Chapter V
Japanese Aggression Against China
Sections III-VII

Section III.
The Plan to Advance Further Into China

Japan's occupation of Manchuria and Jehol was completed when the Tangku Truce was signed in the spring of 1933. Jehol, facing another Inner Mongolian Province of Chahar on the west and the North China Province of Hopeh on the south, became the frontier of the newly formed puppet state of Manchukuo. If Japan were to advance further into China from the territory she had already occupied, her advance would be from Jehol westwards into Chahar or southwards into Hopeh, besides the other route which linked Manchuria with the rest of China through the narrow corridor of the Liaoning Province around Shanhaikwan on the eastern end of the Great Wall.

On 17th April 1934, the Japanese Foreign Office issued the "Amau Statement" warning the Powers who subscribed to the Nine-Power Treaty (Annex No. B-10) that the Japanese Government would not tolerate any interference with her plans in China. Although HIROTA later explained, upon inquiries, to the American Ambassador Grew, that the "Amau Statement" had been issued without his approval or knowledge, the fact remains that the "Amau Statement" truly represented Japan's policy towards China. Already, it appeared possible that Japanese ambitions in regard to China had not been satisfied by her occupation of Manchuria and Jehol. Very shortly thereafter, in May and June 1935, there took place two incidents, of trifling importance when compared with the demands based by the Japanese upon their occurrence, which resulted in the position of the National Government of China on both the Hopei and the Chahar fronts being substantially weakened.


The Hopei Incident

In the middle of May 1i935, two Chinese newspapermen were assassinated by unidentified assailants in the Japanese Concession in Tientsin. The journalists were said to have been pro-Japanese in sentiment. UMEZU was then Commander of the North China Garrison Forces, and with his approval, certain demands were presented by his Chief of Staff to General Ho Ying-Chin, head of the Chinese military organization in Peiping. on the 10th of June 1935, the incident was settled, the Chinese authorities agreeing to withdraw the Chinese 51st Army from the province of Hopei; to close the party offices and to ban all party activities of the Koumintang in that province, and to ban all anti-Japanese activities in that province.

The above settlement is the so-called "Ho-UMEZU Agreement".

The defense submit that no pressure of any kind was put upon the Chinese authorities to induce them to agree to the above major limitations on their sovereignty over the great province of Hopei. They say that the Japanese made no more than some "suggestions" which might improve future relations between the nations. In this connection, the evidence of the defense witness, Kuwashima, should be noticed. He was then Director of the Bureau of Asiatic Affairs in the Japanese Foreign Office, and Sino-Japanese relations were his direct concern. He testified that he learned from the Japan Legation at Peiping that the Japanese had made "a considerably strong demand" upon the Chinese. A consideration of the whole of his evidence makes it plain that Kuwashima understood that the Chinese had been presented with an ultimatum. There is also an entry in the Harada-Saionji


Diaries in which Okada, the then Premier of Japan, is recorded as having said that "in the beginning only an exceedingly light, friendly warning" had been intended "form which such a serious thing had resulted." When, on 30th May 1935, KIDO drew the attention of SHIGEMITSU, then Vice Minister of Foreign Affairs, to a report in the morning newspaper that the Japanese Garrison in North China had lodged a momentous claim against the Chinese government, SHIGEMITSU did not deny the report, but rather speculated as to the personalities in the Japanese Army who were responsible for such action.


The North Chahar Incident

In June 1935, about the time when the Hopei incident was being settled by the "Ho-UMEZU Agreement", four members of the Japanese Army entered the Changpei District of Chahar province. This is the southwestern part of Chahar, a little to the north of the Great Wall. As they did not have the required permits from the Chahar Provincial Government, they were taken to the headquarters of the Chinese Divisional Commander, who communicated with the general in command of the Chinese 29th Army. The latter ordered their release and that they be allowed to continue on their projected journey to Kalgan and Peiping, but with the warning that the appropriate permits must be obtained in future. The matter was at first taken up by the Japanese Consul at Kalgan, who represented to general Ching, Deputy Commander of the Chinese 29th Army, that the Chinese Guards had insisted on searching the Japanese personnel, had pointed rifles at them, had detained them some four or five hours at Divisional Headquarters, and had thus insulted the Japanese Army. Very shortly thereafter, the Consul stated that the matter was very grave and was beyond his power to settle. The matter had been transferred to the army. In December 1934, MINAMI had become Commander-in-Chief of the Kwantung Army and ITAGAKI had become his vice-chief of staff. DOHIHARA, then attached to the Kwantung Army, was appointed to negotiate with General Ching. In the end, it as agreed that the commander of the regiment concerned and the judge advocate of the division concerned should be dismissed and punished.


These measures, one would have thought, should have amply met the occasion, if these officers had been in the wrong. By far the most important provisions of the agreement, however, are those which followed, and they are largely, if not wholly, unconnected with the incident. All units of the Chinese 29th Army were to be withdrawn from the districts north of Changpei, that is to say, from substantially the whole of Chahar province. the maintenance of peace and order there was to be entrusted to the Peace Preservation Corps, an organization of the nature of a police force. In the future, no Chinese were to be permitted to migrate to and settle in the northern part of Chahar province. No activities of the Koumintang were henceforth to be permitted in Chahar province. All anti-Japanese institutions and acts in Chahar province were to be banned. This is the so-called "Ching-DOHIHARA Agreement".

Again the defense submit that no pressure of any kind was put upon the Chinese authorities to induce them to submit to the above major restrictions on the sovereignty of China over the great province of Chahar. General Ching in his evidence calls it a "temporary settlement" accepted by the Chinese Government "in order to secure peace and under pain". Thus, by June 1935, in less than two months, and nominally in settlement of two incidents of trifling importance in international affairs, the Japanese right flank in Jehol had been freed from any immediate threat of attack from Chahar; two Chinese armies, though to be hostile to the Japanese, had been removed from Chahar and Hopei, and all activities of the Chinese National Party and all anti-Japanese activities had been banned in both provinces.


Inner Mongolian Autonomous Government

In the beginning of 1935, Prince Teh, the leader of the Mongols of Inner Mongolia, was striving to set up an autonomous Mongolian Government there. The subsequent history of this government is taken from the evidence of General Tanaka, Ryuichi, a witness whom both prosecution and defense adduced from time to time, as occasion demanded, and when both prosecution and defense cross-examined as a witness of no credit, again as occasion demanded. In this matter of the establishment of the Inner Mongolian Autonomous regime there is no reason to distrust his account and he was certainly in a position to be familiar with the details.

Tanaka's account of this matter follows. MINAMI and ITAGAKI gave earnest support to the establishment of an Inner Mongolian Autonomous Government, which they intended to be subservient to the wishes of Japan. In April 1935, MINAMI sent Tanaka and another officer to interview Prince Teh with a view to establishing such a government, and Prince Teh did not at this time come to terms. It should be noticed that there now followed the so-called "Ho-UMEZU" and Ching-DOHIHARA Agreements of June 1935, the latter of which substantially affected the northern part of Inner Mongolia, the province of Chahar. According to Tanaka, in August 1935, MINAMI had an interview with Prince Teh at which the Prince promised close cooperation with Japan and MINAMI promised financial assistance to the Prince. In December 1935, MINAMI sent two battalions of cavalry to assist Prince the in taking over the northern part of Chahar province. On 11th February 1936, Prince Teh transferred the seat


of his autonomous regime from Pailinmiao, in Suiyuan province, to West Sunito, and Japanese civilians were sent there to act as advisers to him.

There is a significant cable, dated 2 October 1935, from the Secretary General of the Japanese Embassy at Peiping to Foreign Minister HIROTA inter alia to the following effect: "the Japanese Forces' Mongolian Policy is making steady progress as I and Consul at Changchiakou repeatedly reported to you. The other day Major General DOHIHARA made a trip from Changchiakou to Changte and back and saw the Governor of Chahar Province and Prince Teh; his mission was no doubt to promote the Inner Mongolian self-government."

References will also be found in the Japanese Army plan for dealing with North China, transmitted to the Japanese forces in China on 13 January 1936, which make it plain that this Inner Mongolian Autonomous Government was supported and controlled by the Kwantung Army. This document will be considered more fully a little later.

Attempt to Set Up a North China Autonomous Government

General Tanaka testified that in September 1935, MINAMI sent DOHIHARA to Peiping with orders to set up an autonomous regime in North China. Tanaka was then a staff officer with the Kwantung Army and he stated that he had a hand in the drafting of DOHIHARA's instructions. he also said that DOHIHARA, ITAGAKI, and Sasaki considered that "Anti-Communism" should be added as a slogan to the objective of creating an autonomous regime in North China. We accept this evidence, for it fits in with what followed, and its statement as to the


real authors of the so-called autonomous movement in North China is confirmed by various documents form Japanese sources which will be noticed hereafter.

We have little evidence as to the events of the next two months. This is not surprising, for they were presumably months of intrigue, of dangerous intrigue. Negotiations on such matters are seldom recorded or made public.

DOHIHARA first tried to persuade Wu Pei-Fu to become the head of a North China Autonomous Government and failed. DOHIHARA thereafter tried to induce general Sung Che-Yan, then Garrison Commander of the Peiping-Tientsin Area, to lead such a government, and failed. DOHIHARA and Takahashi, who was Military Attaché of the Japanese embassy, then passed from persuasion to demands that a North China Autonomous Government should be formed, and DOHIHARA and Matsui, who was Chief of the Japanese Special Services Board, further demanded that special economic concessions should be granted to the Japanese in North China.

It is proved that when inducements failed to produce an autonomous government, DOHIHARA, in November 1935, betook himself to threats of force, and even to the issue of an ultimatum for the purpose of procuring the establishment of such a government; and that the Kwantung Army backed up his threats by concentrating a striking force of tanks, mobile troops, and airplanes at Shanhaikwan at the eastern end of the Great Wall, ready to advance into the Peiping-Tientsin area.

About the end of the year 1935, there emerged


two new forms of government in North China. One, which was set up directly as a result of DOHIHARA's effort, was called the "East Hopei Anti-Communist Autonomous government." It was established about the end of November 1935, with Yin Ju-Keng as its chairman. he had been administrative commissioner of the demilitarized zone south of the Great Wall in Eats Hopei. It proclaimed itself independent of the National Government of China. Its capital was Tungchow in the demilitarized zone, northeast of Peiping. the Japanese maintained garrison troops there. Its control extended over many districts of the demilitarized zone. The witness Goette traveled in this area many times after the establishment of this government, saw the Japanese garrison troops, and saw the Chinese gendarmerie of the new government, recruited, trained, and officered by Japanese. Being in the demilitarized zone, this new government was beyond the reach of the forces of the National Government of China. That government protested to the Japanese against the existence of this so-called autonomous government, but without effect.

Another new governmental organ which made its appearance in North China about this time was the Hopei-Chahar Political Council. It was created by the national Government of China as a result of pressure exerted by DOHIHARA, and ostensibly to conform to his wishes. According to the Japanese Year Book, it was a new political organ which had power to negotiate with Japan and Manchukuo for the maintenance of amicable relations.

DOHIHARA's hopes of these regimes can be gathered from his report made to MINAMI in Tanaka's presence in the end of 1935. DOHIHARA reported that


the Hope-Chahar regime and the East Hopei regime, though unsatisfactory, had been established and would more or less obey the Kwantung Army, and that the North China regime would be established with the Hopei-Chahar regime as its core.

Similar hopes were entertained by the Japanese Army at home at this time. On 13 January 1936, it transmitted to the Japanese forces in China a plan for dealing with North China. the object of the plan was stated to be the realization of self-government in the five northern provinces of China. This, it will be recalled, was the object for which MINAMI had dispatched DOHIHARA to Peiping in September 1935. The plan suggested that Japanese advice and guidance should be given to the Hopei-Chahar Political Council; that Eats Hopei independence should be upheld so long as the Hopei-Chahar Political Council remained unsatisfactory, but, when it was established so as to justify confidence, a merger should be introduced; that measures should be avoided which might lead to Japan being misunderstood as if she were setting up a separate state like Manchukuo; that accordingly, Japanese advisers should be limited in number; that measures towards Inner Mongolia should be continued as before, but measures which had become obstacles to the self-government power of the Hopei-Chahar Political Council should be held back for the time being; that management of North China should be the duty of the Commander of the Japanese troops in China; and that as a rule, he should execute this informally by direct contact with the Hopei-Chahar and East Hopei Governments.


The Japanese Army's Plans for an Advance Into North China

About the time when DOHIHARA was expressing to MINAMI, commanding the Kwantung Army, his expectation that the Hopei Chahar Political Council would more or less obey the Kwantung Army, and that an independent North China regime would be established with the Hopei-Chahar regime as its core, the Kwantung Army sent to Tokyo a Propaganda Plan which is most significant as to Japanese intentions towards North China. It was dispatched by the Chief of Staff of the Kwantung Army to the Vice Minister of War on 9 December 1935. Certain passages in it merit quotation in full. As to the time of execution, it is stated:
Prior to the advance of our military forces in to China proper, this propaganda shall be launched, chiefly to support form the side of propaganda of the Japanese Government and the Japanese forces stationed in China. After the advance of our forces into China proper it shall be performed so as to facilitate our military activities.

The general principle is stated to be:

We start our propaganda to convince the whole world of our lawfulness as soon as the advancement of the Kwantung Army into China proper takes place. We shall launch out on a movement to estrange the inhabitants of North China from the Central Government by fomenting anti-Koumintang and anti-communism agitation among them. As for the Chinese people and army of the rest of China, we shall take a measure to form an anti-war atmosphere.

We quote also the types of propaganda which are to be used.

  1. The Central Government has regarded


    North China as a colony in a sense, and has long made it the object of exploitation. The inhabitants in North China therefore have been cherishing a strong desire to establish a separate government of their own in order to shake themselves from the fetters of the Central Government. Burning with strong aspiration for independence, the people concerned have expressed their firm resolution to establish an independent country.

  1. The enactment of the nationalization of silver has made the Central Government the object of resentment, and as a result of it, the movement to establish a new independent government in North China is making rapid progress.

  2. It is the greatest desire of the Japanese Government to form an anti-Communist front with the North China independent government, for it may be considered the first ray of hope for the establishment of lasting peace in the Orient by the harmonious cooperation among Japan, China and Manchuria. We therefore shall assume a definite attitude to support wholeheartedly the establishment and development of the independent government in North China.

  3. The Chinese Central Government has violated the agreement of cessation of hostilities in North China and other military agreements; they have been disturbing the peace of Manchuria; instigating a boycott of Japanese goods and an anti-Japanese sentiment; and has become a great menace to the Japanese interests and residents in North China and the existence of the Manchurian Empire; therefore, we have to make it clear that we shall be obliged to resort to arms if


    the Chinese Government continues such underhanded tactics.

  1. It must [be] made clear that when we do dispatch our forces to China in the future, we do it for the purpose of punishing the Chinese military, and not the Chinese people at large.

  2. We shall try to enhance an anti-war sentiment among the people by propagandizing extensively that the employment of military forces by the Chinese Central Government or other military lords will reduce the people to the greatest misery and will lead to the destruction of the country.

  3. As for the Chinese forces, we will take a measure to promote antagonism between them and to increase their admiration for the strength of the Japanese military power, thus depriving their fighting spirit.

  4. Our propaganda for Manchuria will be that the appearance of the independent government in North China is nothing but a concrete manifestation of their longing for the fine administration of the Manchurian Government, and it will brighten the future of Manchuria.

We have quoted form this document so fully in order that is proposals, advanced on 9 December 1935, may be contrasted with the contention proposed by the defense in general, and by MINAMI, UMEZU, ITAGAKI, and DOHIHARA in particular, that the so-called North China independence movement was a spontaneous movement on the part of the people of North China, neither initiated nor furthered by Japan.

Relevant also to the question of the attitude and intention of the Japanese towards the so-called autonomous movement in North China is a "Draft of Outline


for the Military Disposal of Various Railways in North China": sent by General Tada, then Commander of the Japanese garrison forces in North China, to the Ministry of War in Tokyo on 2 December 1935.

