war, and by war-supporting industrial development, was rapidly increasing. In the result, Japan was experiencing great difficulty in acquiring foreign exchange with which to finance the imports that she needed.

The progress being made in securing and developing the natural resources of Manchukuo and of the occupied areas of China would serve in some degree to alleviate dependence upon importation from other countries. The development of synthetic industries was a second partial remedy. But these projects in turn demanded increased expenditure, and continued reliance upon


importation during the period of their development. The Planning Board's programme, which the Cabinet adopted on 18 January 1938, curtailed drastically Japan's import quota for the year. It made necessary a reduction in the importation, not only of normal domestic supplies, but even of those commodities considered requisite to preparations for war. New measures of economic and financial control; were therefore demanded.

The remedy which the Cabinet adopted was designed to lessen the financial burdens of the Japanese people at the expense of those subject peoples whose territories Japan was exploiting. It was not a new development. Japan had long dominated the economies of Formosa and Korea through the Banks of Taiwan and Chosen respectively through the ownership of the vast majority of the companies doing business in those countries and through political control. The same methods had been used in Manchukuo. The Industrial Bank of Manchuria, established in December 1936 to secure funds for industrial development, had been authorised to issue debentures up to fifteen times its paid up capital. The facilities afforded by this Japanese-controlled bank had provided easy financing for the development of war-supporting industries in Manchukuo.

Now the Konoye Cabinet planned a similar development in China. In February 1938, the "Federal Reserve Bank of China" was established


upon the same pattern as the Manchurian Bank. The Governor and Vice-Governor of the new bank were nominated by the Japanese government, and the directorate was predominantly Japanese. The sphere of operation was North China, and in that area the currency, which the new bank issued, became the only legal tender. The Federal Reserve Bank of China was designed to stabilize the currency system, and to control the money market. Through such devices as the extension of preferred credits and the manipulation of foreign exchange, it greatly facilitated the economic and industrial exploitation of North China, and provided an instrument for carrying out the Japanese government's industrial planning in that area.

Those industrial plans were already being put into effect; and the new war-supporting industries, which the Japanese promoted, were themselves of importance in establishing Japan's control of the North Chinese economy. In Manchukuo, industrial domination had been achieved through the device of the "national policy company", created by special legislation. Now, in the first six months of 1938, Japan was, by the same device, steadily acquiring control of the industries of occupied China.

The Federal Reserve Bank of China began to do business in March 1938. In the same month the "yen bloc", which, since November 1935 had included Japan and Manchukuo, was


extended to include North China. By this means the way was paved for Japanese investment, and for the exploitation of Chinese industries.

To maintain the value of Japanese currency, the practice of using Bank of Japan notes in occupied territories was discontinued. While the Federal Reserve Bank of China provided a new currency for North China, in Central and in South China worthless military script became the only permitted legal tender. Thus did Japan, while garnering the resources of the continent, bolster her own war-supporting economy at the expense of the peoples whose territories she had occupied. By September 1938, the practice of using Bank of Japan notes, backed by specie, had been discontinued in all the continental territories under Japanese domination.

Thus, also, was Finance Ministers KAYA's control over the Japanese economy consolidated. Since September 1937, he had exercised, through the Bank of Japan, complete control over Japan's finances. The funds of that bank were not no longer liable to uncontrolled dissipation in Japanese ventures on the continent of Asia. Thus protected, they were available to support new measures, taken in the first four months of 1938, to develop, under government subsidies and control, the war-supporting industries of Japan itself.


Industrial Preparations:
The Synthetic Oil and Petroleum Industry

Notwithstanding its financial embarrassments, the Konoye Cabinet was determined to secure Japan's self-sufficiency in the materials of war, at whatever cost that process might entail. The Planing Board's interim programme for 1938 had included a plan for the mobilisation of commodities; and in the first four months of that year new measures were taken to promote and develop the war-supporting industries within Japan. Each such new measure had the effect of increasing the governments' control over industrial development; and each had its counterpart in the Army's five-year plans of 1937. In every case, the government, by assuming an increased financial burden, planned to secure a rapid expansion of one or more of those industries which the Army had designated as vital to preparations for war.

The first steps taken were designed to safeguard and develop the synthetic petroleum industry, which had been created in the latter half of 1937. The Army, in its five-year planning, had decided to enforce a decisive subsidising policy for this industry, so that Japan might reduce her dependence upon importation. A special company would ensure the manufacture of the machinery which the new industry required; and in the meantime, industrial plants would be imported from Germany. Great emphasis would be placed upon the production


of Diesel oil and aviation spirit. Manchukuoan coal resources would be used in the development of the artificial industry. The search for substitute fuels would be stimulated, and the country would be prospected for further hidden resources. A new company would be established to secure an amply supply of funds, and to foster the development of the uneconomic infant industry.

After the outbreak of the China war, no time had been lost in giving effect to these plans; and in January 1938, a new and heavily capitalised company was created by legislation to control the production of synthetic petroleum, and to provide a vehicle for government financing. It was just such a company as the Army had planned.

In March 1938, under a law designed to promote the exploitation of all mineral deposits, the government took power to control prospecting, to stimulate it by subsidies, and even to enter into the prospecting business on its own account.

In the same month, upon the Planning Board's advice, a system of rationing was introduced to limit the amount of petroleum made available for civilian use; and, subsequently, a new national policy company was created to stimulate the production of substitute fuels. So great was the importance attached to the maintenance of oil and petroleum reserves, that the government subsidised, through this new company, experimentation in the production and use of less efficient


substitute fuels.

Although the quantity imported was smaller than in 1937, and despite the demands of the war in China, Japan's reserves of oil and petroleum continued to increase throughout the year 1938.

Other Industrial Preparations for War

March and April 1938 were months of industrial legislation, through which the Army's plans were realised. The new industrial hierarchy, dependent upon state support and responsive to Cabinet control, became an established feature of the Japanese system of government. The Cabinet by placing each industry under the ultimate control of one or other of its Ministers, assumed an increased measure of responsibility for the guidance of the nation's mobilisation for war.

The electric power industry was among the first to be affected. This industry was vital to Japan's preparations for war, because upon its expansion and coordination depended the development of other war-supporting industries. The Army had therefore singled it out for inclusion in its 1937 plans, and had accorded it a special priority in its programme for the industrialisation of Manchukuo. The Army had envisaged a new national policy company, which would,k under governmental supervision, control the production of electric power in Japan; and would promote its development in the manner needed to meet military


requirements. To this plan effect was given in the Electric Power Control Law of March 1938.

Until this time the production and supply of electric power had been in the hands of numerous undertakings; but, under thee new law, all major companies were required to transfer control of their plant to one newly-constituted national policy company. The new company was placed under the government's direct control, and was accorded all the usual privileges of tax exemptions, subsidies and governmental guarantees.

In March 1938, also, legislation was passed to direct and stimulate production of aircraft, which the Army had placed first in importance among the materials of war. Under the new law, some aircraft production plants were placed under the direct control of the government, and all were required to be licensed by the state. The usual steps were taken to relive the industry of financial worries, and so to ensure its rapid expansion.

But the development of the aircraft industry was in turn dependent upon an increased supply of aluminium; for over 70 per centum of Japanese aircraft and aircraft parts were made of that metal. The 1937 five-year plans had therefore placed stress upon the development of the light metal industries. They were to be encouraged by the cheap supply of electric power, and by increasing the scope


of public demand for their product. The new industries were to be capable of quick conversion in time of war to the production of aircraft and aircraft parts.

Until 1932 there had been no aluminium industry in Japan; but its output, appreciable in 1936, had been doubled in the following year. On 28 April 1938, a new light metal manufacturing law was passed with the avowed object of contributing "towards the adjustment of national defence". It instituted the now familiar system of taxation and import duty exemptions, subsidies, and guarantees. All persons engaged in the industry were required to bed licensed; and the government assumed control both of the technique of production, and of the selection of the commodities to be produced. Thus the goal of wartime convertibility was kept in view.

During March 1938, there was one other new law of major importance; and this has already been mentioned in connection with the petroleum industry. The Act fo the Promotion of Production of Important Minerals, passed in that month, placed nearly all mining operations under the direct control of the government. Production was demanded under threat of expropriation, and subsidies were provided to sustain the losses incurred through uneconomic industrial development. This law, which affected the iron, steel, coal, petroleum and light metal industries, brought many submarginal producers into


the field, and involved heavy governmental expenditures. That Japan, at a moment of economic crisis, should embark upon such a measure, affords the clearest proof that the Cabinet was determined to subordinate every other consideration to that of achieving national preparedness for war.

The Army Prepares the National General Mobilisation Law

This flood of new legislation had not been enacted without political incident. In February 1938, the Konoye Cabinet, strengthened in its resolve both to subdue China and to complete Japan's preparations for other wars, faced renewed opposition in the legislature. One group within the Diet was calling for the Cabinet's enforced resignation. Another group had focused upon the electric power bill their opposition to the Cabinet's programme of industrial legislation. This faction commanded the support of the industrialists themselves, who, believing that Japan would not be long at war, were concerned lest the Cabinet's projected measures of uneconomic industrial expansion should involve them in ultimate loss. A third group within the Diet accused the Cabinet of half-heartedness in carrying out the Army's plans.

In these circumstances, the whole programme of mobilisation for war was placed in jeopardy. Enormous quantities of materials were being used, and there was no immediate prospect of their replacement. The Army, at this very moment, was settling its plans and


completing its military preparations for an early war with the Soviet Union. Well-knowing that the period of war would be along one, the leaders of the Army were resolute in their determination that further stocks of war materials should be accumulated, even while the fighting in China continued.

During the period of nearly two years since HIROTA's Cabinet had taken office, the Army had planned and promoted every aspect of the national mobilisation for war. Lieutenant-General UMEZU, who, throughout this time, had occupied the position of War Vice-Minister, was now in even closer touch with the progress of the Army's plans for the expansion and regimentation of the war-supporting industries. In addition to the numerous subsidiary appointments which his office entailed he had become, on 26 November 1937, a Councillor of the Planing Board. The Secretary of that board, Lieutenant-Colonel SATO, was a section staff member of the War Ministry's Military Affairs Bureau.

The plan which the Army no produced reflected the whole of its scheming and achievement during the two preceding years. On 20 May 1936, shortly after UMEZU had taken office as War Vice-Minister, the Mobilisation Plans Bureau of the War Ministry had produced its programme for the control of information and propaganda in time of war. Now in early 1938, that


Bureau produced a new plan which would bestow upon the Cabinet, once and for all, the powers needed to carry out every phase of the national mobilisation for war. This Army plan was in the form of a draft "National General Mobilisation Law", through the enactment of which the Diet would surrender any authority it had to control the Cabinet. Under this law the Cabinet would legislate by Imperial Ordinance. Once enacted, the provisions of the new law could be made operative at any moment which the Cabinet might choose.

The mobilisation law was a necessity, not only for the success of the Army's military preparations, but also to ensure that the industrialists should receive an adequate inducement to cooperate, and security from ultimate loss. Each of these considerations was well-known to SATO.

The Political Crisis of February 1938;
and the Enactment of the Mobilisation Law

The situation which had arisen in the Diet provided a close parallel to that which had occurred in January 1937, when Hayashi succeeded HIROTA as Prime Minister. In each case the Cabinet, pursuant to the army' planning, was engaged in putting into operation large-scale measures of industrial expansion and control. In each case the legislation necessary to achieve this purpose had met with strenuous opposition in the Diet. In each case the supporters of the Army,


believing that the changes contemplated were not of a sufficiently radical nature had concentrated their attacks upon political parties and upon th existing parliamentary system.

This impatience with political parties was not a new development; for it had been expressed by the advocates of military supremacy, whenever they had encountered opposition to their schemes. As early as March 1931, HASHIMOTO had stated his belief that the Diet, which had then aroused the Army's indignation, should be crushed. In January 1932, he had advocated the immediate abolition of political parties, characterising the party system as a dangerous anti-national structure, which must be destroyed "for the sake of the construction of a cheerful new Japan." In December 1936, the same sentiment had been voiced by the military faction when the Seiyukai party had criticised the HIROTA Cabinet's first measures of industrial mobilisation. Now, in February 1938, Konoye, confronted with a Diet united only in its opposition to his Cabinet, was threatened with the same downfall which had overtaken HIROTA in January 1937.