This document contains detailed plans for the working of certain railways in North China on behalf of Japanese troops engaged in military [a] operation in North China. The document does not specifically mention the nature of this proposed military operation. The operation is described in such vague terms as the "military objective", "military operations", and "when the army find it inevitable to settle the issue by armed force." A critical examination of the whole document, however, reveals that the Japanese Army proposed to move from about the line of the Great Wall, driving before it the military forces of the National Government of China, and clearing Shantung, Hopei and Shansi, the three southern provinces of the five northern provinces of China. It is clear also that the operation was to be embarked on to support the proposed North China Autonomous Regime. Thus, the Chinese employees of the railways were to be made to "understand the spirit of the North China Autonomous Movement", and General Tada expresses a private and strictly confidential opinion as to the disposal of the railways when normal political conditions is restored. He says:

When the situation in North China is restored to its normal condition after the military operations are over, the railways will be turned over to the North China Regime . . . Under the management of the Communication Ministry of the North China Regime, Japanese advisers


and/or some railway employees will be employed. Addenda. The following demands will be made of the North China Regime on the occasion of the abolition of the headquarters of the 'Japanese' Railway Corps.
  1. Employment of advisers and high-ranking officials by each railway.

  2. The right of guarding the railways and of posting troops at the principal places along the railway lines.

  3. Cession of the Shantung Railway and the section of the Lunghai Railway east of Suchow.

  4. The right of construction new railways.

Moreover, the document shows that certain steps had already been taken in North China to pave the way for the operation. Thus:

  1. We shall endeavor to check the southward transfer of rolling stocks in counter opposition to the Nanking Government's policy of carrying away rolling stocks and other materials to the south. For this purpose we shall do our best in applying all possible indirect means, but in the case of Peiping-Shanhaikwan Railway we shall check it even by might if necessary. In case such forcible measure is taken, we shall give as the nominal reason self-defense and protection of the Peiping-Shanhaikwan Railway against the anti-Japanese military operations of the Nanking Government. (This is being enforced by the dispatch of military police under an agreement made with the Peiping-Shanhaikwan Railway Co.)

Thus, during the latter half of the year 1935, the Kwantung Army and the North China Garrison Army,


with the support of, and at times as directed by, the Japanese Ministry of War, were engaged in an attempt to detach the five northern provinces of China from allegiance to the National Government of China, and to set up an autonomous regime or regimes there, which would be subservient to Japan. The plan contained the two essential elements which had been present in the Japanese conquest of Manchuria and Jehol, namely: (1) military domination by Japan, and 92) a declaration of independence by such few Chinese figures as could be induced to serve Japan's purpose. in the Manchurian case, however, military conquest had preceded the artificially engendered declaration of independence. In the case of North China, the Japanese military had hoped to avoid the appearance of military conquest, and had tried hard to induce the establishment of an artificially engendered North China Autonomous Government, at first by persuasion, and later by threat of the use of force. By the end of the year 1935, the Japanese military had evolved the plans for invasion which we have just considered. The efforts of the Japanese military were known to the Japanese Foreign Ministry and were resented by it, but only because they were regarded as an attempt by the Army to encroach on the Foreign Ministry's domain -- the conduct of the foreign relations of Japan.

Hirota's Three Principles

While Japan's armies in China were formulating plans in anticipation of military operations in North China, the Japanese Cabinet was working on a program of subjugating China through diplomatic measures.


On 5 August 1935, Foreign Minister HIROTA sent to the diplomatic and consular officials in China a plan prepared on his instructions by the Bureau of east Asiatic Affairs of the Foreign Office, as a result of the re-investigation of Japan's policy towards China which had been made by that Bureau in collaboration with the Army and Navy authorities. Three general principles were stated in the plan, as follows:
  1. China should carry out strict control over all anti-Japanese speeches and activities, and both Japan and China should make efforts to promote friendship and cooperation on the basis of the principles of mutual respect of independence, cooperation and mutual assistance, and should work for the development of relations between Manchukuo and China;

  2. While the ultimate aim of the development of relations was that China would give formal recognition to Manchukuo and that Japan, Manchukuo and China would conclude an agreement to regulate the new relations among the three countries, China for the time being should not deny the fact of Manchukuo's existence, at least in North China and in the Chahar district which bordered the Manchukuo territory, and should enter into actual relations of interdependence and cooperation with Manchukuo in the economic and cultural fields:

  3. Japan and China should cooperate in Chahar and other districts bordering Out Mongolia, with a view to removing the communist menace.

In a subsequent telegram dated 28 September 1935, addressed to Japanese diplomatic and consular officials in China and Manchukuo, HIROTA reiterated the three principles as the basis of Japan's foreign policy to stabilize East Asia and to work for common prosperity


by means of cooperation and mutual assistance between Japan, Manchukuo and China, putting Japan as its center. In substance, the three principles were recited as follows:
  1. China should carry out strict control of all anti-Japanese speeches and activities, and should cooperate with Japan on concrete questions, putting an end to her policy of depending upon European and American countries;

  2. China must ultimately give a formal recognition to Manchukuo, but for the time being, China should give tacit consent to the independence of Manchukuo and enter into relations of interdependence and cooperation with Manchukuo in the economic and cultural fields, at least in North China, which is an area bordering Manchukuo territory;

  3. China should cooperate with Japan in removing the communist menace in areas bordering Outer Mongolia.

The telegram appended the additional instruction that in the event the above-mentioned principles were carried into execution steadily and China's sincerity sufficiently manifested, a general agreement would be concluded for the regulation of the new relations among Japan, Manchukuo and China. One material alteration in this statement of the three principles as compared with the statement of 5 August 1935 is that the later version omits the statement that Japan and China should cooperate on the basis of the principle of mutual respect of independence.

After considerable discussion with the Army and the Navy, the plan as set out in the second version of 28 September 1935 was adopted on 4 October 1935 by the Premier, the Foreign, War, Navy and Finance Ministers. Japanese diplomatic officials abroad were again


notified and instructed to keep the matter strictly secret. On 21 January 1936, the three principles were made known to the public through HIROTA's address to the Diet. On the part of China, however, no enthusiasm was shown for their acceptance, inasmuch as these principles would involve China's recognition of the de facto status of Manchukuo. Thus, the diplomats of Japan would have secured for Japan the fruits of her conquest of Manchuria.

While HIROTA, on 21 January 1936, was announcing his three principles of Japanese policy towards China, the Japanese Foreign Office was fully aware of the Army's plan to set up an autonomous government in the five northern provinces of China, for on that same day, 21 January 1936, it had transmitted a copy of that plan to the Japanese Ambassador in China.

The February Incident

The February Incident was an outburst of the Army's resentment against the government under the premiership of Okada, which was known as a Navy cabinet and reputed to be opposed to the Army's policy of expansion on the continent of Asia by military force. The Incident occurred on 26 February 1936. Earlier, when Okada was Navy Minister in the Saito Cabinet, great difficulties were experienced by the Cabinet because the Cabinet was pursuing a policy of reducing the Army budget against vigorous opposition of the Army. When Okada became Premier in 1934, the power of the Army was increasing. There were already indications, while the Cabinet was being formed, that the army would bring about disturbances and trouble with the new government.


On 26 February 1936, some 22 officers and 1,400 men revolted against the Government, terrorized Tokyo for three and a half days, seized the Premier's official residence, the Diet Building, the Home and War Offices, the Metropolitan Policy Building and the General Staff Building, assassinated Finance Minister Takahashi, Lord Keeper of the Privy Seal Saito and General Watanabe, and attempted to assassinate Grand Chamberlain Suzuki and Okada himself. As a result of the incident, the Okada Cabinet resigned on 8 March 1936, and HIROTA succeeded as Premier.

The purpose of this Incident was to replace the Okada Cabinet by another with stronger policies which would fit into the policy of the Army for further expansion on the continent. Okada testified that he supposed the Incident was a spontaneous outbursts of resentment on the part of a group of young officers against the Government's lack of sympathy with the ambitions of the military.

Formation of the Hirota Cabinet

On 9 March 1936, as a result of the February Incident, HIROTA succeeded Okada as Premier of Japan. Instead of taking measures to enforce military discipline and eradicate the interference of the Army in political affairs, some dire effects of which had just been exhibited, already in the formation of his Cabinet he yielded to Army demands as to the choice of some of his ministers. Moreover, in May 1936, shortly after he assumed the premiership, the organization of the Army and navy was changed to require that Army and Navy ministers should be of rank not lower than lieutenant general and vice admiral, and vice ministers of rank


not lower than major general and rear admiral, and that they should all be on the active list. Since 1913, the organization had in form permitted the appointment of reserve officers as Ministers of War and of the Navy. While the change did, in fact, make the law conform to the existing practice of appointing War and Navy ministers from senior officers on the active list, it was done in compliance with the demand of the army, who were thereby assured that whoever became War Minister, whether on the active list or recalled form the reserve list, would be subject to Army discipline and command, and thus to control by the Army.

Foreign Policies Under the Hirota Cabinet

On 30 June 1936, the War and Navy Ministries agreed on a "Basis of National Policy." The fundamental policy was to consist in advancing toward and developing the South Seas, as well as obtaining a firm position in the East Asiatic Continent for stabilizing Japan's national defense. The principles stated were:
  1. Japan must strive to correct the aggressive policies of the great powers and to realize the spirit of the "Imperial Way" by a consistent policy of overseas expansion;

  2. Japan must complete her national defense and armament to secure the position of the Empire as the stabilizing power in East Asia;

  3. Japan expects the sound development of Manchukuo and thus hopes to stabilize Japan-Manchukuo national defense; in order to promote economic development, Japan intends to get rid of the menace of the U.S.S.R.; to prepare against Britain and the United States and to bring about close collaboration between Japan, Manchukuo and China; in the execution of this continental policy


    Japan must pay due attention to friendly relations with other powers;

  1. Japan plans to promote her racial and economical development in the South Seas, and without rousing other powers, will attempt to extend her strength by moderate and peaceful measures.

Thus, with the establishment of Manchukuo, Japan may expect full development of her natural resources and develop her national defense.

These plans were adopted on 11 August 1936, as the "Basic Principles of National Policy: by the Five Ministers' Conference, consisting of the Premier, HIROTA, and the War, Navy, Foreign and Finance Ministers. While HIROTA contends that they were to be achieved by peaceful means and were defensive in nature, the contents of these principles speak for themselves. Japan proposed to assume the role of the leader of East Asia, thus bringing the entire sphere under her domination through expansion on the continent and to the South Seas, to the exclusion of the influence of western power. As has been previously observed, the use of the words "national defense" in this document should be noted. They occur in many statements of Japan's policy. They are never confined to defense by Japan against the aggressive acts of other nations. They always mean military support by Japan of her own policies, aggressive or not.

Itagaki's Mongolian Policy

While the HIROTA Cabinet was formulating its expansionist foreign policy under the name of national defense, the Kwantung Army had its attention directed toward Mongolia in the north. Earlier, on 28 March 1936, five days after ITAGAKI was promoted to Chief of


Staff of the Kwantung Army, he had an interview with Ambassador Arita, expounding his views on the strategic importance of Outer Mongolia and Inner Mongolia. ITAGAKI said: "Outer Mongolia is of importance from the point of view of Japanese-Manchukuoan influence today, because it is the flank defense of the Siberian Railroad which is a connecting line between Soviet territory in the Far East and Europe. If Outer Mongolia be combined with Japan and Manchukuo, Soviet territory in the Far East will fall into a very dangerous condition and it is possible that the influence of the Soviet Union in the Far East might be removed without fighting. Therefore, the Army aims to extend Japanese-Manchurian power into Outer Mongolia by all means at hand."

In connection with Inner Mongolia, he said: "Western Inner Mongolia and the zone to the west of these are of great value for executing the continental policy of Japan. Should the said zone be placed in the sphere of Japanese and Manchurian influence, it means that will be a base for pacification of their brothers of the same race in Outer Mongolia. Moreover, that the influence of Soviet Russia which comes from Province of Sinkiang, as well as a land link between Soviet Russia and China will be blocked. . . . From the above standpoint, the Imperial Army has been furthering its work with regard to Western Inner Mongolia for several years. The Imperial Army is resolved to further its work, overcoming all sorts of obstacles."

This statement made by ITAGAKI shows what the Kwantung Army had done and would continue to do in


those areas in line with Japan's "continental policy". It is to be recalled that a part of Inner Mongolia had already been brought under Japanese sway by the establishment of the Inner Mongolia autonomous regime under Prince Teh through the efforts of DOHIHARA and others of the Kwantung Army in 1935. All that was left to be done was to extend the Japanese influence further west and to Outer Mongolia. This explains why the seat of the Inner Mongolia autonomous regime under Prince Teh was moved from Pailingmiao to West Suntio in February 1936, and again to Teh-Hua in June of the same year.

State-Founding Conference in Mongolia

As a result of the adoption of a positive Mongolian policy by Japan, the autonomous movement in Inner Mongolia made steady progress. In April 1936, Prince Teh and Li Shou-Hsin met with the Japanese Special Service Chief Tanaka, Hisshi, at West Wuchumuhsin. Representatives of Mengchenhui, Heilinkuolemeng, Tsakharmen, Ulanchapmeng, Tumotechi, Alashan, Kashimouchi, Ikechiameng, Tsinghai and Outer Mongolia also attended this meeting, which was called the State-Founding Conference, lasting from 21 to 26 April 1936. The principal matters decided at the conference were: (10 A plan to found the Mongolian State by amalgamating Mongolia and Tsinghai; (2) A plan to set up a monarchy, with a committee system to serve the purpose for the time being; (3) A plan to found a Mongolian Congress; (4) A plan to organize a military government; and (5) A plan to conclude a mutual assistance agreement with Manchukuo.


By June 1936, the seat of the regime was moved to Teh-Hue and an independent Mongolian government was set up there. In July 1936, an agreement between this government and Manchukuo was concluded, providing for mutual political and economic aid. After the conclusion of this treaty, Prince Teh set out to equip his army. The object was to increase cavalry divisions, which had hitherto numbered three, to nine. Both MINAMI and ITAGAKI gave their earnest support for the creation of the Mongolian State. The army's policy was carried out in utmost secrecy. Preparations were made by the Japanese Army to recognize the independence of Inner Mongolia.

Japan's Policies Toward North China -- 1936-1937

ON 11 August 1936, "The Second Administrative Policy Toward North China" was decided by the appropriate ministries in the HIROTA Cabinet. The main purpose of the policy was stated to be to assist the people in North China to procure perfect independence in administration, to set up an anti-Communist, pro-Japanese and pro-Manchukuoan area, to secure necessary materials for Japan's national defense and to improve the facilities of transportation against the possible invasion of Soviet Russia, thus making North China a base for cooperation between Japan, Manchukuo and China. The five provinces in North China should finally be put under self-government. Advice should be given to the East Hopeh regime to reform their internal administration so as to serve as an example throughout Hopei and Chahar. the object of economic development in North China was stated to be to create an inseparable


connection between China and Japan based on the mutual economic interest promoted by free investment and also to make it contribute toward the preservation of friendly relations between Japan and North China, both in time of war or peace. Iron, coal and salt in the North China provinces should be utilized for Japan's national defense and for the promotion of transportation facilities and electric power. The same plan provided in detail for the unification and improvement of transportation facilities and the methods of developing natural resources in North China. There is internal evidence in this plan that the hopes entertained by Japan at the end of 1935 that the Hopei-Chahar Political Council would prove subservient to Japan had been disappointed. This plan says a fair and square attitude is required for the guidance of the leaders of Hopei and Chahar. It says the system should be improved, the personnel purged and changed, and efforts made to abolish the financial, economic and military administration of the Chinese military clique.

The content of the self-government which Japan now proposed for North China was that the new regime should have control of finances, industry and transportation and should be free of the anti-Japanese interference of the National Government of China. The plan at the same time provided that acts must be avoided which would make it appear as if Japan was infringing China's territorial rights or establishing an independent country, or making North China an extension of Manchukuo. A similar provision, it will be remembered, appeared in the first plan, or Army plan, for North


China forwarded by the Foreign Office to the Japanese Ambassador to China on 13 January 1936. The framers of Japan's policies still believed that black could be made to look white in the eyes of the world. The exposé by the League of Nations of Japan's duplicity in regard to Manchuria had taught them nothing.

Subsequently, on 20 February 1937l, "The third Administrative Policy Toward North China" was decided upon by the appropriate ministries of the Hayashi Cabinet. There was no substantial change in contents. Again, on 16 April 1937, "The Plan for Guiding North China" was decided upon by the Foreign, Finance, War and Navy Ministers of the same Cabinet. The essence of the plan was to make the Chinese Government recognize the special position of North China and to carry out economic measures. Both the Third Administrative Policy toward North China and the Plan for Guiding North China decided upon by the Hayashi Cabinet will be treated in more detail later.

The Fengtai Incident

In May 1936, as a result of negotiations conducted between the Japanese forces and the Chinese authorities in North China, one Japanese battalion was permitted to be stationed at Fengtai, a town west of Peiping. On 18 September 1936, an incident occurred when a company of Japanese soldiers carried out maneuvers in Fengtai. As they passed through the garrison line of the Chinese troops there, the Chinese patrols attempted to halt them and a clash ensued. Although it was immediately settled, the Japanese used this incident as a pretext for reinforcement, and occupied Fengtai. With the occupation of. the Japanese were in a


position to control the communications of the Peiping-Hankow railway line and to cut off North China from Central China. This was the stage-setting for the Lukouchiao Incident, sometimes referred to as the Marco Polo Bridge Incident which occurred on 7 July 1937. The bridge is on the railway from to Peiping, and if the Japanese could gain control of the bridge, their control of Peiping from the west would be facilitated. The Japanese forces stationed at then repeatedly demanded the withdrawal of the Chinese garrison from Lukouchiao and also from Chang-Sin-Tien, another strategic point on the railway leading to Peiping. In the winter of 1936, the Japanese intended to reenforce their garrison force in this vital strategic area and planned the building of barracks and an airfield there. For this purpose, they wished to purchase large tracts of land in the area between and Lukouchiao. These demands, however, were refused by the Chinese.

The Chang-Kawagoe Talks

In the autumn of 1936, a series of talks was held between the Chinese Foreign Minister Chang Chun and the Japanese Ambassador Kawagoe, with a view to adjusting Sino-Japanese diplomatic relations. Kawagoe also had an interview with Generalissimo Chiang Kai-shek at the end of November 1936, and there was a mutual expression of the desire to see the diplomatic relations between the two countries adjusted. During the talks with the Chinese Foreign Minister, the Japanese side submitted a proposal embodying the following important points: (1) Sino-Japanese economic cooperation; (2) Sino-Japanese Anti-Comintern Agreement; and (3) North China to be designated a special area in view of its relationships with Japan. Chang Chun responded that he was, of course, in favor of Sino-Japanese economic cooperation, but wished this to be based on the principle of


reciprocity and equality. He was also very much in favor of Sino-Japanese Anti-Comintern agreement, but here too he wanted to see that the agreement would not infringe upon China's sovereignty. As to making North China a special area on account of its relation with Japan, he could only recognize a special economic relation, but would not be able to recognize any special administrative changes. These talks achieved no results since the attitude of the Chinese Government was incompatible with Japan's policies, particularly with regard to North China.

The Fall of the Hirota Cabinet

ON 20 January 1937, one of Japan's two political parties, the Seiyukai Party, issued a declaration attacking the HIROTA Cabinet on the ground, inter alia, that its members were too much influenced by the dogmatic prejudices of the bureaucrats and of the military, and that the wish of the military to interfere in every sphere was a threat to constitutional government in Japan. On 22 January 1937, War Minister Terauchi tendered his resignation because, as he stated, the views on the prevailing situation held by the political party which had some members sitting as cabinet members differed fundamentally from the Army's. Under the then existing situation, there was no hope of getting a new War Minister who could in any manner reconcile the extremist policy of the Army with the party politics, and the HIROTA Cabinet had to resign.

Ugaki Failed to Form a Cabinet

Upon the resignation of the HIROTA Cabinet, Ugaki, on 24 January 1937l, was given the Imperial Mandate to form a new Cabinet. Ugaki was not


regarded with favor by the Army, which took appropriate and effective steps to prevent his accession to office. This was an important and significant happening, discussed in more detail in another part of this Judgment. Accordingly we do no more than mention the matter at this point as part of the narrative of events.

The Hayashi Cabinet and Its North China Policy

The Hayashi Cabinet was formed on 2 February 1937. UMEZU remained as Vice-Minister of War, and KAYA was made Vice-Minister of Finance. The general policy of the Government was not changed. Continuing the estrangement policy of the HIROTA Cabinet with regard to North China, "The Third Administrative Policy Toward North China" was decided on by the Ministries concerned on 20 February 1937. The principal object of administering North China was stated to be to complete Japan's aim of making Manchukuo strongly pro-Japanese and anti-communistic, to procure defense materials, to protect transportation, to prepare defense against the U.S.S.R. and to establish unity among Japan, Manchukuo and China. To attain the above-mentioned object, Japan should carry out her economic policy in North China, secretly aid the government of North China and make the Chinese National Government recognize the special position of North China and the unity of Japan, Manchukuo and China.

Again, on 16 April 1937, the "Plan for Guiding North China" was decided on by the Foreign, Finance, War and Navy Ministers. the essence of the guidance of north China was stated to be "to make the said area virtually a firm anti-communistic pro-Manchukuo


Japanese region, and also to contribute to the acquisition of communicational facilities, thus partly preparing against the Red threat and partly forming a foundation for realizing the unity of mutual aid of Japan, Manchukuo and China." Regarding economic exploitation, the plan provided that the development of those military resources vital to national defense, such as iron, coal salt and so forth, and the establishment of communications, should be speedily realized, by special capital if necessary. Again the provision appears that actions which will cause other powers to misunderstand Japan's intentions must be avoided. The formulation of these policies in the Cabinet, participated in by the various Ministries concerned, revealed that not only the Army but also the other departments of the Government stood ready for some positive progress in regard to North China to be carried out in the near future.

The First Konoye Cabinet and
Further Planning Against North China

After the fall of the Hayashi Cabinet, Prince Konoye assumed the Premiership on 4 June 1937, with HIROTA as Foreign Minister and KAYA as Finance Minister.

In Army circles, there was agitation for further military action in China. TOJO, Hideki, then Chief of Staff of the Kwantung Army, sent a telegram on 9 June 1937 to the Army General Staff with the suggestion that judging from the present situation in China, form the point of view of military preparations against Soviet Russia, Japan should "deliver a blow" first of all upon the Chinese National Government to get rid of the menace at the back if Japan's military power


permitted it. In less than one month, the suggested blow against the National Government of China was delivered.

The events we have just reviewed show that the seizure of Manchuria and Jehol was only the first step in Japan's plan gradually to control the whole of China so that the country, with its great market for Japan's manufactured goods and its enormous natural resources, would help to make Japan the overlord of East Asia. No sooner had Manchuria and Jehol been seized, and while yet their conversion to satellite feeders of Japan's economy was hardly begun, than in the spring of 1934, Japan was claiming a special position in regard to the five northern provinces of China. By June 1935, Japan had forced the conclusion of the so-called "Ho-UMEZU" and Ching-DOHIHARA Agreements, whereby the hold of the National Government of China over two of these provinces, Hopei and Chahar, was substantially loosened. By the end of the year 1935, the support of Japan had established two so-called independent governments, which where her creatures, the Inner Mongolian government of Prince Teh and the East Hopei Anti-Communist Autonomous Government, whose capital was at Tungchow. By that time also, there had been set up the Hopei-Chahar Political Council which Japan expected to be able to turn into a government of the five northern provinces, which would be independent of the National Government of China and subservient to Japan's will. Japan intended to follow the anticipated declaration of independence of the five northern provinces by a military occupation of them, and the military plans for this


occupation and for the propaganda which was to accompany the movement were prepared for execution by the end of the year 1935. Neither persuasion nor the threat of force induced the Hopei-Chahar Political Council to proclaim the independence of the five northern provinces and, in our opinion, the occupation of these provinces by the Japanese Army would have occurred much earlier than it did if events in Japan had not compelled the Japanese Army to increase and consolidate its influence over the Government of Japan so that it might control that government in support of its military adventure. As a result of the military revolt of February 1936, the Army got rid of the Okada Cabinet which was not supporting the Army's ambitious policies, but that revolt revealed a grave lack of discipline and responsibility among the younger elements in the Army which called for a pause while discipline was re-established. HIROTA, the next Premier, and the War, Navy, Foreign and Finance Ministers in his Cabinet, were wholly in favor of the expansionist policy which the Army advocated, and the latter half of the year 1936 saw the adoption by some or all of them of the "Basis of National Policy of June 1936" and of the "Basic Principles of National Policy" and the "Second Administrative Policy Toward North China" of August 1936. Meantime, the Army had secured a footing at which should enable it to seize the Marco Polo Bridge, cut off the five northern provinces from the rest of China to the southward, and control Peiping. But the HIROTA Cabinet was not wholly in favor of the policies of the Army. There were elements in it which resented the increasing control of the military over


the Government. These had to be got rid of, and in January 1937, the military brought about the fall of the HIROTA Cabinet and the failure of Ugaki to form a government. Finally, in the beginning of June 1937, Prince Konoye formed his first Cabinet, and government support for the adventures of the military was at last assured. The way was clear for the next step in Japan's plan to subjugate China.


Section IV.
From the Marco Polo Bridge Incident (7 July 1937) to
the Konoye Declaration of 16 January 1938

Under the Boxer Protocol of 7 September 1901 (Annex No. B-2), China granted to the powers having legations at Peiping the right to station guards in the Legation Quarters and at twelve specified points along the railway between Peiping and Tientsin for the maintenance of open communication between the capital and the sea. By a supplementary agreement of 15 July 1902, foreign troops stationed at these points were given the right to carry on field exercises and rifle practice without informing the Chinese authorities, except in the case of feux de guerre.

At the beginning of July 1937, Japan maintained a force, variously estimated from 7,000 to 15,000, in North China, while the other Protocol powers had only small detachments. The British had a total of 1,007, including 252 members of the Legation Guards; the strength of the French effectives stationed in Hopei Province varied between 1,700 and 1,900, the bulk of whom were at Tientsin. The number of Japanese troops greatly exceeded that need to carry out the duties under the Protocol. From June 1937, the Japanese troops carried out intense night maneuvers in the vicinity of Lukouchiao (Marco Polo Bridge). These maneuvers were held every night, while night maneuvers held by other foreign garrison troops were very much less frequent than those conducted by the Japanese. The Chinese had requested that notice be given beforehand of the night maneuvers, in order that the inhabitants of the territory should not be disturbed. To this the Japanese had agreed. On the night of 7 July 1937, the maneuvers


were carried on without notice. It was therefore under an atmosphere of tension and unrest, that on that night the Lukouchiao Incident broke out.

At about ten o'clock in the evening, the Chinese authorities received a telephone message from Matsui, Kotaro, Chief of the Japanese Special Service in Peiping, alleging that one of the Japanese soldiers was reported missing after the Chinese garrison forces in Manping had opened fire at the Japanese maneuvering troops, and demanding that the Japanese troops be allowed entry into the city of Wanping to conduct searches. Wanping is in the neighborhood of Lukouchiao, which being on the main communication line west of Peiping was of considerable strategic importance. Prior to July 1937, the Japanese forces at had repeatedly demanded the withdrawal of the Chinese forces stationed at this place.

We have already noticed that in 1936, the Japanese had endeavored to take up a large tract of land between , to the west of Peiping, and Lukouchiao, for the purpose of erecting barracks and an airfield, and how that endeavor failed. the strategic effect on North China of the removal of Chinese troops from Lukouchiao and the establishment of military posts by the Japanese between and Lukouchiao is obvious. Peiping would be completely cut off from the South and West.

General Chin Teh-Chun, at the time acting as Commander of the 29th Army in the absence of General Sung Che-Yuan, who was then on leave at his home, instructed the Chinese liaison authorities to reply to the Japanese demand for entry into Wanping that the maneuvers held under


the circumstances of that night were illegal and therefore the Chinese authorities had no responsibility whatsoever for the allegedly missing soldier. However, he said that he would order the Chinese troops stationed at Wanping to conduct a search on their own behalf. The Japanese, not satisfied with the reply, insisted on conducting the search themselves.

Wang Len-Chai, Administrative Commissioner in the city of Wanping, was ordered by General Chin to investigate and report on the maneuvering of the Japanese troops and whether any Japanese soldier was missing. In the meantime, a report came to the Chinese authorities that a battalion of Japanese troops with six pieces of artillery was advancing from to Lukouchiao. Chinese troops were thereupon ordered to be alert, while Wang len-Chai was sent to negotiate with Matsui. While the investigation conducted by Wang Len-Chai did not located the allegedly missing soldier, and subsequent discussion with Matsui brought about no result, it was decided that a joint investigation should be conducted on the spot. After Wang Len-Chai and the Japanese representative Terahira entered the city, the Japanese troops encircled it on three sides and opened fire. Chinese forces defended the city from the walls. At five o'clock in the morning of 8 July 1937, while the investigation was still going on, a Japanese battalion under its Commander Ichiki attacked the Chinese troops at Lungwangmiaso in the neighborhood of Lukouchiao. At about six o'clock, the Japanese began to attack the walled city of Wanping with machine gun fire.

Subsequent Operations and Negotiations for Truce

In the morning of 8 July 1937, the railway bridge


leading to Chang-Sin-Tien was captured by the Japanese. In the afternoon of the same day, the Japanese sent an ultimatum to the Commander of the city of Wanping to surrender before seven o'clock in the evening, failing which, bombardment would begin. The Chinese, however, stood firm, and promptly at seven, the Japanese bombardment began. On the next day, 9 July 1937, the Japanese, through Matsui and others, informed General Chin that the missing soldier had been found, and asked for a truce with the following conditions: (1) All military actions should cease on both sides: (2) Troops of both sides should return to their original positions; (3) The 37th Division, which entertained more hostile feeling towards Japan, should be replaced by another unit of the 29th Army for the defense of Wanping. An understanding was also to be reached on both sides to refrain from developing henceforth incidents of similar nature. The truce was agreed to on the same day.

Chinese units under the command of Lieutenant Colonel Chi Hsin-Wen retreated to their original positions, while the Japanese units were to withdraw toward. At this point, the incident might well be considered as having been settled, if the Japanese and conformed to the terms of the truce. But, it was later ascertained that some one hundred Japanese soldiers along the railway tunnel were not withdrawn as agreed. During midnight on 9 July 1937, the Japanese troops there again fired into the city. Thereafter, Japanese troops continued to pour into the troubled area. By 12 July, there were 20,000 Japanese troops and 100 airplanes in the area. There then occurred sporadic clashes between the two forces until the 27th of July,


when, as hereafter related, hostilities on a large scale broke out.

Attitude of the Japanese Government

The official telegram reporting the outbreak of hostilities reached Tokyo on 8 July 1937. On the following day, the Konoye Cabinet, in an extraordinary meeting, decided that the government attitude should be to hold fast to the policy of arresting the scope of the disturbance and to seek a prompt local settlement of the matter, Notwithstanding this decision of the Cabinet, the General Staff decided on 10 July 1937 to re-enforce the garrison by sending two brigades from the Kwantung Army, one division from Korea and three divisions from Japan. The Cabinet, of which HIROTA and KAYA were members, approved the Army plan on 11 July. Units of the Kwantung Army were sent to the Peiping and Tientsin area. However, on the night of 11 July 1937, upon receipt of the report from the North China Forces that the Chinese had come to terms, the Supreme Command decided to stop mobilization of the divisions in Japan proper. On 13 July 1937, the Supreme Command adopted the "Policy for the Treatment of the North China Incident", which provided that while the Japanese Army would follow the localization policy and would decide mobilization of the homeland forces in the light of future developments, they would nevertheless take resolute steps, if the Chinese neglected the terms they agreed upon, or showed their insincerity by moving their troops to North China.