The Cabinet, in this dilemma, adopted the Army's plan. On 24 February 1938, Prime Minister Konoye presented to the Diet for enactment the National General Mobilisation Bill; and called upon SATO to speak in its support. SATO has himself explained


the difficulty and the delicacy of the situation in which he was placed. Upon the acceptance or rejection of this measure depended the goodwill of the industrialists, without whose assistance the plans for a national mobilisation were impossible of achievement. SATO had earnestly desired the task of championing this bill; and, of those persons present before the Diet, he alone was capable of explaining its implications. He sincerely believed that his was the most powerful explanation given. In the result, opposition within the Diet was surmounted and the bill became law.

By adopting the Army's measure as his own, Konoye had silenced the criticism of that faction which had accused him of insufficient diligence in prosecuting the Army's schemes. The Cabinet's position had been consolidated and the acceptance of its industrial programme was assured. The Army had gained the support of the industrialists, and had eliminated a new threat to the progress of the nation-wide mobilisation for war.

Furthermore, the Army had moved one step nearer to the achievement of complete political supremacy in Japan. The Diet, in which the military faction had always seen a potential danger to the attainment of its aspirations, was now fettered. By passing this law, the legislature had thus deprived itself of any control over Cabinet measures relating to war and to preparations for war. From this time onward,


the Cabinet might, without recourse to the Diet, exercise the wide legislative and administrative powers which the new law gave.

The National General Mobilisation Law
and Its Relationship to the Basic National Policy Decision

The National General Mobilisation Law, which was made operative by Imperial Ordinance on 5 May 1938, followed the pattern of war emergency legislation in all countries. Although ostensibly intended solely to facilitate the prosecution of the war in China, it was utilised to the full in giving legal sanction to Cabinet measures in furtherance of the general plans for economic and industrial development.

The law could be extended to cover any and every type of product, raw material and enterprise. It gave the Cabinet virtually unlimited powers to conscript materials, and to control industry and companies. Under its provisions the government might expropriate lands and buildings; authorise the payment of subsidies and compensation; enforce stabilisation measures; prevent the publication of information; and direct the occupational training and education of the Japanese people. Above all, it might direct and conscript the manpower of the nation. At the time the law was enacted, Konoye's Cabinet contained HIROTA as Foreign Minister, KAYA as Finance


Minister, and KIDO as Education and as Welfare Minister.

The provisions of the mobilisation law serve to emphasize the many-sidedness and all-embracing nature of Japanese preparations for war. It was not merely a matter of military of naval or economic preparedness. Every aspect of the national life was to be so ordered and controlled as to produce the maximum pitch of warlike efficiency. The entire strength of the Japanese nation was to be harnessed and developed with this single end in view. The National General Mobilisation Law provided the instrument through which that goal might be achieved.

The measure now taken had its counterpart in the national policy decision of 11 August 1936. It had then been determined that Japan's internal policies would be shaped in accordance with the basic plan; and this--in the words approved by the Five Ministers--consisted in "strengthening the foundation of our country both internally and externally." For that reason, measures would be taken to safeguard the people's livelihoods, to develop their physical strength, and to direct their thinking. The people's will would be strengthened "to tide over the extraordinary emergency", which schemes of expansion and aggrandisement were certain to precipitate.


The Army Explains the Purpose of the Mobilisation Law

On 19 May 1938k two weeks after the National General Mobilisation Law had been put into operation, the Army published in the Japanese press a commentary upon its purposes. It was explained that, although the full story could not yet be told, an attempt would be made to interpret the spirit and substance of the Law as a whole, so that the public might understand its relationship to national defence. Japan, they said, was a country small in area and lacking in natural resources. She faced not only the determined resistance of Generalissimo Chiang Kai-shek in China, but also Soviet armies, fully mobilised and bent upon aggression, in the north. Moreover, she was surrounded by the powerful navies of the United States and of Great Britain. For these reasons great difficulties were entailed in planing Japan's defence, which was now based, not on her own shores, but upon the boundaries of Manchukuo, and of North and Central China.

The people of Japan were warned that the maintenance of these boundaries would call for great determination and very strenuous efforts for many years to come. Nothing less than complete mobilisation of all resources of material and manpower would suffice. Military success would depend chiefly upon the systematic and effective mobilisation of the "synthetic national strength". This


the National General Mobilisation Law was designed to achieve.

The remainder of the statement was devoted to telling the people of Japan what the realisation of the "synthetic national strength" would entail. The first requirement was spiritual power, since the people themselves were the source of fighting strength. By mobilising educational institutions and propaganda organs for a unified campaign, all possible efforts would be made to intensify the fighting spirit of the people, which would enable them to endure any amount of hardship and difficulties.

Manpower would be mobilised in order to adjust the demand and supply of labour; so that, ] as young men were called to the colours, their places in industry would be filled. This transition to a wartime economy would entail government plans for occupational training and direction of labour.

The plans for mobilisation of material resources other than manpower accurately forecast developments, the early progress of which has already been noted. While there was still time, vast quantities of materials for the Army and Navy would be acquired abroad. Production of war materials at home would b increased at the expense of peacetime industries. Therefore, all producing enterprises, as well as import and export businesses, would be unified under government direction.


The government would also take control of all financial credits. It would unify and develop all transportation facilities. It would mobilise science so that the pitch of efficiency might be raised. It would assume responsibility for the collection of information and the dissemination of propaganda at home and abroad, seeking to foster morale and to unify opinion in Japan, while creating a favourable impression in other countries.

The government would also equip itself with long-range flexible plans to meet the varying needs of a general mobilisation, so that the Army and Navy would always be adequately supplied with the muniments of war. Private enterprises would be required to conform to the plans prepared. Control would, as a matter of convenience be exercised by Imperial Ordinances, without recourse to the Diet. A National General Mobilisation Research Commission and various semi-official bodies would be created to administer the law. These, and some self-governing bodies, would assist the government both in the formulation and in the execution of Cabinet policy.