From 17 July 1937, while negotiations were being carried on between the North China Garrison Forces and the 29th Army on the spot, and between the Japanese


diplomatic officials and the Chinese Government at Nanking, the Japanese Supreme Command proceeded to prepare for mobilization in Japan which had been interrupted on 11 July 1937. Even after Sung Che-Yuan, Commander of the 29th Army and head of the Hopei-Chahar Political Council, was reported to have come to terms on 18 July 1937, the Japanese Supreme Command still pushed forward preparations for mobilization on the ground that the Chinese Government had shown no sincerity. On 29 July 1937, the Cabinet authorized mobilization of three divisions. One week later, the Commander of the North China Garrison Forces reported that, having exhausted every means of peaceful settlement, he had decided to use force to chastise the 29th Army and requested approval, which was given by the Supreme Command. In the meantime, mobilization orders were issued for four divisions. Also, ostensibly for the protection of Japanese residents in Shanghai and Tsingtao, one division was to be reserved for each city.

It is important to note that under the "Draft of the Outline for the Military Disposal of Various Railways in North China" of 2 December 1935, which provided for a sweep by the Japanese forces of the provinces of Shantung, Hopeh and Shansi, Tsingtao was the port at which reinforcements from Japan were to be landed to take part in the sweep.

On the diplomatic front, the Japanese Foreign Office took prompt measures to strengthen the diplomatic staff in North China, following the Cabinet meeting on 11 July 1937, in which the important decision was made to take necessary steps in connection with the dispatching of troops to North China. On 11 July 1937, Hidaka, Counsellor


to the Japanese Embassy at Nanking, was instructed by the Foreign Office to notify the Chinese Government of the intention of the Japanese Government to settle the matter locally and to request the Chinese Government not to obstruct the Japanese efforts (to save the situation promptly). When the Chinese foreign Minister demanded the withdrawal of Japanese troops from the places of disturbance and the cessation of sending re-enforcements from Manchuria, Korea, and Japan proper, Hidaka evaded the issue by asking the Chinese Foreign Minister whether the Chinese Government had any intention of denying any agreement reached between the Japanese and Chinese authorities on the spot. After the Chinese Foreign Minister had pointed out in an official note that any local understanding or agreement would take effect only on confirmation by the Chinese Government, Hidaka was again instructed by the Japanese Foreign Office on 17 July 1937 to demand that the Chinese Government should not obstruct the execution of the terms of the settlement reached on the spot. It had thus become clear that what the Japanese authorities conceived as local settlement was the acceptance of Japan's demands by the North China authorities, without the confirmation of the Chinese Government. Acceptance of this proposal would obviously have the dual effect of weakening the power of the local authorities by depriving them of the support of the Central Government and of virtual recognition by the Central Government of an autonomous North China.

United States Offer of Good Offices

The hostilities which broke out in North China had caused serious concern to the third powers who desired


to see peace in the Far East. On 17 July 1937, United States Secretary of State, Cordell Hull, issued a statement to the effect that the United States constantly and consistently had advocated maintenance of peace, national and international self-restraint, abstinence by all nations from use of force in pursuit of policy, adjustment of international differences by peaceful means, faithful observance of international agreements, upholding of the sanctity of treaties, respect of nations for rights of others, and a revitalizing and strengthening of international law, and that the United States would void entering into alliances or entangling commitments, but believed in cooperative effort by peaceful and practicable means in support of the above principles.

It was on the same day that the Chinese Government sent a memorandum to all the powers signatory to the Nine-Power Treaty (Appendix No. B-10), and on the next day, 17 July 1937, Generalissimo Chiang Kai-shek made a speech emphasizing that China was not seeking war, but merely meeting attacks on her very existence. He then mentioned as minimum considerations for peaceful solution the following four points:

  1. No encroachment on China's sovereignty and territorial integrity;

  2. No alterations in the administrative system of the Hopei and Chahar provinces;

  3. No involuntary removal of principal officers appointed by the Central Government; and

  4. No restrictions to be imposed on the garrison districts of the 29th Army.

On 19 July 1937, the Chinese Ministry of foreign Affairs presented a memorandum to the Japanese Embassy in Nanking, in which the Chinese Government renewed its proposal for simultaneous cessation of troop movements on both sides and mutual withdrawal


of troops to their original positions on a date to be agreed upon by both parties. It also stated unequivocally that for the settlement of the incident, the Chinese Government was prepared to accept any pacific means known to international law or treaties, such as direct negotiations, good offices, mediation and arbitration.

Mr. Hull, in an effort to settle the matter before it spread too far, held a talk with the Japanese Ambassador on 21 July 1937. Among other things, he told the Japanese Ambassador that the United States Government was ready, and would be most glad at any time, to say or do anything, short of mediation, which, of course, would require the agreement of both parties in advance, which might in any way contribute towards composing the present matters of controversy between Japan and China. But the attitude of Japan was made clear by Foreign Minister HIROTA who, in a speech made on 27 July 1937 before the Budget Committee of the Diet, stated that the Japanese Government would reject third power intervention. On 10 August 1937, three days before the outbreak of hostilities in Shanghai, Mr. Joseph Grew, the United States Ambassador in Tokyo, told the Japanese Foreign Minister that his Government had authorized him to make a definite offer of good offices. Following this, the Japanese Ambassador in Washington, in a note to the Department of State dated 13 August 1937, stated that while Japan concurred in the principles contained in the statement made by Mr. Hull on 16 July 1937 concerning maintenance of world peace, it was the belief of the Japanese Government that the objectives of those principles would be attained only by a full


recognition and practical consideration of the actual circumstances of the Far Eastern region. The United States Department of State, however, on 23 August 1937, issued a press release reaffirming the principles laid down by the Hull statement of 16 July 1937, and urging the settlement of differences by negotiations.

The Langfang Incident

Despite the truce, fighting again broke out on 14 July 1937. Wanping was continuously shelled by Japanese artillery. On 18 July 1937, Sung Che-Yuan called on Katsuki, Commander of the Japanese Garrison Forces, and expressed regrets, as demanded by the Japanese Army. However, this did not ease the tension. Numerous incidents occurred. On the 25th of July, a clash occurred at Langfang, between Peiping and Tientsin, between a company of Japanese troops and Chinese forces. There was another clash the next day at the Kwangamen Gate of Peiping as a battalion of Japanese infantry endeavored to enter the city for the purpose of protecting the Japanese residents. While the exact cause of the outbreak of these incidents is not clear, it is significant that on the 26th, the Japanese had sent an ultimatum to the Chinese demanding, inter alia, the withdrawal of the Chinese 27th Division from the Peiping Area within twenty-four hours, failing which, Japan would attack with large forces.

Japan's Ultimatum Rejected

On 27 July 1937, the day after the Japanese had delivered the ultimatum, Premier Konoye announced that in sending troops to North China, the Government had no other purpose than to preserve peace in East Asia. Japan's


ultimatum was not accepted. Fighting broke out on 27 July 1937 at and in the vicinity of Lukouchiao. Katsuki, Commander of the Japanese Garrison Forces, ordered reinforcements from Tientsin and Tungchow with strong equipment and more than thirty airplanes. in the early morning of 28 July 19378, the Japanese made an onslaught at Nanyuan, outside the city of Peiping, with aircraft and artillery, inflicting heavy casualties on the Chinese. Large scale hostilities had thus developed.

Reaction in Germany

On 28 July 1937, the Japanese Ambassador, Mushakoji, called upon the German Reichminister, Weizsacker, and stated that Japan felt that Germany did not understand the anti-communistic efforts which the Japanese action in China constituted. He tried to show that Japan was doing anti-communistic work in China also for Germany's benefit. However, Weizsacker replied that he could not deduce an obligation on the part of Germany to approve or assist morally a Japanese action which might easily lead to the fostering of communism in China, the very opposite of the aim of both Germany and Japan.

On the same day, Weizsacker sent a telegram to the German Ambassador in Tokyo, instructing him to advise the Japanese to be moderate. He told the Ambassador that attempts of Japan to base measures in China as a fight against communism on the strength of the Anti-Comintern Pact were devious, as the said Pact had not the objective of fighting Bolshevism in the territory of third states. On the contrary, Japan's actions were rather considered to be contrary to the Anti-Comintern Pact because they would obstruct the consolidation of China and thus promote


the spread of communism. Weizsacker further stated that the radio propaganda carried on by Japan in Germany, attempting to represent the war against China as a fight against communism, was unwelcome.

In the light of the German attitude, and the nature of the operations adopted by the Japanese, very grave doubts are thrown on the Japanese reiterated declarations that they were primarily concerned in combating communism. Such declarations were repeatedly made by DOHIHARA and ITAGAKI in their initial efforts to establish the autonomous movement in North China. The Reichminister seemed to have foreseen a situation which was later testified to by a witness in this trial, that the Chinese communists began to gather strength in the troubled conditions developing after the outbreak of the Lukouchiao Incident, and that it was the Japanese who thus nurtured the communist movement.

Peiping Captured

On the same day, 28 July 1937, Generalissimo Chiang Kai-shek ordered General Sung Che-Yuan to retreat to Paoting in southern Hopei and to direct operations from there. During the next two days, 29 and 30 July 1937, intense fighting took place in Tientsin, where the Chinese forces put up a stiff stand, but subsequently they fell back toward the south along the Tientsin-Pukow Railway, while other troops fell back along the Peiping-Hankow Railway. Thus, Peiping was isolated and finally captured on 8 August 1937 by the Japanese forces under the command of Kawabe, Shozo, who paraded the streets of Peiping with his troops; announced by proclamations posted at important places that he was the military governor,


and threatened with death anyone who would defy his edicts. According to neutral observers, within eight weeks after the outbreak of hostilities, the Japanese had about 160,000 troops fighting in North China.

The Oyama Incident

While the hostilities in North China were progressing, and following the capture of Peiping by Japanese troops on 8 August 1937, another incident causing grave concern to the world occurred at Shanghai on the very next day. In the afternoon of 9 August 1937, Sub-Lieutenant Oyama and his driver, Seaman Saito, of the Japanese Naval Landing Party, were killed in front of the airdrome on Hungjao Road in a suburb of Shanghai while trying to enter the airdrome. The evidence as to the details of the incident is contradictory. However, one point is established beyond doubt; namely, that Oyama had no authority to enter the airdrome. In any event, the incident, though it contributed to the tenseness of the situation generally, is of little importance as the Japanese did not allege it as an excuse or justification for their subsequent operations.

Other Events Preceding the Shanghai War

After the Oyama Incident occurred, the situation in Shanghai became extremely tense. Within less than forty-eight hours thereafter, Japan concentrated about thirty warships in Shanghai and increased her armed forces by several thousands. At the same time, demands calculated to remove or undermine Chinese defense were made on the Chinese authorities. Hostilities broke out on 13 August 1937, and furious fighting continued thereafter.


As may be recalled, in the early part of 1932, the hostilities in the Shanghai region were brought to an end by the conclusion of the Cease-Fire Agreement of 5 May 1`932, which stipulated that the Chinese troops would remain in the positions which they occupied at that date, pending later arrangements upon the establishment of normal conditions in the area. The Chinese delegation to the Shanghai Conference, in accepting the Agreement, then declared in particular that it was understood that nothing in this Agreement implied any permanent restriction on the movements of Chinese troops in Chinese territory. In June 1937, actin on a report that the Chinese were reinforcing the Peace Preservation Corps in what he called "the forbidden area", and were constructing defense works there, including the reconstruction of the Woosung Fortress, Okamoto, the Japanese Consul-General in Shanghai, called for a meeting of the Joint Commission set up under the Cease-Fire Agreement. At the meeting held on 23 June 1937, Mayor Yui Hung-Chun, the Chinese representative, took the position that the matter was not within the province of the Joint Commission, whose duty was, as was clear from the Agreement, to supervise the withdrawal of troops. The representatives of the participating powers concluded that they could not express an opinion on conflicting interpretations. While stating that he was not authorized to give any information concerning the number of Peace Preservation Corps in the Shanghai area, and the question of fortifications, the Chinese representative did give an assurance that nothing undertaken in the area had any hostile intention or the nature of warlike preparation.

On or about 15 July 1937, after the hostilities


broke out in North China, Mayor Yui invited Consul-General Okamoto and the Japanese military and naval attachés to a meeting at which the Mayor expressed his desire to prevent the spread of hostilities to Shanghai, and asked the Japanese to cooperate. Okamoto promised cooperation and asked that China control terrorism and anti-Japanese movement. Thereafter, they maintained close touch with each other. At times, the Mayor called on Okamoto two or three times a day, requesting the latter to restrain certain actions on the part of the Japanese marines. The actions which the Chinese complained of were such as maneuvers and emergency guard measures taken by the Japanese marines. According to Okamoto, he and the Commander of the Japanese Naval Landing Party agreed to restrain the maneuvers, but as to the emergency guard measures, he explained that they were taken as a result of the disappearance of a Japanese sailor by the name of Miyasaki, who was, however, subsequently found.

In Japan, following the occurrence of the Oyama Incident, the Army was notified by the Navy on 10 August 1937 that for the time being the units in Shanghai would take no further steps, but circumstances might require preparations for sending troops. The Japanese Government then decided that it would be worthwhile to study the proposal for eventual mobilization. After the Incident, the Japanese Naval Landing Party at Shanghai was reinforced by 1,000 men from Japan. By noon of 11 August 1937, there was a relatively large fleet, including the Flagship Izumo and other naval vessels, at the Shanghai waterfront.

On 12 August 1937, another meeting of the Joint Commission was held in Shanghai. While reiterating that the Commission had no authority over the issues, the Chinese


representative pointed out that it was Japan who had rendered the Cease-Fire Agreement null and void by stationing the armed forces at Paitzuchiao, or the Eight Character Bridge, a place far beyond the railway from which it had been agreed that the Japanese forces would be withdrawn, and consequently Japan had no right to invoke the agreement. He further pointed out that Japanese armaments and supplies were being landed, and further reinforcements were on the way; that these measures constituted a serious threat to the peace and order in Shanghai, and that China had the right to adopt measures for self-defense. The Japanese representative admitted, in the meeting, that Japanese forces had been in the Paitzuchiao area and made no denial of the naval concentration and reinforcements, other than an explanation that the Naval Landing Party had not yet prepared to do anything, while the Chinese representative also reiterated the statement that the right to adopt measures of self-defense accounted for her military movements.

At the same meeting on 12 August 1937, when the parties were asked to give assurances not to make an attack within forty-eight hours, the Chinese stated that they would not attack unless they were first attacked, while the Japanese rejoined that they would cause no trouble unless provoked or challenged, and then related the case of the arrest of a Japanese newspaperman by the Chinese as an illustration of provocation. The meeting brought about no solution of the trouble.

The Shanghai War

On 13 August 1937, fighting broke out at a point near the headquarters of the Japanese Naval Landing Party and at another point in the Paitzuchiao area. The


Japanese alleged that the cause of the outbreak was the firing by Chinese troops on the Japanese Landing Party. On this point the evidence is contradictory. Even if their version was correct, it would not, in our opinion, justify the extent and magnitude of the operations which followed, as hereafter related.

As soon as the clash occurred, the Japanese Government on 15 August 1937, announced its decision to dispatch a force of two divisions form the homeland for the declared purpose of protecting Japanese subjects in Shanghai. A mobilization order was also issued on the same day, and MATSUI, Iwane, was appointed Commander of the Japanese Expeditionary Forces in Shanghai. Clearly, the Japanese Cabinet had decided to abandon the policy of localization. Fighting in the Shanghai area was intense. Further Japanese reinforcements arrived at Shanghai on 23 August 1937. Aircraft were brought into action by both sides. Japanese airplanes bombed Nanking, the capital of China, and numerous aerial bombardments were carried out on the ports, and also on cities in the interior. The Japanese fleet, while cooperating with the forces on land, patrolled the coast to prevent supplies from being brought to the ports by Chinese ships, a number of which were sunk.

While the fighting at Shanghai was in full swing, Horinouchi, the Japanese Vice-Minister of Foreign Affairs, in a radio broadcast to the United States on 1 September 1937, defended Japan's actions in China on the ground of China's anti-Japanese acts and asserted that Japan's intentions were peaceful. He stated that the ultimate object of the current hostilities in North China and


Shanghai was the realization of a situation permitting genuine cooperation between the two countries. Speeches of similar purport were subsequently delivered to the Japanese Diet by Foreign Minister HIROTA. It is clear that while these speeches were made, they had in mind Japan's policy of making North China a special area subservient to Japan, a policy which had been openly adopted by the successive cabinets since 1935. To implement this policy, a full scale war was being waged, extending as far south as Shanghai in Central China.