The Army had now Succeeded in Committing Japan
to National Mobilisation for War

In the period which was now ending, the Army had made itself the master of Japan's destiny; and, at the Army's instigation, the nation had embarked upon a programme of aggrandisement through expansion of military power.

Foreign Minister HIROTA, in whose term as Premier the Army's schemes had first been formulated as the national policy, left the Cabinet at the end of May 1938; and at this time also Lieutenant-General UMEZU, whose work had for so long been complementary to HIROTA's, resigned his office. UMEZU had become War Vice-Minister on 23 March 1936, while HIROTA was Premier, and prior to the important Five Ministers' conferences which settled the basis of the national policy. He had remained in that position during the premierships of Hayashi and Konoye.

HIROTA and UMEZU had provided the most important links between Konoye's Cabinet and that of his predecessors, for each had occupied a key position during a period that was remarkable for the steady development and fruition of the Army's planning. One by one the Army's detailed plans had gained acceptance, until at length all opposition within Japan had been overridden.

Japan's military and naval forces were


undergoing continuous expansion. Her growing military strength was still engaged upon the conquest of China. On 19 May 1938 the Japanese forces in Central China captured the town of Hsuchow, thus removing an island of Chinese resistance in an area which had been brought under Japanese control. Although the battle for Hsuchow was not a decisive one, it stimulated Japan's long-deferred hope of crushing all resistance in China.

Meanwhile the Kwantung Army in Manchukuo, in collaboration with the Army General Staff, was making its preparations for war with the Soviet Union. In Japan itself a new fleet was in course of construction; and in the Mandated islands, naval bases were being established in preparation for a Pacific War.

Great efforts had been made to achieve the goal of economic and industrial self-sufficiency, which along would enable Japan to sustain the burden of the wars which the Army had planned. In Japan itself, in Manchukuo, and in the subjugated areas of North and Central China, new sources of vital raw materials were being developed, and new war-supporting industries were being established. The Cabinet had equipped itself with the legal powers required to mobilise for war the entire strength of the Japanese nation. Through regimentation and through propaganda the people of Japan had been made to identify their country's destiny with the scheme of aggrandisement which the Army had propounded.


The Manchukuoan Long-Range Industrial Programme
of May 1938

The fulfillment of the Army's five-year planning demanded that the maximum use should be made of the natural resources and industrial potential of the continental areas which Japan had occupied. In North and Central China the groundwork of such a development was already being laid; but as yet Japan could expect no substantial contribution from those areas.

IN Manchukuo the situation was otherwise; for in February 1937 the Manchukuoan government had embarked upon a second five-year programme of industrial expansion. HOSHINO had shared in the formulation and in the execution of this programme, which formed an integral part of the Japanese Army's 1937 economic and industrial planning.

Even after the Lukuochiao Incident, which revived the China war, no pains had been spared in maintaining the objects of the planning. In November 1937 the Konoye Cabinet had resolved that the promotion of heavy industry in Manchukuo was essential to Japan's purpose; and the Manchurian Heavy Industry Corporation, a new national policy company, had been created to give effect to the Cabinet's decision.

In May 1938 the Japanese-dominated Manchukuoan government drew up an even more extensive programme of war-supporting industrial development. It was then decided to utilise the Manchurian Heavy Industrial Corporation in


achieving this new project. HOSHINO, as Chief of General Affairs of Manchukuo, had a decisive voice in the inception of the new scheme, which was the outcome of the Konoye Cabinet's resolution of November 1937.

The new plan laid great stress upon the cultivation of even closer ties between Japan and Manchukuo. In the light of experience already gained, the original 1937 programme was radically revised, so that Manchukuo might bear an increased share in the burden of Japanese preparations for war. The need for revision was attributed to changes in the international situation.

The whole purpose of the new plan was to increase the output of those industries in which Japan was deficient, and which the Japanese Army had singled out as essential to the needs of war. The production of iron and steel would be greatly expanded for the express purpose of meeting Japan's increasing requirements. Mining operations would be extended to ensure Japan of coal supplies. Electric power facilities would be increased and production of machine-tools would be promoted with the object of encouraging further industrial development. New chemical industries, ancillary to the production of aircraft and munitions, would be established. New aircraft manufacturing plants would be built in widely separated areas. Manchukuo would aim at the production of five thousand aircraft and thirty thousand automobiles.


each year. Systematic efforts would also be made in increase the production of gold, for upon that commodity Japan's foreign purchasing power was in part dependent.

The revised plan required an estimated capital expenditure of nearly five thousand million yen, which was little less than twice the figure budgeted for in 10387. Rather less than half of the required amount was to be raised in Japan.

The Manchukuoan government would set up an Economic Planning Commission to superintend the execution of the scheme. This new body was to carry out in Manchukuo much the same functions which the Planning Board exercised in Japan. Under is auspices a new and complete survey of the country's natural resources would be made. Trade schools for training skilled labour would be established, and plans would be prepared for carrying out the economic and administrative readjustment which the revised programme demanded.

The Economic Crisis of May 1938
Threatened the Army's Long-Range Planning

The measures which had already been taken to give effect to the Army's planning had placed a steadily increasing burden upon the Japanese economy. Despite military victories and advances, the war in China was still a constant drain upon Japanese resources of material and manpower. Furthermore, the Army had counted upon China as a vital source


of raw materials, and as an area in which the war-supporting industries might be developed.

The Army, in disclosing the purpose of the Mobilisation Law, warned the Japanese people once again that the continuation of the war in China must not be permitted to obscure the basic objects of the national policy. North and Central China, together with Manchukuo and Japan itself, were represented as constituting a single sphere, the integrity of which must be maintained, not only against local resistance, but also against both the Soviet Union and the Western Powers. The principal object of the Army's planning, now as at all other times, was the accretion of armaments and of other war potential upon a scale sufficient to ensure victory over each of these formidable adversaries. The Army was at this time gravely concerned lest the struggle in China might cause the breakdown of its long-range planning.

Since the resumption of fighting at Lukouchiao, Japan had always been faced with the danger of economic collapse. Far-reaching measures of industrial, commercial and financial control had been taken in an attempt to avert this threat. The revised programme for industrial expansion in Manchukuo showed again the manner in which Japan was exploiting those continental areas which she already controlled. The people of these territories had been made to bear an increasing share in the expansion of the industries of war, and in supporting the over-taxed economy of Japan.


Nevertheless, it became apparent during May and June 1938 that Japan was beset by a severe economic and financial crisis. The Army, having won control of the Japanese government and people, faced a new challenge to the achievement of its ambitions. The adoption of its mobilisation programme had been secured. The question was now whether the Japanese nation could withstand the rigours which the Army's policy entailed.

It was in these circumstances that, on 5 May 1938, the Cabinet had invoked the powers bestowed upon it by the National General Mobilisation Law. In its commentary upon the purposes of that law, the Army reaffirmed its determination to proceed with the national mobilisation for war, whatever difficulties might stand in the way of its achievement.

The Cabinet Reorganisation of May 1938

Ten days later the Cabinet was reorganised to meet the situation which had arisen. HIROTA left the Foreign Ministry; and KAYA who, as Finance Minister, had guided and controlled the subordination of the Japanese economy to the requirements of the Army's mobilisation plans, also resigned his post.

To meet the threatened breakdown of the Army's plans, the Cabinet was strengthened by the addition of two military men. Lieutenant-General ITAGAKI succeeded Sugiyama as Minister of War. Since the Mukden Incident ITAGAKI


had been prominently associated with the Army's schemes of expansion and aggrandisement through military power. From 23 March 1936 to 1 March 1937 he had served as Chief of Staff of the Kwantung Army, and since then he had taken part as a Divisional Commander in the conquest of China.

General ARAKI, who now became Education Minister, had been a leader of the military faction during the early years in the development of the Army's schemes. In July 1931, two months before the Mukden Incident occurred, he was recognised as a prominent member of the Kokuhonsha, a secret society designed to foster the spirit of nationalism. In December of the same year, when the Inukai Cabinet took office, ARAKI was appointed War Minister at the instance of the younger Army officers. This positions he retained under Inukai's successor, Saito.

As War Minister during 1932 and 1933 ARAKI advocated the adoption of an emergency policy, which would enable Japan to perfect her preparations for war. He was acknowledged as a leading representative of the powerful militarists. In his radio speech of June 1933 he was the first to reveal the full extent of the Army's long-range planning, and to exhort the Japanese people to cooperate in its fulfillment.

ARAKI's conduct during 1933 caused dissension within the Saito Cabinet; for it was realised that the policy which he represented was isolating Japan from the rest of the world. In December 1933 Finance Minister Takahashi


attributed to the militarists of the Army and Navy the deterioration which had taken place in Japan's foreign relations; and in the following month ARAKI left the Cabinet. he continued, however, to lead the faction which had demanded the conquest of Manchuria, and which advocated further schemes of expansion through military power. Since 23 January 1934 ARAKI had held office as a Supreme War Councillor; and, since the institution of the Cabinet Advisory Council on 15 October 1937, he had been, in addition, a member of that body.

KIDO< under whbose guidance the education system of Japan had been made to serve the purposes of the national mobilisation for war, remained in the Cabinet as Welfare Minister. He realised that it was essential to the achievement of the Army's planning that the war in China sould be ended. He did not over-estimate the importance of the victory at Hsuchow; but he did belive that already there was talk of peace among the Chinese. He considered, therefore, that Japan should now plan a new military offensive in the form of an advance upon the city of Hankow.


The Konoye Cabinet Takes New Steps
to Achieve the General Mobilisation for War

The economic and financial crisis was accentuated on 11 June 1938, when the United States, in view of Japan's repeated violations of treaty obligations in the conduct of the China war, placed a moral embargo on the sending of aircraft, armaments, engine parts, aerial bombs and torpedoes to Japan.

On 23 June 1938, the reconstituted Cabinet, of which ITAGAKI, ARAKI and KIDO were now members, met to decide what measures should be taken to maintain the goal of national preparedness for war. The decision made was a vindication of the forecast contained in the Army's commentary upon the purposes of the Mobilisation Law. Great emphasis was laid upon the Cabinet's determination to subordinate all other considerations to that of fulfilling the aims of the basic national policy. Measures vital to the national mobilisation for war would be enforced immediately.

The Cabinet's examination of the national economy disclosed that during the current year Japan's exports had fallen off by one-third. For this and for other reasons her foreign trade balance was extremely precarious. If the situation should become worse, it would be very difficult, in case of emergency, to procure arms and other supplies, because


of lack of foreign exchange with which to procure them. Even as the position now stood, it would be difficult to achieve the targets set in the 1938 plan for the mobilisation of commodities. The success of the five-year planning was already endangered.

The situation was, in the Cabinet's opinion, too greave to be met by day to day expedients. Such an approach to the problem would gravely hinder the efforts being made to meet immediate military requirements, while attaining the expansion of productive power which Japan's present situation demanded.

The drastic measures decided upon involved a further curtailment in non-military supplies. SEven within the field of war-supporting industrial development there would be economies. In pursuance of this policy of retrenchment, measures would be taken to maintain the stability of the exchange rate, to keep up the supply of munitions, to promote exports, and to safeguard the people's livelihood.

The wide powers given by the National General Mobilisation Law would be utilised to this end. Prices would be fixed, and commodities would be rationed. Savings would be encouraged, war profits would be restricted, and was materials would be salvaged. Funds in foreign countries would be conserved, and Japan would retaliate against boycotts of her foreign trade. The administration of foreign trade control would be unified in order to stimulate exportation. The production of munitions would be increased.


In particular, drastic steps would be taken to conserve essential materials through the regulation of supply and demand. By linking exports of finished products with imports of materials therefor, the Government would ensure that commodities destined for ultimate export did not become absorbed in the home market. The minimum quantity of imports necessary to maintain the nation's livelihood, its exports and its barter trade, would be permitted. With this exception, only those imports which were needed to meet military demands and to ensure the production of munitions would be allowed.

Itagaki and Araki on the National Mobilisation for War

The two new members of the Cabinet were quick to lend their support to the programme of national mobilisation. On 26 June 1938, three days after the Cabinet had met, War Minister ITAGAKI, in an interview with the press, reflected the Cabinet's recognition of the economic difficulties which beset Japan, and his own determination that those difficulties should not stand in the way of the conquest of China. He said that Generalissimo Chiang Kai-shek did not count upon


victories in the first line of battle, but hoped to overcome Japan by imposing a burden upon the country's resources over a lengthy period.