As hostilities continued, still further reinforcements were poured into the Shanghai area. Between the end of September and the beginning of November 1937, the Japanese Supreme Command dispatched five battalions from Japan and five more divisions from North China. In the beginning of November 1937, three divisions landed in Hangchow Bay, about fifty miles south of Shanghai, and again, in the middle of the same month, one more division landed at Paimaokiang, sixty miles up the Yangtze River from Shanghai. As the area of conflict was thus being expanded, the Expeditionary Forces under MATSUI and the divisions of the Tenth Army which had landed at Hangchow Bay were amalgamated in to the newly formed Central China Expeditionary Forces with MATSUI as its Commander in Chief. The battle continued for three months, and by 12 November 1937, the Chinese Army retreated to the West.

On 5 December 1937, the Shanghai Ta-Tao City Government was set up, under the sponsorship of Colonel Kusumoto of the Military Attaché's Office, Japanese Embassy, and Colonel Kagesa of the Headquarters of the Japanese Supreme Command, with Su Hsi-Wen, a Japanese-educated


Chinese, as the Mayor.

Continued Military Activities in North China

To coordinate the Japanese military activities being carried on in China, HATA, Shunroku, was appointed on 26 August 1937, as Inspector General of Military Education, one of the three chiefs who would nominate the War Minister whenever there was a cabinet change. DOHIHARA, in command of the 14th Division, in August 1937 took part in the drive along the Peiping-Hankow Railway, and TOJO, in command of an army corps, was engaged in hostilities in Chahar Province. At the same time, the 5th Division under ITAGAKI was driving up the Peiping-Suiyuan Railway toward Kalgan, which was captured on 26 August 1937. It is worthy of note at this point that in November 1938, the provinces of Chahar, Suiyuan, and Shansi were organized as separate local government territories under the Autonomous Federation of Mengchiang. This was an organization intended by the Japanese to rule Mongolia and Sinkiang. At the head of the Federation was Prince Teh, whose advisors were Japanese Army officers and others who took charge of political and economic questions in the Federation.

On 31 August 1937, at Hwailai, approximately one hundred miles northwest of Peiping, where ITAGAKI had an interview with European and American correspondents, he declared that it was possible for him to turn south to the Yellow River. This statement is the first indication to the public that the Japanese plans contemplated an advance to the South beyond the limits of North China, which, in fact, followed soon after. On 4 September 1937, an Imperial Edict was issued, explaining the object of the Japanese military expedition in China as "to urge grave


self-reflection upon China and to establish peace in the Far East without delay".

These military activities were accompanied by propaganda in the form of press interviews, speeches and other utterances, with the purpose of breaking the morale of the Chinese.

On 24 September 1937, Paoting, capital of Hopei Province, was captured. The Japanese generals participating in the fighting at that time stated to a foreign newspaperman that the military aim of the Japanese Army was "not so much the acquisition of territory as the annihilation, smashing, and killing of Chinese Nationalist Armies". This policy of annihilation of the Chinese Armies had been previously expressed by HIROTA in his speech of 5 September 1937, delivered in the Diet, in which he said, "we firmly believe that it is in accordance with the right of self-defense as well as with the cause of righteousness that our country is determined to deal a decisive blow to such a country, so that it may reflect upon the error of its ways. The sole recourse open to the Japanese Empire is to administer the foregoing blow to the Chinese Army, so that it may lose completely its will to fight". In the same speech, he reiterated Japan's policy in regard to North China, and concluded that the urgent need for Japan at that moment was to take "a resolute attitude and compel China to mend her ways". Japan, he said, had no other objective than to see a happy and tranquil North China, all China freed from the danger of recurrence of such calamitous hostilities as the present, and Sino-Japanese relations so adjusted as


to enable them to put into practice Japan's above-mentioned policy.

ITAGAKI's troops made further advances, and on 14 October 1937, occupied Kwisui, the capital of Suiyuan Province. On the next day, 15 October 1937, an Imperial Ordinance was enacted in Japan, creating the Cabinet Advisory Council, of which ARAKI was appointed a member, the responsibility of which was to participate in "the deliberation and planning of the Cabinet in regard to important state affairs concerning the China Incident".

On 9 November 1937, Japanese troops captured Taiyuan, the capital of Shanshi province. Immediately, the Japanese set about organizing an autonomous government at Taiyuan to govern the northern part of Shanshi Province. This puppet government was later combined with those organized at Kalgan and Kueihua as part of the new "Autonomous Federation of Mengchang" to which reference has already been made. In the Shantung Area, the North China Expeditionary Forces on 25 December 1937, captured Tsinan, capital of Shantung Province. At this stage, the Japanese Army had practically brought all the key points in North China under military occupation.

China Appealed to the League of Nations

On 12 September 1937, China appealed to the League of Nations against Japan, invoking Articles 10, 11, and 17 of the Covenant (Annex No. B-6). On 21 September 1937, the League of Nations invited the Japanese Government to participate in the Twenty-Three Powers Consultative Committee. Japan, however, maintaining an attitude of non-participation in any political activity of the League of Nations, on the ground that she had withdrawn from the League, refused


the invitation. At that time, HIROTA was the Foreign Minister in the First Konoye Cabinet.

On 6 October 1937, the League of Nations found that the military operations carried on by Japan against China were out of all proportion to the incident which was the cause of the conflict, that such action could not possibly facilitate or promote friendly cooperation between the two nations which Japanese statesmen had affirmed to be the aim of their policy, that it could be justified neither on the basis of existing legal engagements nor on that of the right of self-defense; and that it was in contravention of Japan's obligations under the Nine-Power Treaty of 6 February 1922 (Annex No. B-10), and the Pact of Paris of 27 August 1928 (Annex No. B-15). These conclusions were, on the same day, concurred in by the United States Government.

Japan's Terms for Peace

While military operations were being successfully carried on, the Japanese Government adopted, on 1 October 1937, an "Outline Regarding the Settlement of the China Incident". It provided that the incident should be brought to a speedy conclusion through the efforts of armed forces combined with timely diplomatic action. In North China, there should be designated a demilitarized zone in which peace and order were to be maintained by armed Chinese police. Japan would have the right to station troops, but she might reduce the number of occupation troops and limit them to the number present at the outbreak of "the Incident". While the Tangku Truce was to remain in force, other arrangements such as the "DOHIHARA-Chin Agreement", the "UMEZU-Ho Agreement", and the


arrangement concerning through railway traffic, mail service, air service, etc., should be dissolved. The Hopei-Chahar Political Council and the East Hopei Autonomous Council would be abolished and the administration in these areas would be conducted by the Chinese Government as it pleased. However, it was desirable that the administrative leaders of this area should bring about realization of friendly relations between Japan and China. As for the Shanghai area, there should also be designated a demilitarized zone in which peace and order should be maintained by the international police or the restrictedly armed Chinese police, to be assisted by the Municipal Police of the International Settlement. Japanese land forces might be withdrawn, but this should not include the right of anchorage of Japanese warships. For the general readjustment of Sino-Japanese relations, negotiations should be simultaneously or subsequently conducted along political, military, and economic lines. China should grant formal recognition of Manchukuo and conclude an anti-Comintern pact with Japan, enforcing strict control in the North China demilitarized zone. The Chinese customs tariffs on specified goods should be reduced and the freedom to prevent smuggling in East Hopei should be restored to the Chinese Government. This outline was approved by Premier Konoye, Foreign Minster HIROTA, the War and Navy Ministers.

British Offer of Good Offices

Prior to 27 October 1937, conversations were held between Foreign Minister HIROTA and British Ambassador Craigie concerning the cessation of hostilities in China. According to Horinouchi, then Vice-Minister of Foreign Affairs, HIROTA expressed, as his personal views, the


following conditions for solution: (1) Creation of a demilitarized zone in North China; (2) Adjustment of relations between North China and Manchukuo on a practical basis; (3) Control by China of anti-Japanese movements; and 94) Equal economic opportunities in the North China region. These views were conveyed by Ambassador Craigie to the Chinese Government, and the views of the latter were also conveyed on two or three occasions to HIROTA through the British Ambassador.

On 27 October 1937, HIROTA, in an interview with the ambassadors from Great Britain, the United States, Germany and Italy, stated that while the Japanese Government could not accept the invitation to attend the Brussels Conference, it desired to have any one of the four powers use its good offices for bringing about direct peace negotiations between Japan and China. The British Ambassador soon called upon HIROTA and informed the latter of his government's willingness to use its good offices for negotiations between the two countries. Horinouchi testified that HIROTA accepted, but it was realized afterwards that there was strong opposition within the army against Britain acting as a go-between and the scheme had to be held in abeyance. However, Horinouchi admitted in cross-examination that it was Japan's policy to reject intervention or arbitration at any time and that although good offices of third parties were always welcome, it was the desire and policy of the Japanese Government to effect a settlement of the trouble between Japan and China by direct negotiations.

The Brussels Conference

After the League of Nations had failed to bring


Japan to the conference table for the settlement of differences by negotiations, another means was being sought for the achievement of the same purpose. On two occasions, October 20 and November 7, 1937, the Belgian Government invited Japan to attend a meeting at Brussels, with a view to examining, in accordance with Article VII of the Nine-Power Treaty (Annex No. B-10), the situation in the Far East, and of studying means of settling the conflict amicably. Japan again declined the invitation, explaining that since the League of Nations, to which the convocation of the proposed conference was closely linked, had expressed views hostile to Japan, the Japanese Government believed that frank and full discussion to bring about a just solution of the conflict could not be expected. On 15 November 1937, by a resolution adopted in the Brussels Conference, Japan was pronounced the aggressor in the Sino-Japanese conflict.

The Imperial General Headquarters

Confronted with difficulties both at home and abroad, Premier Konoye desired to resign in the middle of November 1937, but was dissuaded by KIDO.

On 20 November 1937, the Cabinet set up the Imperial General Headquarters, an organization to be established in war time only. It had control of operations and tactics. The Chief of Staff thus obtained virtual control over the War and Navy Ministers. Meetings were held once or twice a week. It had a great deal of influence on the Japanese Government prior to the outbreak of the Pacific War, since its utterances were not only those of the Army General Staff and the Naval General Staff, but also of the Emperor, who was its head.


The Attack on Nanking

When MATSUI was appointed Commander of the Shanghai Expeditionary Forces and left Tokyo for the fighting area, he already had thoughts of pushing on to Nanking after the intended capture of Shanghai. He requested five divisions for the Shanghai Expeditionary Force before leaving Tokyo. Actual preparations for the advance upon China's capital were made, for he had previously made a study of the topography in the vicinity of Shanghai and Nanking. on 8 October 1937, MATSUI issued a statement in which he said "the devil-defying sharp bayonets were just on the point of being unsheathed so as to develop their divine influence, and that the mission of the Army was to fulfill all its duties of protecting Japanese residents and interests, and to chastise the Nanking Government and the outrageous Chinese." As the area of hostilities around Shanghai was likely to expand, MATSUI was appointed Commander in Chief of the Central China Expeditionary Forces.

MUTO, Akira, was appointed MATSUI's Vice-Chief of Staff in late November 1937. Approximately one moth after the capture of Shanghai, the Japanese Army arrived outside the city of Nanking. MATSUI issued an order to the effect that, as Nanking was the capital of China, its capture was an international event, and careful studies should be made so as to dazzle China with Japan's military glory. The Japanese demand for surrender was ignored by the Chinese Government. Bombardment started, and the city fell on 13 December 1937. The Japanese Army that entered Nanking was a newly-formed organization, but it was composed of experienced troops.


MATSUI made his triumphant entry on 17 December 1937. From 13 December onward, there occurred what has come to be known as the "Rape of Nanking", which will be dealt with in a later phase.

On 1 January 1938, a provisional self-governing body was set up, flying the old discarded five-coloured Chinese flag instead of the Blue Sky and White Sun which is the official national flag of China.

Germany Acted As Go-Between

Having ignored the offers of good offices made by the United States and Great Britain, the Japanese Army desired that Germany should be asked to act as go-between. On 5 November 1937, certain peace terms proposed by Japan were conveyed to the Chinese Government through Trautmann, the German Ambassador in Nanking. Subsequently, on 28 and 29 November and 2 December, the German Ambassador again communicated the intentions of the Japanese Government and informed the Chinese authorities that the terms proposed by the Japanese Government early in November were still to stand. China was prepared to take the points proposed by Japan as the basis of discussion. The proposed terms were embodied in what was called the August Plan drafted in July 1937, by officials of the Japanese Foreign, War, and Navy Ministries, but approved on 5 August 1937 by the above-mentioned ministries. It consisted of three main points: (1) Establishment of unfortified zones along the River Paiu-Ho and the withdrawal of Japanese and Chinese troops from the areas specified as such; (20 No annexation of territories; and (3) No indemnities. Negotiations on the lines of these terms were being conducted between Japanese Ambassador Kawagoe and


the Chinese, when they were interrupted by the outbreak of the Shanghai hostilities on 13 August 1937.

One day in December 1937, according to the testimony of Horinouchi, Foreign Minister HIROTA was told by German Ambassador Dirksen that he had information from Ambassador Trautmann in Nanking that the Chinese Government had the intention of reopening peace negotiations on the basis of the Japanese terms, and was asked if there was any alteration in the peace terms of the August Plan. Thereupon, the question was submitted to the Liaison Conference of the Government and the Army and Navy, and was placed on the agenda for the meeting of 20 December 1937. The fall of Nanking on 13 December 1937 had considerably stiffened the attitude of the Japanese towards China. The Liaison Conference decided upon four fundamental terms of peace, which were as follows: (1) Collaboration with Japan and Manchukuo in an anti-communist policy; (20 Establishment of demilitarized zones and special administrative organs in designated areas; (3) Creation of close economic relations among Japan, Manchukuo and China; and (4) Necessary reparations by China. The differences between these Peace Terms and those of August 1937, which had been communicated to the Chinese Government, were so great fundamentally that their acceptance by the Chinese would have involved, amongst others, one that China had refused to accept from 1931; namely, the independence of Manchuria. In the circumstances, it is not surprising that the overtures led to no practical solution of the difficulties.

On 22 December 1937, HIROTA communicated the above terms to Ambassador Dirksen, stating that as there


had been a great change in the situation, it was not possible any longer to offer the earlier conditions. He said that if the Chinese side would generally agree on the new terms, Japan would be ready to enter into negotiations; otherwise, Japan would have to deal with the incident from a new standpoint. These new terms were communicated to the Chinese Government on 27 December 1937, through Ambassador Trautmann.

On 13 January 1938, the Chinese Minister of Foreign Affairs replied to Trautmann that, as the new peace terms proposed by Japan were so general in their terms, the Chinese Government desired to be informed in detail of their nature and content, in order to make a careful examination and reach a definite decision. The Chinese reply was communicated to HIROTA on 14 January 1938.

The Imperial Conference on 11 January 1938

While the peace terms were being offered to China, there developed a difference between the Army and the Government in Japan. The Army General Staff thought that the terms of peace were not only vague, but also aggressive. They were in favor of giving more specific terms. The General Staff was concerned about the protracted nature of the war in China. Not only was it a drain upon Japanese resources, but it embarrassed military and economic preparations for war against Russia, America and Great Britain. The Government under Konoye preferred to state them in general terms. Foreign Minister HIROTA and Education Minister KIDO supported Konoye's view; Home minister Suyetsugu drafted the four terms, and Foreign Minister HIROTA caused them to be communicated to the


Chinese Government. On 11 January 1938, while the reply of the Chinese Government was being awaited, an Imperial Conference was held, which was attended by HIRANUMA, who was President of the Privy Council. HIROTA explained the "Fundamental Policy for the Disposition of the China Incident", providing for close collaboration and unity between Japan, Manchukuo, and China. Based upon this policy, two alternative measures were adopted at the conference. on the one hand, the conference decided that if China should ask for conciliation, Japan would negotiate in accordance with the conditions of peace as contained in an addendum to the "Details of the Conditions of the Negotiations for Peace between Japan and Chin," which included, among other items, formal recognition of Manchukuo by China; establishment of an anti-communist self-government in Inner Mongolia; creation of demilitarized areas in occupied territories of Central China and recognition of Japan's right to station troops in designated areas of North China, Inner Mongolia, and Central China. On the other hand, if China refused to reconsider, Japan would not only consider the Chinese Government her opponent, but would assist in the formation of a new Chinese Government with which Japan could cooperate. Thereupon, the Chiefs of Army General Staff and Navy General Staff and the President of the Privy Council expressed their approval. Thus were the details of peace conditions drawn up.

On the day when the Imperial Conference adopted the above plan, Ambassador Trautmann reported to his government that the telegram which he received from Tokyo


contained no further information except that Japan seemed to be altering for the second time their peace proposals which were issued through the German Embassy, and "we are losing face with the Chinese through this".

The Konoye Declaration of 16 January 1936

Upon receipt of the Chinese reply of the 14th of January through the German Ambassador, saying that the terms covered a very wide scope, that they desired further details in order to make a final decision, HIROTA became very angry and declared that it was China and not Japan who was beaten and must ask for peace. When reminded that officially China had knowledge of only four fundamental conditions, and the rest had been kept, at his wish, in a very indefinite form, HIROTA agreed to take the matter up with the Cabinet. In an all-day session of the Cabinet on 14 January 1938, according to KISO, HIROTA reported the course of the peace negotiations with China and concluded by asserting that there was not good faith on the Chinese side. The Cabinet decided not to deal further with the Chinese National Government under Generalissimo Chiang Kai-shek.

On 15 January 1938, a meeting of the Liaison Conference was held, and, after lengthy discussion, the government plan was adopted, although some members of the General Staff still preferred reconciliation. On 16 January 1938, Konoye issued a public statement announcing Japan's firm policy as decided by the Cabinet and the Liaison Conference. This historically important document


which decided the trend of relations between these two Asiatic countries, as translated for this Tribunal, reads as follows:
The Imperial Government has been patient enough, after the occupation of Nanking, to give the last opportunity to the Chinese National Government for reconsidering the situation. But they do not understand our real intention, attempt foolishly to counter-attack, disregard the greatest distress of the people at home and do not mind the peace of the entire East Asia. Thereupon, the Imperial Government will not care for the National Government thereafter, and expect the establishment and development of a new government of China and will really be worthy coalition with our Empire. We desire to strive, rising under cooperation with such new government, to arrange the relation between the two countries and to construct a new revived China. Of course, there will be not even a slight change in our policy that respects the territoriality and sovereignty of China and the rights and interests of other powers in China. Our responsibility for the peace of East Asia is now increasing heavier and heavier. It is the most earnest desire of the Government that our people devote themselves to perform this important mission.

The door was thus closed to further negotiations, and the stage was set for further invasion and the development of local regimes ultimately for the creation of a "new government" in China which would cooperate with Japan.


Section V
The Provisional Government in North China

Prior to Konoye's declaration that Japan would not deal with the National Government of China, new regimes had already been set up by the Japanese in occupied territories, such as those in Northern Shansi, Kueihua, Kalgan and Shanghai, as well as so-called "Peace Maintenance Organizations" in various localities. These were merely local authorities governing areas of limited extent. There was one which covered a much larger area and was in line with Japan's policy of establishing a pro-Japanese autonomous regime in North China, i.e., the Provisional Government in Peiping. When hostilities first broke out in North China, Wang Keh-min, a retired high-ranking Chinese official who later headed the Provisional Government, was in Hong Kong. He was persuaded to come North by Japanese Army men stationed in Peiping and Shanghai, and staff officers from Peiping and Formosa were dispatched to Hong Kong for the purpose. As a result, Wang came to Shanghai on 24 November 1937, and on 6 December 1937, was flow to Japan and went then to North China. The Japanese authorities in North China had made great efforts under the plan to make the North China regime the Central Government of China in the future, and arranged to invite not only Wang, but also other notable figures in South China through army officers who were stationed in Shanghai. After Wang's arrival in Peiping, on 14 December 1937, the day after the fall of Nanking, the Provisional Government was formally inaugurated in the presence of officers of the Japanese Army. Foreign journalists were invited to attend.


Wang Keh-min became also the chairman of the Hsin-Min-Hui or New People's Association, which had been created in December 1937 under orders of the Japanese Expeditionary Forces in North China. The function of this association was to make known to the people the policies of the puppet government and to keep the latter in touch with the people. The vice-chairman of the association was a Japanese.

The Konoye declaration of 16 January 1938 gave fresh impetus to this Provisional Government. The various peace maintenance organizations in the Peiping and Tientsin areas had joined it and subsequently, on 30 June 1938, the East Hopei Regime was also amalgamated with it.

By the end of January 1938, the Provisional Government had revised the Chinese customs tariffs on certain articles in the foreign export and import trade of North China. The United States Ambassador Grew delivered, on 31 January 1938, a protest to HIROTA, stating that the National Government of China was the only one authorized to do this, and that the United States was addressing her representation to Japan, because "for the creation and the acts of the provisional regime the Japanese Government has an inescapable responsibility." The Federal Reserve Bank of China was incorporated in February, and commenced its business of 10 March 19038, and was authorized by the Provisional Government to issue paper currency. While the governor and vice-governor were Chinese, the directing personnel were mainly Japanese.

This Provisional Government, together with the Renovation Government in Central China, later accepted the


invitation of Wang Ching-wei to participate in the organization of a so-called new Central Government.

Confirmation of the part played by Japan in the formation of the Provisional Government is derived from a document produced form the records of the General Affairs Bureau of the Japanese Foreign Ministry. It recorded that:

In 1937, following the collapses of Teh-chow, Suiyuan, Changte, Taiyuan, etc., in North China, at the end of November the National Government had broken up and removed to Hankow, Chungking and Changsha and finally Nanking collapsed on 13 December, deciding the general trend of the war situation. Thus the opportunity to establish a new regime which was prearranged among the important men in North China had matured.

The circumstances in which Wang-Keh-min consented to become the head of the North China regime are as follows: At the beginning of the incident he was at Hong Kong. The head of special service facilities in Peking, Major General Kita, eagerly made efforts through Fiji Yamamoto, who was in Shanghai, to persuade Wang to accept the invitation; meanwhile, staff officers from Peking and Formosa were specially dispatched to Hong Kong for the same purpose. As the result Wang came to Shanghai on 24 November, and on 6 December made a flight to Fukuoka and went to North China with Yamamoto and Yu Chin.

It is said that when Wang entered Shanghai, he had not yet consented to become the head of the North China regime but on condition that he made an inspection trip he consented to the journey.

The North China army authorities had made great


efforts under the plan to establish the North China regime as the Central Government of China in the future and arranged to invite not only Wang but other influential men from South China through Yoshino and Imai (military officers) who were stationed in Shanghai. Toward this policy the central army and General Terauchi gave approval; however, a section of the military officers in Shanghai expressed opposition, especially Colonel Kusumoto was opposed to pulling out many influential men from Shanghai, on the ground that there is no necessity to determine North China as the political center from the beginning.

After the arrival in Peking, Wang keh-min decided to accept the chairmanship of the North China regime and determined government organization and fundamental principles. On 14 December 1937, the Provisional Chinese Government was established at Peking.

The Renovation Government in Central China

The foregoing document further shows:
Movement for establishment of a new government in Central China.

When the Japanese force crushed the Chinese Army in Shanghai, and its vicinity, and subsequently on December 13, 1937, captured Nanking, movements for creating a new regime in the Central China were launched. First of all, the Shanghai Tatao Municipal Government was organized in Shanghai on December 5. In various places other than Shanghai public order maintenance associations came into being. Among these, the major organs are the Nanking Public Order Maintenance Association and the Hangchow Public Order Maintenance Association established on


January 1, 1938. Nevertheless, in Shanghai area the influence of the Chiang regime and the Nationalistic Party proved to remain strong, far more than what was anticipated, even after the fall of Nanking, so that it was impossible for pro-Japanese elements to openly approach the Japanese even in the International Settlement. Thus, the matter of building up a substantial regime had long been difficult unlike the case in North China."

Following the declaration of 16 January 1938, Premier Konoye and HIROTA addressed the Diet on 22 January 1938, and discussed Japan's policy, emphasizing the prospective emergence of a new Chinese regime to cooperate closely with Japan for the ultimate establishment of a new order in East Asia. On 27 January 1938, the Konoye Cabinet decided on a "Programme for the Establishment of a Central China New Regime." That is to say, notwithstanding protestations that this was a spontaneous Chinese movement, the Japanese Government took it upon itself to decide upon the "Programme for the Establishment of a Central China New Regime." The document already referred to as having been produced form the records of the General Affairs Bureau of the Japanese Foreign Office discloses the extent of Japanese direction of the movement:

  1. General Principles.

    1. They shall found a highly pro-Japanese regime, gradually free themselves from dependence on Europe and America, and establish the foundation of a district in China dependent on Japan.

    2. The direction of that regime shall be so exercised that the regime, in the course of its future


      development shall smoothly amalgamate with the North China Regime. The direction shall stop at general inner direction by Japanese advisors. Detailed direction and interference in administration by appointing Japanese officials shall be avoided.

    1. Chiang Regime shall be annihilated. At the same time, elimination of Communists and destruction of the Nationalist Party in a short time within the area under Japanese occupation shall be realized. Afterwards similar operations shall be speedily extended to neighboring areas."

The programme provided for nominal Chinese control, but as to administration and finance, it was directed. "The foundation of finance shall speedily be established, banking organs adjusted, and Japan-China economic collaboration in Central China realized. Measures for it are described in another programme." The direction upon arms was -- "As for armaments, minimum army shall be trained for maintenance of peace and order, and make efforts, under the guidance of the Japanese Army, to restore public order. But the navy and air force shall be included in the defence plan of Japan." The new regime was to be developed as follows.

The New Regime shall be speedily set up, and, by nurturing it, antagonistic influence shall be destroyed with physical and moral pressure.

For this purpose, local autonomous bodies which are being set up successively in the areas under Japanese occupation, shall be strengthened, and public sentiments desiring the establishment of a New Regime backed by


Japan shall be powerfully stimulated. Moreover, in and around Shanghai, economic rehabilitation shall be speedily realised, thereby to contribute to the establishment of the New Regime set up.

Of the expenditures in the initial stage of the New Regime, considerable part shall be borne by Japan.

For the relief of war sufferers, and rehabilitation of industries, emergency measures shall be speedily taken. Especially, agricultural produce shall be smoothly supplied to the market; and farmers shall take to spring farming without uneasiness.

For this purpose, maintenance of local peace shall be undertaken by the Japanese Army to the best of their ability until the establishment of new local government organs.

Order of the establishment of the new administrative setup is as follows:

  1. Central Government setup, especially legislative and executive departments.

  2. Shanghai Special Municipality setup.

  3. Provincial Governments setup.

  4. Organization of country autonomous bodies and downwards.

In parallel with the execution of 1 and 2, the influence of Tsingpan and Chihpan (Chinese secret societies) shall be turned pro-Japanese, and made to assist the New Regime directly and indirectly.

In fixing new administrative districts, former ones shall generally be preserved.

In foreign settlements, with the strengthening


of the New Regime, Japanese influence shall be gradually extended, and, after the establishment of the New Regime, the organs of the old regime under the control of Japanese Army and Navy shall be taken over by the New Regime at proper opportunity, causing at the same time outstanding issues to be speedily settled.

In the early stage of the war, movements for creating a new regime had already been started. MATSUI, through Sugano, sought to persuade certain senior Chinese officials to form a new regime, but without success. When Liang Hung-chi, who later headed the Central China regime, and others came into the matter with the assistance of the Japanese Army and Navy special service organs, the new regime began to assume a more definite shape. On 28 March 1938, the Renovation Government, which was sometimes referred to as the Reformed Government or the Restoration Government, was formally established. Together with the Provisional Government in North China, it later accepted Wang Ching-wei's invitation to organize a so-called new Central Government.

Thus was realized the Japanese planning for the creation of a pro-Japanese, and indeed a Japanese-dominated, Chinese "Government."

Other Cities Invaded by Japanese Troops Under Hata's Command

HATA was appointed Commander of the Japanese Central China Expeditionary Forces on 14 February 1938, succeeding MATSUI. Three days later, HATA became Commander-in-Chief of all Expeditionary Forces in China, succeeding Nishio, and remained in that post until November 1938.


HATA's original task was to conquer the triangular area between the cities of Shanghai, Nanking and Hangchow. There developed later the purpose of continuing the operations and to expand the area of conflict farther into the interior if China did not come to terms. In a talk between Honjo and KIDO, the former was quoted by KIDO has having said: "After the battle of Suchow (Hsuchow) it is, on the one hand, necessary to show an attitude of advancing to Hankow, but, at the same time, it is essential to take steps for settling the incident. If things do not turn out as hoped for, I believe it would, by all means, be necessary to establish a close connection also with the Supreme Command and enter into protracted warfare by planning to continue for about three years." KIDO agreed generally with Honjo's opinion and promised to do his best, as he records in his diary of 19 May 1938.

HATA, having secured the triangular district referred to, proceeded against Hankow, which fell to the Japanese on 25 October 1938. In that campaign, he had a force of 300,000 to 400,000 men sent to him from North China. These forces moved deep into the interior of China, and at the dates shown below, had captured the following important cities:

19 May 1938, Hsuchow, strategic junction of the Tientsin-Pukow and Lunghai Railways; 6 June 1938, Kaifeng, capital of Honan Province; 27 June 1938, Matang, important fortification on the Yangtze River; 25 July 1938, Kiukiang, leading commercial city in Kiangsi Province; 12 October 1938, Sinyang, important point on the-Hankow Railway; 25 October 1938, Hankow, in the center of China.


With the occupation of such important cities over so vast an expanse of territory, it is not surprising that HATA in interrogation acknowledged that it was a war that was being waged in China, rather than that which the Japanese Government euphemistically called it, an "incident".

The National General Mobilization Law

In anticipation of a protracted war, the Japanese Government enacted a National General Mobilization Law. The draft had been prepared by the Mobilization Plans Bureau and approved by the Cabinet. When it came before the Diet in February 1938, SATO, then in the Military Affairs Bureau, assisted Premier Konoye in making the necessary explanations and securing the passage of the bill. It went into effect on 5 May 1938. It was designed to control and operate all human and material resources so as to utilize the national power most effectively for "national defense purposes" in time of war "(including an incident corresponding to a war)". It authorized the general mobilization of all Japanese subjects or juridical persons or other organizations to cooperate with state or other organizations or persons nominated by the Government.

Itagaki Became War Minister

Pursuant to the wishes of the Army, ITAGAKI on the 3 June 1938, was appointed War Minister in the Konoye Cabinet after its reorganization in may. Immediately before this, ITAGAKI had been successively Vice-Chief of Staff and then Chief-of-Staff of the Kwantung Army, Commander of a Division in China and on the General Staff. MUTO in July 1938, was appointed Vice-Chief of Staff of the North China Expeditionary Forces. Japan had hoped the Hsuchow Battle


would be decisive by engaging and defeating the main forces of the Chinese Army. As the Chinese Government did not yield, even after the capture of Hsuchow, the Japanese Supreme Command proceeded with the plan to drive on to Hankow to deliver yet another blow to the Chinese in the hope of reaching an end of the Chinese war. ITAGAKI, realizing that the war threatened to become a protracted one, sought to bolster the determination of the Japanese people. In his first press interview after assumption of the post of War Minister, on 26 June 1938, he told the Domei News Agency that the army must be prepared to continue hostilities perhaps for ten more years. He said also that Japan would follow her own policy without fear or hesitation, notwithstanding the attitude of Third Powers. He explained that there was no need for a formal declaration of war in view of the official declaration of the Japanese Government of the 16th January.

Minister of War ITAGAKI took part in the Five Minister's Conferences, some of the decisions of which will be discussed presently.

China Policy and the Five Ministers' Conference -- 1938

The practice of holding conferences apart from the Cabinet among the Premier, Foreign Minister, War Minister, Navy Minister and Finance Minister was not new when ITAGAKI joined the Cabinet. Discussions had been held and plans developed in this way under the HIROTA and Hayashi Cabinets. But meantime, the Conferences had gained in importance and frequency because of the circumstances following the intensifying of the war which developed after


ITAGAKI became War Minister. Between June and October 1938, the Five Ministers' Conference, with ITAGAKI participating, made successive decisions of the utmost importance concerning policies toward China, directed not only to the conduct of the war, but also to the establishment of a Japanese-dominated or "puppet" government for the whole of China as distinct from the local "puppet" governments already established. For instance, on the 8 July, it was decided in the event of the surrender of Chiang Kai-shek's Government:
In case of surrender of the Central Government of China, Japan will regard it as one of the regime and treat it according to the "Must be made to join the newly established Central Government of China" policy decided upon by the Imperial Conference.