ITAGAKI urged upon his readers the necessity of a long preparedness for war, expressing hi sown conviction that Japan was able to withstand future hostilities over an indefinite period. he exhorted the Japanese people to enter into the spirit of the Cabinet's programme for the conservation of national reserves; and to extend unstinting cooperation towards the authorities.

In commenting upon the international situation, ITAGAKI said, "It is natural that third powers are resorting to various manoeuvres, for the sake of protecting their interests in China. It should suffice for Japan to follow its own policy without fear or hesitation".

On 7 July 1938, the first anniversary of the Lukouchiao Incident, Education Minister ARAKI made a speech in which he expressed the same views as ITAGAKI. In its general tenor this address differed little from the one which he had given as War Minister in June 1933; for, on each occasion, ARAKI looked forward from the difficulties of the moment to the attainment of the Army's ultimate goal of world domination.

"We must be prepared", he said on this occasion, "for the aggrandisement of national strength required to wage long-period war."


"With deep understanding of the national thought, we should clarify the absolute superiority of our national constitution, and the thought of Hakko Ichiu or the unification of the world under one roof should be pervaded to the whole world."

"National Mobilisation must be achieved both in the material and in the spiritual sense, which will promote the conspicuous ever-progressing prosperity of the nation, who must not be left as a power in East Asia only, but must be promoted to the world's Japan as the leader of the new era; and the proper magnanimity and full vigour of her people should be cultivated so that the mission given to her may be thoroughly fulfilled."

Despite the confident and aggressive tone which ITAGAKI and ARAKI had adopted, there was clearly discernible in the statements of each an undercurrent of deep anxiety concerning the outcome of the campaign in China. While that issue remained unsettled, the Army;s long-range planning was in jeopardy.

Changes in the Army Staff
Accompanied the Cabinet Reorganisation of May 1938

When the Cabinet reorganisation of May 1938 took place, changes were also made in Army Staff appointments. Lieutenant-General TOJO was recalled form service in the field to replace UMEZU as Vice-Minister of War. As Chief-of-Staff


of the Kwantung Army since 1 March 1937, TOJO had been intimately connected with the Army's planning and preparations for war with the Soviet Union. It was he who had advised the Army General Staff to strike a blow at China before attacking the U.S.S.R. After the fighting in China had begun, military preparations for war against the Soviet Union had continued to absorb his attention; and, in carrying out that work, he had been in close touch with UMEZU.

On 18 June 1938 Lieutenant-General DOHIHARA, who had commanded a division in the Japanese advance southward from Peiping, was recalled from China and attached to the Army General Staff. DOHIHARA, like ITAGAKI, had taken a prominent part in the planning and execution of the Mukden Incident, and in the subsequent development of the Army's plans. He brought to Tokyo first-hand knowledge of the situation in China.

War Vice-Minister TOJO received during June 1938 many other appointments, each connected with some aspect of the national mobilisation for war. Not even his predecessor UMEZU had held positions so numerous or so diversified. TOJO became a Councillor of the Planning Board, of the Manchurian Affairs Bureau, and of the Information Bureau. He was appointed also to the new National General Mobilisation Council set up pursuant to the provisions of the Mobilisation Law. He became Chief of Army Air Headquarters, and a member of the Air Enterprise Investigation Committee. He


joined committees concerned with the automobile, ship-building, electric power and iron industries; and became a member of the Scientific Council. The affairs of the Navy did not escape his notice, for he became also a member of the Naval Council.

Lieutenant-Colonel SATO continued to provide a second link between mliiltary preparations and other aspects of the general mobilisation for war. He had, since 26 November 1937, combined the functions of Secretary of the Planning Board with those of a section staff member of the War Ministry's MIlitary Affairs Bureau.

A New Offensive in Central China: July 1938

While the Cabinet took steps to maintain the supply of war materials, the Army General STaff was engaged upon the scheme which KIDO had favoured. During June 1938, they drew up operational plans for a new major offensive in Central China. Approximately four hundred thousand experienced troops were to take part in this advance under General HATA's command. The city of Hankow was their objective. The campaign, if successful, would close the breach which separated the existing puppet regimes in the north and in the south.

The reconstituted Cabinet was determined that a supreme effort should be made to end Chinese resistance, so that the programme of mobilisation for war should no longer be imperilled. "We will not lay down arms", said


General ARAKI in his speech of 7 July 1938, "until anti-Japanese China is completely crushed to the extent that she cannot stand up again".

In July 1938 the offensive began, and during July and August minor victories were gained as more Chinese towns and villages were enveloped in the tide of the Japanese advance. There was, however, still no indication which would justify the hope of a Chinese capitulation.

COntinued Preparations for War with the Soviet Union:
The Army Begins Negotiations for a Military Alliance
With Germany

While the new offensive in China was being launched, the Army continued to make ready for the expected war with the Soviet Union. On 10 June 1938, TOJO, the new War Vice-Minister, received an official communication concerning those military preparations with which he had been so closely concerned as Chief of Staff of the Kwantung Army. The Japanese Army in Inner Mongolia was making a study of the strategic areas bordering upon the U.S.S.R. The Chief of Staff of that army also reported that the natural resources of Mongolia were under survey, and that the materials which had already been acquired were being examined.

While the Cabinet struggled to achieve the national mobilisation for war in the face of economic difficulties, and attack upon the Soviet Union was still the project uppermost


in the minds of the military faction. Both War Minister ITAGAKI and Education Minister ARAKI laid enormous stress upon the need for preparation for a long war. "Japan's determination to fight to a finish with China and Russia", said General ARAKI on 11 July 1938, "is sufficient to carry it on for more than a decade."

With this determination in mind, the Army took upon its own initiative, a new and important step towards the attainment of its goals of military conquest. T^he programme of national mobilisation for war being now accepted and in course of achievement, the Army's attention was directed towards negotiating with Germany a closer alliance, which would reinforce Japan's own military strength. At the instigation of the Army General Staff, Major-General OSHIMA, the Japanese Military Attaché in Berlin, opened negotiations with the German government for a military alliance between the two countries. Such a conjunction of forces would complete the Army's preparations for war with the Soviet Union.