In case the present Central Government of China surrenders and accepts the third condition, (item three of the document, the conditions for surrender) stated later, it shall either be considered as a friendly regime and will be permitted to join the newly established Central Government, or be made to establish another new central government in cooperation with various existing pro-Japanese regimes.

The conditions for the recognition of the surrender of the present Central Government of China include:

Retiring from public life of Chiang Kai-shek.

On the same day, alternative decisions were made in the event of Generalissimo Chiang Kai-shek continuing to fight on.

It is to be noted that the constant policy was to foster and enlarge the Japanese-controlled "Central"


Government, the creation of which by Japan has already been discussed.

Again, on 15 July 1938, the Five Ministers' Conference decided in respect of the "new" Central Government of China:

Though the establishment of the new Central Government of China shall be undertaken mainly by the Chinese, it shall be internally assisted by Japan. The principle of the collaboration of individual local governments shall be adopted to their government form.

A Joint Commission shall be established as soon as possible through the cooperation between the Provisional Government and the Restoration Government, to be joined later by the Mongolian and Sink-Kiang (Mengkiang) Joint Commission. Then we should guide this regime so as to grow into a real central government by gradually absorbing various other influences or collaborating with them.

It was "we", the Japanese, not Chinese, who were to guide the growth of the "new" Central Government.

The new Central government shall not be established until after the fall of Hankow, with the Chiang Kai-shek regime reduced to a mere local government or until the reformation of the present Central Government is brought about by Chiang Kai-shek's retirement from public office.

In case the Chiang Kai-shek regime is broken up or reformed, and should a pro-Japanese government turn up, we would make it a factor of the central government system and proceed to set up a central government.

Adjustment of the relations between Japan and China in connection with our control of the establishment


of the new Central Government of China, shall be done on the following basis, and its concrete matters shall be decided separately.

The "basis" included:

The establishment of the general policy for the collaboration among Japan, Manchukuo and China based upon reciprocity, particularly on neighbourly friendship and goodwill, anti-Comintern and joint defense and economic cooperation. In order to attain the above objectives, Japan will give internal guidance during a certain period.

The Military position of the "new" Chinese Government was settled in the following decision of the Five Ministers' Conference:

We will urge the surrender of the Chinese Army, conciliate them, and bring them under control. We will strive to make them support the new government by promoting their anti-Chiang Kai-shek and anti-Communist consciousness, and making as many Chinese troops as possible cooperate with the Japanese Army for destruction of the Anti-Japanese and pro-Communist Army, and thus guide the racial conflict toward an ideological opposition.

The necessary Japanese troops will be stationed at ports, railways, waterways, etc. in the occupied areas which are strategic for communications, as well as at the locations of important resources; and in remote districts armed Chinese troops will be organized to ensure the preservation of peace. The numerical strength of the troops will be decided in accordance with the actual local situation.

We will conclude an anti-Communist Military


Alliance and gradually reorganize the Chinese Army to place it under the direction of the Japanese Army. When the circumstance permit, we will reduce our military strength to the minimum necessary for our national defense.

The decisions upon economic matters included the following:

The development of the economy and communication will contribute to the establishment of the national defense of Japan, Manchukuo and China, and satisfy the development of the economy of the three countries and the welfare of its people. Japan especially will materially hold the necessary transportation. In North China the demand for national defense shall be the first consideration and in Central and South China the interests of the people will be particularly considered.

We shall carry out the development of economy following the principle of ministering to each other's wants among Japan, Manchukuo and China and advance energetically for the accomplishment of the three countries' economic sphere. However, we shall respect the rights and interests, already obtained by the third countries, and not interfere with their participation in the economic development.

Railway, water transport, aviation and communication will be materially placed under Japan's power, and satisfy the accomplishment of military activities and contribute to the welfare of the people.

These quotations from the policy decisions of the Five Minister's Conference indicated the general scheme to create a government in China completely dominated by Japan,


but built up behind a façade of Chinese autonomy.

The Dohihara Agency

To advance the programme of establishing a new central government in China along the lines just discussed, the Five Ministers' Conference on the 26th July decided upon the creation of a Special Commission on Chinese Affairs. In particular, the decision was as follows:
The Special Commission for China belongs to the Five Ministers Council and is an executive organ exclusively for working out important stratagems against China and establishing the new Chinese Central Government in accordance with the decision of the Council.

Every organ at the actual places concerned with the above-mentioned business is directed by the Special Commission for China in connection with the said business.

The Army and Navy Ministers will be in charge of the liaison between Special Commission for China and the Imperial Headquarters.

On the 29th July, the Commission was set up under DOHIHARA, Tsuda and Banzai, its functions being defined thus: The important stratagems against China in Paragraph 1 are understood as political and economic strategies which are not directly connected with military operations." Although DOHIHARA was the youngest of the commissioners, he was the only one who was a soldier in active service. He it was who undertook the administration of the affairs of the Commission and for the purpose set up an establishment in Shanghai under the name of the "Dohihara Agency". DOHIHARA was able to make use of his wide knowledge of China and familiarity with the Chinese. He started accordingly


to enlist Tang Shao-Yi and Wu Pei-Fu, retired Chinese statesman and general respectively, for the purpose of establishing and anti-Chiang Kai-shek government in the "enemy's midst" among high-ranking Chinese. Wu Pei-Fu was then living in retirement at Peping. DOHIHARA aimed to bring him out from retirement for active collaboration with Japan. This scheme came to be referred to as the "Wu Project". The expenses in connection with this project were to come from surplus revenues of the maritime customs in occupied China.

Tang Shao-Yi was assassinated, and negotiations with Wu Pei-Fu failed, so DOHIHARA turned elsewhere. The DOHIHARA Agency in China aided the development of a scheme to bring Wang Ching-Wei to Central China. It reported to Tokyo a conference with associates of Wang Ching-Wei concerning arrangements for Wang Ching-Wei's coming to Shanghai, etc. Although DOHIHARA claimed that he was in Tokyo at that time, it is clear that he was in control of these plans.

The "Federated Committee" of Puppet Regimes

While DOHIHARA and others were making efforts to carry out the policy of establishing a new central government in China through Chinese personages, the Japanese military authorities in Japan disclosed their determination in pursuit of this policy. SATO, then Chief of the Press section of the War Ministry, made two speeches upon the "China Incident" and said that the fundamental attitude of the government was to be found in the declaration of 16 January 1938, and that the plans for the establishment of a new regime were absolutely unchangeable. On 27 and 28


August 1938, representatives of the Tokyo government and of the Japanese Army authorities in Tientsin met at Fukuoka, Japan, and decided on a basic plan for the coordination of the Provisional Government, the Renovation Government and the Mongolia-Sinkiang Federation. On 9 September 1938, a plan for the establishment of a Federated Committee, or "Joint Committee", of these pro-Japanese organs in China was adopted by the Five Ministers' Conference. Consequent upon these decisions made in Japan, the work of developing a "new" Central Government was pursued by the Japanese on the continent. On 9 and 10 September 1938, representatives of the Provisional Government and the Renovation Government met Japanese representatives at Dairen and arranged for the establishment of a "Federated Committee" at. It was to coordinate and unify the various puppet regimes, particularly the Provisional Government and the Renovation Government, and to prepare for the establish,ment of the future "new" central government. On 22 September 1938, the inauguration ceremony was held in and the first meeting of the Committee was held on the next day.

Occupation of Canton and Hankow

Pursuant to a decision of the Five Ministers' Conference, held 8 July 1938, prescribing the occupation of certain strategic points in China, Japanese troops captured Canton on 20 October 1938, and Hankow on 25 October 1938. Steps were taken to provide for the administration of these two important cities and their adjoining areas under Japanese occupation according to the familiar pattern. On 28 October 1938, the arrangements for administration of the Canton and Hankow districts were agreed upon


among the War, Navy and Foreign Ministers. They provided for Japanese control of political affairs and for the development of a "Peace Maintenance Association". Although such regimes were to be established ostensibly at the initiative of the Chinese, political guidance was to be given by the Japanese. They were to be kept in close connection and cooperation with the Special Commission on Chinese Affairs, which, as previously noted, was a special agency under the leadership of DOHIHARA. With regard to Canton, a special instruction was given by the War, Navy and Foreign Ministers as follows:
The organization of a local regime shall be initiated by the Chinese side. However, the establishment of the regime shall be accelerated with the cooperation of our political guiding agency (The Liaison Conference of the War, Navy and Foreign Ministry authorities at Kwantung), chiefly by our strategy agency (The Special Committee Towards China). After the establishment of the regime the political guiding agency shall take up its internal guidance.

The policy of occupying strategic points in China was carried much farther than the capture of Canton and Hankow, for on 25 November 1938, the Five Ministers' Conference decided upon the seizure of Hainan Island, in the extreme south of China. this island was captured by the Japanese on 10 February 1939.

Japan Terminated All Relations With League of Nations

Although Japan had notified her withdrawal from the League of Nations in March 1933, she continued to participate in certain of the activities of the League.


After the fall of Hankow and Canton, the attitude of Japan towards third powers stiffened. On 2 November 1938, at a meeting of the Privy Council, which was presided over by HIRANUMA and attended by the Premier and Ministers of State, including ARAKI, KIDO, ITAGAKI and Privy Councillors MINAMI and MATSUI, continuance of cooperation with the League was considered, inasmuch as matters relating to diplomacy and treaties were within the province of the Privy Council. On the ground that a resolution had been adopted on 30 September 1938 by the Council of the League of Nations condemnatory of Japan, it was considered impossible, having regard to national honour, for Japan to have further cooperation with the organs of the League, and consequently, a plan for the termination of cooperative relations between Japan and the various organs of the League, except the mandatory rule of the South Sea Islands, was drawn up and adopted by unanimous vote at the Meeting. Notice to that effect was immediately served on the League of Nations.

The New Order in East Asia

Following her decision of complete withdrawal from the League of Nations, Japan proceeded to what it called the "New Order in East Asia." On 3 November 1938, the Japanese Government issued a statement advising the world that with the fall of Canton, Wuchang, Hankow and Hanyang, chief cities of China, the National Government had been reduced to a local regime, and that the ultimate aim of Japan was to establish, in collaboration with Manchukuo and China, a New Order which would secure eternal peace in the Far East.


On 29 November 1938, Foreign Minister Arita submitted a report to the Privy Council of which the following are some of the more significant passages:
As to the policy for adjustment of new Sino-Japanese relations, it is our intention to proceed on the basis of the following points with a view to establishing a New Order in East Asia through mutual collaboration in political, economic and cultural fields among Japan, Manchukuo and China: . . . as to the problem of making peace with the Chiang Kai-shek Government . . . it is our policy not to carry this out . . . Our country will foster the establishment of a new Central Government on the basis of the pro-Japanese regime which has been established in Hankow and Canton, and after the new Central Government has been firmly established, we hope to achieve the following: . . . General collaboration of Japan, Manchukuo and China; . . . Establishment in North China and Mangchiang of a zone of high degree of Sino-Japanese unity in defense and economic spheres; . . . Establishment along the lower basin of the Yangtze River of z zone of high degree of Sino-Japanese unity in economic collaboration . . . In South China, besides the establishment of special zones on certain specified islands along the coast, endeavours shall be made to secure the foundation of Sino-Japanese cooperation and collaboration with the major cities and towns as starting points . . . Regarding . . . principle of joint defense, we hope to have Japan, Manchukuo and China, with the chief objects of jointly defending themselves against the Comintern and at the same time cooperating with each other


in the maintenance of common public order and peace, adopt the following programme: . . . The early withdrawal of Japanese troops, excepting the stationing of troops in specified zones, and islands for the purpose of guarantee and the maintenance of public peace and order . . . Recently Britain, the United States, etc. have made various representations based on the principle of open door and equal opportunity. In this connection it is the intention of the Imperial Government to cope with the situation by adopting the policy of examining the so-called open door and equal opportunity principle from the standpoint of the establishment of a Japan-Manchukuo-China economic bloc based upon the necessities for the existence and defense of our Empire, and of not recognizing such a principle within the extent that it is incompatible with this standpoint . . . our chief objects are that: (a) Japan shall control in substance the development of natural resources for national defence and principally North China and Mengchiang; (b) The currency system, customs and maritime customs system in new China shall be adjusted form the standpoint of Japan-Manchukuo-China economic bloc. So long as the powers' rights and interests in China do not conflict with the foregoing two objects, we will not purposely exclude and restrict them.

Premier Konoye made a further speech on 22 December 1938, reiterating Japan's resolution to exterminate the Chinese National Government and to establish a New Order in East Asia.

This Japanese "New Order in East Asia" caused the United States grave concern. On 30 December 1938,


Ambassador Grew, under instructions from his Government, addressed a note to the Japanese Government, in the course of which he said: "Further, with reference to such matters as exchange control, compulsory currency circulation, tariff revision, and monopolistic promotion in certain areas of China the plans and practices of the Japanese authorities imply an assumption on the part of those authorities that the Japanese Government or the regimes established and maintained in China by Japanese armed forces are entitled to act in China in a capacity such as flows from rights of sovereignty and further in so acting to disregard and even to declare non-existent or abrogated the established rights and interests of other countries including the United States." Again, on 31 December 1938, Ambassador Grew delivered a note informing the Japanese Government of the view of his own Government that the so-called "New Order" could not be created by Japan's ex-parte declaration.

ITAGAKI was quoted by Japan Advertiser newspaper of 17 March 1939, as having declared in the Diet that in order to establish to so-called New Order, conflict with third powers was inevitable. Britain and France were Japan's next objective, while Russia was the first.

On 7 July 1939, on the occasion of the second anniversary of the Lukouchiao (Marco Polo Bridge) Incident, ITAGAKI was reported as giving a press interview, in the course of which he said that Japan's mission of constructing a New Order in East Asia would necessitate the stamping out of unjust interference by third powers.


The Ko-A-In or Asia Development Board

After the Japanese Army had made deep penetration into the interior of China, steps were taken by the Japanese to review the administration of the occupied areas, hitherto undertaken by the special service organs of the Japanese Army, preparatory to the formation of a New Central Government. Foreign Minster Ugaki desired to have a new organ to deal with China Affairs within the Foreign Office, but this suggestion was opposed by the Army. It was later decided, at the instance of the Army, that a China Affairs Board or some such organization be planned. The new organ to be set up was distinct form the Special Commission on Chinese Affairs created by the Five Ministers' Conference on 26 July 1938. The latter was an agency concerned with the means of crushing the Chinese National Government and establishing a new central government, while the Board to be established was to be concerned, primarily, with matters of administration in occupied areas.

On 16 December 1938, this new organ came into being under the name of Ko-A-In, or Asia Development Board, but more frequently referred to as the China Affairs Board. The Premier was the President and the Ministers of Foreign Affairs, Finance, War and Navy were Vice-Presidents. According to the regulations governing its organization, the Board was put in charge of the following: politics, economics and culture, and the formulation of policies relating thereto; the supervision of commercial concerns to undertake enterprises in China under special laws or to do business in China; and the coordination of administrative affairs in China conducted by Japanese Government agencies.


Its head office was in Tokyo, with four branch offices in Shanghai,, Kalgan and Amoy, and two sub-branch offices in Canton and Tsingtao. SUZUKI, Teiichi, was one of the organizers of the Board and the head of the political or administrative division. Decisions made by the head office in Tokyo were transmitted to the Branch of "liaison" offices which dealt with the local Chinese authorities in working out methods of implementing decisions made in Tokyo.

Notwithstanding the establishment of the Board, the Japanese Army in China did not forsake matters of administration. Special service organs continued to exist, and army interference was defended as necessary because of military operations.

Among the various matters handled by the Asia Development Board was opium. It studied the opium needs in different parts of China and arranged for the distribution from Mongolia to North, Central and South China. Japan's policy upon narcotics in China is treated elsewhere.