From this time onwards Japan's relations with Germany are of significance, not merely as one aspect of Japanese preparations for war, but as an essential factor in determining the course of events within Japan itself. the new Germany, which had arisen under Hitler since the year 1933, was, like Japan, engaged in preparing for wars of conquest and territorial expansion. The two nations, each intent upon


the realisation of its own schemes, entertained little regard for each other, but harboured common designs upon the Soviet Union. These had found expression in the Anti-Comintern Pact, concluded in November 1936.

A military alliance with Germany had long held a place of importance in the Japanese Army's planning. the need for it became more urgent as the time for attacking the Soviet Union appeared to draw near. In order that the origins and development of this phase in the scheming of the military faction may be understood, it is first necessary to survey broadly the progress of the Army's plan for making war on the Soviet Union.

The Army's Intention to Attack the Soviet Union
Had its Origins in the Conquest of Manchuria

Japan's antipathy towards the U.S.S.R., which led her to make common cause with Germany in the Anti-Comintern Pact, was inherent in the very nature of the Army's ambitions. When, in 1924, Okawa first proposed schemes of territorial expansion, he had advocated the occupation of Siberia. HIROTA, as Ambassador in Moscow in 1931, was also of that opinion. He then expressed the view that, whether or not Japan intended to attack the U.S.S.R., she must have strong policies towards that country, being ready fo war at any time. The main object of such preparedness was,


in his opinion, not so much as a defence against Communism, but rather as a means of conquering Eastern Siberia.

Already there was a second reason for regarding the U.S.S.R. as an enemy. In 1930 military spokesmen, who were then campaigning for popular approval of the Army's plan to conquer Manchuria, had stressed that Japan just defend that territory against the Soviet Union. In April 1932, when the new state of Manchukuo had been established, the U.S.S.R. and the Western Powers were each acknowledged as enemies. Colonel ITAGAKI, then a member of the Kwantung Army Staff, received appointment to a new committee which would promote the interests of "the allied and friendly Nippon in her struggle against het Anglo-Saxon world, as well as against Comintern aggression".

Some three months later the Japanese Military Attaché in Moscow reported to his government that a Russo-Japanese war was in the future unavoidable. He urged a non-committal attitude in regard to the proposal for a non-aggression pact made to Japan some six months earlier by the Soviet Foreign Commissar. On 13 December 1932, after five further months of delay, Japan rejected this proposal upon the ground that differences outstanding between the two countries had rendered negotiations for such an agreement untimely. In February 1933, Japan again refused a renewed offer to discuss such an agreement. Two months later, Lieutenant-Colonel SUZUKI of the Army General Staff said that any such


proposal must be denounced, since the Soviet Union was the absolute enemy, which aimed to destroy the national structure of Japan. The Soviet Union was thus recognized by the military faction as the power which, above all others, stood between Japan and the achievement of the goal of supremacy in East Asia.

The steady progress made in military planning and preparation for war with the U.S.S.R. has been mentioned frequently in the course of this narrative. By December 1933, the Japanese Army in Korea was already making preparations "in consideration of the time when we open hostilities against Soviet Russia". General ARAKI even then had designs upon Mongolia as a stepping-stone for such an attack.

In November 1935, SHIRATORI, then Minister in Sweden, told Arita that the time was ripe for an attack. He believed that Japan should immediately, by force or by threat of force, shut out the Soviet Union from East Asia.

On 23 March 1936, after HIROTA's Cabinet had taken office, ITAGAKI, as Chief of STaff of the Kwantung Army, had taken measures to bring Outer Mongolia within the orbit of Japan's new order". After 11 August 1936, when the basis of Japan's national policy was decided, preparations directed against the Soviet Union were intensified to enable Japan "to cope with


any force which the U.S.S.R. can mobilise in the Far East".

It has been seen that the revival of the war in China was a part of the Army's plan of expansion which included an eventual attack upon the U.S.S.R. Before and after the fighting began at Lukouchiao, military preparations for war with the U.S.S.R. had been maintained and accelerated. The Kwantung Army in close collaboration with the Army General Staff, had made its dispositions for an immediate onslaught, to be launched at the earliest possible moment.

If the attack were left fo ten years, SHIRATORI had said in November 1935, the Soviet Union might become too powerful to touch; but the chances of immediate success were good. There was at that time, he added, no other country on earth which could become a real menace to Japan. the cession of Sakhalin and of the Maritime Province of Siberia should be demanded at a reasonable price. The Soviet Union should be reduced to a "powerless capitalistic republic", the natural resources of which would be rigidly controlled.

The Army Defers its Plans for an Attack
On the Soviet Union: August 1938

With this compelling sense of urgency, the Army had fretted at Japan's increasing commitments in China, and at the precarious position


into which her economy had lapsed. Military leaders had resolutely maintained their programme of preparations for war with the U.S.S.R. and had turned to Nazi Germany for support. In July 1938, after ITAGAKI and TOJO had been installed in the War Ministry, the Army's impatience to launch an attack upon the Soviet Union found an immediate outlet.

At the beginning of July 1938 Japanese guards on the Soviet border in the region of Lake Khassan were strengthened; and in mid-July, SHIGEMITSU was despatched to Moscow to secure acceptance of Japanese demands for certain territory in that area. The ground in dispute was an eminence of strategic value.

SHIGEMITSU adopted a peremptory attitude throughout these negotiations; and made, on 20 July 1938, a formal demand for the withdrawal of Soviet troops, upon the pretext of Japan's obligations to Manchukuo.

On the following day War Minister ITAGAKI, together with the Chief of the Army General STaff, attempted to obtain the Emperor's sanction to launch at attack at Lake Khassan, so that Japan's demands might be enforced. It was falsely represented to the Emperor that th Army's policy in this matter was supported by the Foreign and Navy Ministries. On the next day, 22 July 1938, the scheme was disclosed to, and approved by, the Five Ministers' Conference.

On 29 July 1938, the Japanese forces at Lake Khassan attacked the Soviet border guards. The fighting thus began continued until


11 August 1938, by which time the Japanese forces employed in the operation had been routed. Thereafter Japan negotiated terms of peace, leaving the Soviet Union in possession of the disputed area.

The fighting at Lake Khassan will be discussed fully in a later section of this judgment; but the circumstances in which the attack occurred are of importance in the present narrative. The scheme was promoted and put into effect upon the initiative of the Army. War Minister ITAGAKI had long believed that war with the Soviet Union was inevitable. His Vice-Minister, TOJO, had supervised the detailed planning and preparation for such a war. The attack occurred at a time when the Army was negotiating with Germany for a new military alliance, directed principally at the U.S.S.R. It was a product of the Army's planning to crush the influence of the Soviet Union in the Far East.

Japan's defeat at Lake Khassan caused an abrupt revision of the Army's plans. On 25 August 1938, Colonel SATO, as a spokesman of the War Ministry, expounded the Army's policy to the assembled Chiefs of the Police Bureau. In a speech which discussed the Army's resolves and the nation's difficulties, he revealed a new attitude towards the projected war with the Soviet Union. He warned his audience that military preparations must be continued, for such a war might break out at any time; but he said emphatically that it would be disadvantageous for Japan to provoke such a war at the present time. "If, however, a war


with Russia is unavoidable", he added, "it will be necessary for Japan to seek a proper chance after her armament and production shall have been expanded--this should be after 1942."

A curb had been imposed upon the impetuousness of the Army and its supporters. The leaders of the Army had resolved once more to follow the principles laid down in the basic national policy decision, which demanded, first and foremost, 6the establishment of Japan's "new order" in China, and the completion of preparations for war.

The U.S.S.R. was, however, still regarded as a principle enemy; for that country stood between Japan and the attainment of the goal of supremacy in East Asia. SATO made it clear that Japan had not abandoned its ultimate goal of forcing war on the Soviet Union. He urged that objective as a primary reason for completing the national mobilisation. He reaffirmed the Army's belief that the Anti-Comintern Pact with Germany and Italy should be strengthened. But his speech disclosed that, as a result of its discomfiture at Lake Khassan, the Army was determined to achieve in greater measure the repletion of the national strength, before voluntarily undertaking any further liabilities.

Designs Upon the Soviet Union
Led the Army to Seek a German Alliance

Hitler came to power in Germany in 1933; and the Japanese Army, being then intent upon preparing for war with the Soviet Union, took an immediate interest in the new regime. In


March 1934, while the Okada government was in office, Colonel OSHIMA was appointed Military Attaché in Berlin.

Upon the instructions of the Chief of the Army General Staff, OSHIMA was ordered to watch and investigate the stability of the Nazi regime, the future of the German Army, the state of relations between Germany and the Soviet Union, and, in particular, the relations between the armies of those two countries. OSHIMA would also collect and report information relating to the Soviet Union. He would try to discover what would be the German attitude, in case the U.S.S.R. should become involved in war.

OSHIMA took up his new appointment in May 1934, and in the spring of 1935 he learnt from von Ribbentrop of German willingness to conclude an alliance with Japan. This information he conveyed to the Army general STaff. Lieutenant-Colonel Wakamatsu, who was sent to Germany to investigate the proposal, arrived in Berlin in December 1935.

Already some, at least, of the military faction were confident of German support in case of war with the Soviet Union. "Since the relationship of Germany and Poland with Russia are in a same position as ours", wrote SHIRATORI to Arita in his letter of 4 November 1935, "there is no need for use to try to specifically weave understanding with them. once the war breaks out they will surely rise on our side. The only trouble is England".

In Berlin, Wakamatsu and OSHIMA held discussions with the German authorities, and


advised them that the Army General STaff was in favour of a general alliance between the two countries. This stage in the negotiations having been reached, the proposal was referred by the Army to the Cabinet. Meanwhile, HIROTA, who had five years earlier advocated the seizure of Soviet territory, had become Premier; and Arita, the recipient of SHIRATORI's confidences, was his Foreign Minister.

In the spring of 1936, several months before the basis of the national policy was finally decided, HIROTA's Cabinet took up the Army's proposal. Ambassador Mushakoji, newly arrived in Berlin, was able to confirm that Germany eagerly desired cooperation with Japan. Protracted negotiations resulted in the signing of the Anti-Comintern Pact and a secret military agreement, both of which were ratified by the Japanese Privy Council on 25 November 1936.

The Relationship Between Japan and Germany
After the Conclusion of the Anti-Comintern Pact

The Anti-Comintern Pact was not the general military alliance which the Germans had proposed, and which the Army General STaff had favoured. Although the August COnference of Five Ministers had already committed Japan to a forthright anti-Soviet policy, the pact was framed as a purely defensive measure, designed to prevent advance of the Soviet Union into East Asia. FOreign Minister Arita explained it in this light to the Privy Councillors, and was careful to disavow approval of German domestic policies.


Public opinion in Japan was not yet prepared for an alliance with the Germans, and this fact had imposed a limitation upon the Cabinet's contractual powers.

Yet, in effect, this agreement furthered Japan's aggressive policy against the U.S.S.R. HIROTA had obtained assurances from the Germans that the spirit of the secret


agreement would alone be decisive in determining their attitude towards the Soviet Union. If occasion should arise, that agreement was to provide a basis for a further development of the relationship between the two countries.

Furthermore, Arita himself belied the contention that the pact was defensive in nature, for he assured the Privy Councillors that the Soviet Union was behaving reasonably in all of its transactions with Japan. He did not himself believe that the U.S.S.R. would initiate any affair, even though Japan's preparations for war should not be adequate. Arita hoped also that the pact would strengthen Japan's position in her dealings with China.

In reality, the Anti-Comintern Pact was concluded in an attempt to obtain the advantage of German support against the Soviet Union and in China, without alienating public opinion in Japan, and with the minimum possible degree fo commitment on Japan's part.

These same considerations governed the subsequent development of Japan's relationship with Germany. After the fighting had begun at Lukouchiao, Japan attempted unsuccessfully to justify her actions in China as a struggle against Communism, carried out in pursuance of the objects of the Anti-Comintern Pact.


Chapter 4, continued

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