Wang Ching-Wei Departed Chungking

The movement for the establishment of the "New" Central Government in China received an impetus when Wang Ching-Wei left Chungking, China's wartime capital, on 18 December 1938. He was Vice Chairman of the Koumintang Party and Vice Chairman of the National Defense Council. As early as the spring of 1938, Kao Tsung-Wu and Tung Tao-Ning, former officials of the Chinese Foreign Ministry, were brought into touch with Kagesa, Chief of the Chinese Section of the Army General Staff, and were taken to Japan


by an army plane. There, Kagesa had talks with them on reestablishment of peace between China and Japan. It was proposed that some person other than Generalissimo Chiang Kai-shek must be south to promote peace between the two countries and that Wang Ching-Wei would be a suitable person. The conversations were reported to the Army General Staff, which took up the discussions. In the autumn of 1938, an officer of the Army General Staff returned form Shanghai to Tokyo bringing "Tentative Terms of Peace between Japan and China" which had been drawn up by Kao Tsung-Wu and Mei Ssu-Ping. This was brought by ITAGAKI before the Five Ministers' Conference, and amendments made to the "tentative Plan" in accordance with the "Policy for the adjustment of Relations between Japan and China" which had previously been drawn up by the Japanese Government. On 18 November 1938, Kagesa, under orders of ITAGAKI, went to Shanghai to confer with Kao Tsung-Wu and Mei Ssu-Ping. After several amendments were made to the proposed terms, it was arranged that Wang Ching-Wei would leave Chungking according to a pre-arranged plan, upon which the Japanese Government would announce the suggested terms of peace. These arrangements were approved by the Five Ministers' Conference on 25 November 1938, and by the Imperial Conference on 30 November 1938. As stated above, on 18 December 1938, Wang Ching-Wei left Chungking. He reached Hanoi in Indo-China on 20 December 1938. It is to be noted that the date of Wang Ching-Wei's intended departure from Chungking was known to the Japanese Government at least six days previously, as KIDO recorded in his diary on 12 December "it was reported that Wang Chao-Ming (Wang Ching-Wei) on the


18th would escape from Chungking, and for the present it was not good to disclose any political unrest in our country."

Konoye's Three Principles

On 22 December 1938, subsequent to Wang Ching-Wei's "escape" from Chungking, Premier Konoye issued a statement as pre-arranged. The essential points of this statement were as follows: (1) Japan, Manchukuo and China should unite with the establishment of a New Order in East Asia as their common object, and, in order to realize this, China would abandon resistance to Japan and hostility to Manchukuo; 92) Japan considered it essential for the readjustment of Sino-Japanese relations that there be concluded an anti-Comintern agreement between the two countries in consonance with the spirit of the anti-Comintern agreement among Japan, Germany and Italy. In view of the circumstances prevailing in China, Japanese troops should be stationed at specified points. Inner Mongolia should be designated as a special anti-Communist area; (3) Japan did not desire economic monopoly in China or limitation on third powers' interests; but she demanded that China should, in accordance with the principle of equality between the two countries, recognize freedom of residence and trade on the part of Japanese subjects in the interior of China, to promote the economic interest of both, and should extend to Japan facilities for the development of China's natural resources, especially in North China and Inner Mongolia.

As planned, Wang Ching-Wei on 29 December 1938, made a speech in Hanoi in which he declared that the three points in the Konoye Statement were consistent with the spirit


of peace, since the Japanese Government had solemnly declared that she would respect the sovereignty, political independence and territorial integrity of China and would neither aim at an economic monopoly in China nor demand the restriction of third powers' interests in China. He urged that the Chinese Government should, as soon as possible, exchange views for a speedy restoration of peace between the two countries.

Thus was the ground prepared for acceptance of Japanese peace terms by the "New" Government intended to be created by Japan under Wang. By these means, the difficult and embarrassing war with China would be ended, leaving Japan free to pursue its strategic plans elsewhere. At the same time, a complacent Government would be created by Japan, giving the latter complete control of China, both militarily and economically.

Hiranuma Formed a Cabinet

Toward the end of 1938, Premier Konoye contemplated resigning. HIRANUMA was opposed to this because, as he told KIDO, Wang Ching-Wei had left Chungking and the plot was proceeding steadily. Konoye, however, persisted with his resignation, and was succeeded by HIRANUMA on 5 January 1939. ARAKI remained as Education Minister, KIDO accepted the position as Home Minister, and ITAGAKI continued to be War Minister.

Before ITAGAKI agreed to continue, he stipulated on behalf of the Army seven requirements, viz:

  1. With regard to the "China Incident", the aims of the "Holy War:" should be achieved and in accordance with fixed policies, particularly the declaration of 22 December 1938, containing


    the basis of readjustment of the relationship with China, which should be adopted in its entirety;

  1. The plan for national defense should be established and expansion of armament should be the aim in order to cope with the new circumstances in East Asia;

  2. The relations among Japan, Germany and Italy should be strengthened;

  3. The system of national total mobilization should be reinforced and the Planning Board should be expanded and reinforced;

  4. All efforts should be made to increase productivity;

  5. National morale should be stimulated; and

  6. Trade should be promoted.

The first consequence of these demands was the adoption by a Cabinet Conference in January 1939 of the "Outline of the Plan for Expansion of Productive Power" drawn up by the Planning Board. This provided for the establishment of a comprehensive productive power expansion plan for Japan, Manchukuo and China, for the improvement of national defense and basic industries by 1941, in preparation for the "epochal development of our country's destiny in the future." On 21 January 1939, Premier HIRANUMA made a speech before the Diet, in which he said that his cabinet was committed to the same immutable policy as the previous cabinet with regard to the China Affair, and that for those who failed to understand and persisted even in their opposition to Japan, there would be no other alternative than to exterminate them. In the meantime, Japan continued her military operations in China. As has been related, the Hainan Islands were captured on 10 February 1939, and Nanchang, capital of Kiangsi Province, was captured on 26 March 1939.


Wang Ching-Wei Taken to Shanghai

The declarations of 22 and 29 December 1938, made by Konoye and Wang Ching-Wei respectively, were but a prelude to the establishment of a new central government in China. In March 1939, the Five Ministers' Conference in Japan decided to send Kagesa to Hanoi to take Wang to a "safety zone", which was decided upon as Shanghai. He reached Hanoi on 17 April 1939, carrying personal letters to Wang from Foreign Minister Arita, War Minister ITAGAKI, Ko-A-In Division Chief SUZUKI, and Navy Minister Yonai. Wang informed Kagesa that he would launch a movement for peace, with Shanghai as his base. Wang was conveyed by the Japanese with the utmost secrecy from Hanoi to Shanghai, where he arrived on the 8th May 1939.

Wang Ching-Wei Visited Japan

While in Formosa with Wang, on their way to Shanghai, Kagesa reported to the War Ministry in Tokyo that Wang, in view of expected opposition, wished to have himself set up as soon as possible at the place most convenient for his various activities. Later, Kagesa actually set up headquarters for Wang in Shanghai. A Kagesa Agency was developed also to coordinate the work of the Japanese Gendarmerie and Wang's men.

Wang was concerned to ascertain the views of the Japanese Government. Accompanied by Kagesa and other Japanese, he left Shanghai for Tokyo on 31 May 1939. While in Tokyo, he conferred with HIRANUMA, ITAGAKI, Konoye, Arita and Yonai. In his talk with HIRANUMA, soon after his arrival in Tokyo, HIRANUMA told him that his cabinet had inherited the ideas of the Konoye statement and was


firmly adhering to it. On 15 June 1939, Wang had in interview with War Minister ITAGAKI, acting as the proxy of Premier HIRANUMA. ITAGAKI pointed out that Japan could not dissolve the two existing regimes, the Provisional Government and Renovation Government, as those associated with them had been loyal to the plan of peaceful cooperation between Japan and China. He suggested the establishment of a political council in the Provisional Government and an economic council in the renovation Government as the basis of maintaining Sino-Japanese relations locally. Wang was not opposed to this. IKTAGAKI further suggested changing the Chinese national flag, because the Blue Sky and White Sun ensign was regarded as the symbol of anti-Japanism. ITAGAKI also asked Wang's opinion upon the recognition of the independence of Manchukuo, to which the latter answered that, as his aim was peace with Japan, he war firmly convinced that there was no alternative but to recognize Manchukuo.

Decision of the Five Ministers' Conference--June 1939

HIRANUMA says that in his talk with Wang Ching-Wei on the 10th of June 1939, he discussed the future of China and gave it as his opinion that there was no way but to "take the measure which China thought proper"; yet four days before, on 6 June 1939, while Wang Ching-Wei was still in Japan, the Five Ministers' Conference decided on a "Policy for the Establishment of a New Central Government". The Policy, generally speaking was directed to the establishment of a pro-Japanese political system, with a "New" Central Government and a group of constituent local governments -- a form of federal government, "but its details


shall be conformed to the plan of adjusting a new relation between Japan and China". As top the Chungking Government, the plan provided that it could become a constituent element "provided that it change its mind and be reformed". In more detail it said "When the Chungking Government gives up its anti-Japanese and pro-communism policy and accomplished the required personnel changes . . . it shall be made a constituent element of the new central government, concluding (sic) that it has surrendered to us". The policy provided that "the time of establishment and its details shall be settled after consultation with Japan". The decision was reached also that "positive and internal aid necessary for this movement shall be given from the side of Japan". This statement of policy was drawn up because of discussions then taking place with Wang, and set out a series of conditions to be required of him, as well as a "Plan of Guidance of Wang's Movements". A consideration of this policy decision discloses a clear purpose of using Wang in the development of a Japanese-controlled government throughout the entire area of China. This is the fact, although Kagesa in his evidence said the Wang's party submitted a request containing broad principles such as respect for China's sovereignty, non-interference with domestic administration, the providing of Japanese advisers only at China's request, etc., and that these suggestions on the part of the Chinese were "generally admitted".

Cabinet Reshuffled in Japan
and Continued Military Operations in China

Within a period of four and a half months between


the end of August 1939 and the middle of January 1940, there were two cabinet changes in Japan. As a result of the signing of the Russo-German Non-Aggression Pact on 22 August 1939, the HIRANUMA Cabinet, which had been striving for the conclusion of a Tri-Partite Pact with Germany and Italy, submitted its resignation. On 30 August 1939, General Abe formed a new Cabinet. HATA succeeded ITAGAKI as War Minister and MUTO became Chief of the military Affairs Bureau. On 12 September 1939, ITAGAKI was appointed Chief of Staff of the General Headquarters of the China Expeditionary Forces stationed at Nanking, where he continued his intrigues by supporting Wang Ching-Wei's "National Salvation Peace Movement". Military operations in China continued into the interior of China. On 20 July 1939, a "Situation Estimate" was made by the Army in Central China and presented to the Vice-Minister of War and other organs. This stated, among other things, the future plans of the Army in China. It said that the Army had decided that a new central government should be established with Wang Ching-Wei as its head, and should be given positive support in its development.

ON 23 December 1939, Japanese landed in Lungchow in southernmost China. On the next day, they captured Nanning, the capital of Kwangsi Province. At the end of 1939, Japan ordered her air force to bomb the Yunnan railway with a view to disrupting transshipment of war materials to the interior of China form the seaports of French Indo-Chbina. In January 1940, another government change took place in Japan. Premier Abe resigned on 12 January 1940, and was succeeded by Yonai. The general policy of Japan towards China, however, remained unchanged.


Inauguration of the Puppet Central Government

After his return from Japan, Wang Ching-Wei conferred with General Tada, Commander of Japanese Forces in North China, and with the leaders of the Provisional and Renovation Governments in regard to the proposed establishment of a puppet central government. By that time, July 1939, Kagesa had established in Shanghai the Kagesa Agency, which worked with the War, Navy and Foreign Ministries, as well as with the Asia Development Board. This Agency assisted in the establishment of the Central government. A loan of 40 million Yen was advanced to Wang Ching-Wei by Japan for that purpose. From 28 August to 6 September 1939, Wang conducted the "Sixth National Congress", which revised the platform of the Party and adopted as "principles" Japan's proposals, and discussed a Central Political Conference to establish the new Central Government. Thereafter, Wang issued invitations to the Provisional and the renovation Governments to participate in organizing the Central Political Council to create the new government.

In Japan, according to Kagesa, steps were being taken to implement a tentative plan which had been prepared by the Asia Development Board in October, and this was agreed upon by the Japanese Government and Wang Ching-Wei on 30 December 1939. Details retarding the establishment of a new Central Government were also agreed upon by a representative of Wang and Japanese officials in Tokyo. Then in January 1940, representatives of the Provisional and the Renovation Governments, as well as of the Japanese Army met at Tsingtao and decided to amalgamate the existing regimes. On 30 March 1940, Wang's government was formally inaugurated.


Section VI
Greater East Asia Co-Prosperity Sphere

Closely associated with Japan's programme of dominating China on the continent was the idea of establishing a Greater East Asia Co-Prosperity Sphere. This was recognized as being bound to bring her into conflict with the interests of third powers. On 7 July 1939, two years after the outbreak of hostilities at Lukouchiao (Marco Polo Bridge), ITAGAKI and Yonai, War and Navy Ministers respectively of the HIRANUMA Cabinet, were reported in the Japan Times and Mail as stating that the unjust interference of third powers in the execution of Japan's mission of constructing a New Order in East Asia should be stamped out. "All the people in the country", the article continued, "must express their firm determination that Japan will never abandon her aim of making East Asia for East Asiatics. No pains must be spared for the attainment of the goal". On 29 June 1940, Japan's Foreign Minister Arita broadcast a speech reiterating Japan's mission of establishing a New Order in East Asia and her determination "to leave no stone unturned to eradicate activities assisting Chiang Kai-shek". He stated that the countries of East Asia and the regions of the South Seas were closely related to each other and were destined to cooperate and administer each other's need for their common welfare and prosperity, and that the uniting of all those regions under a single sphere on the basis of common existence and stability was a natural conclusion. References were made at conferences of representatives of the Army, Navy and Foreign Office authorities to the possibility of fighting against Great


Britain, the occupation of British colonies, and to Japan's intention that the New Order in the Far East included the South Seas, and in particular, the regions extending from Burma and the Eastern part of India to Australia and New Zealand.

The date of this public declaration of Japan's policy to expand in East Asia and the region of the Pacific Ocean, which was 29 June 1940, is significant. of the countries interested in this sphere, Holland had been overrun by the Germans and her government was in exile. France had surrendered to Germany, Britain was about to face a struggle for her existence. America, if she intervened, would almost certainly face a struggle with Japan, Germany and Italy, a struggle for which her state of rearmament was unfitted. Such an opportunity for Japan to expand at the expense of her neighbors would not easily occur again.

The Second Konoye Cabinet

In the middle of July 1940, the Yonai Cabinet was forced by the Army to resign because, upon the resignation of HATA as War Minister, the Army refused to provide a successor. Konoye was again chosen to form a new Cabinet because, as KIDO said, he was to be "depended upon to settle the China Incident". TOJO became War Minister, while HIRANUMA, SUZUKI, and HOSHINO served as Ministers without portfolios. The new Cabinet was formed on 22 July 1940. Continuing the policy of establishing a Greater East Asia Co-Prosperity Sphere, the new Foreign minister, Matsuoka, declared on 1 August 1940 that the immediate end of Japan's foreign policy was to establish a Great East Asian chain of common prosperity with the Japan-Manchukuo-China


group as the core. On 28 September 1940, the Japanese Government prepared an "Outline of Japanese Foreign Policy" which provided that an effort must be made to realize general peace between Japan and China, and to promote the establishment of the Greater East Asia Co-Prosperity Sphere. Under that plan, in the regions including French Indo-China, Dutch East Indies, Straits Settlement, British Malaya, Thailand, the Philippine Islands, British Borneo and Burma, with Japan, Manchukuo and China as center, Japan should construct a sphere in which politics, economy and culture of these countries and regions would be combined.

Further Military Action by Japan Against China

Although the Government of Wang Ching-Wei was formally installed on 30 March 1940 in Nanking, the Chinese National government at Chungking was still holding out against Japan. In order to bring about the surrender of the Chinese Government, Japanese military operations continued with increasing vigour. On 12 June 1940, Japanese forces captured Ichang, gateway to the Szechuen Province, within which is Chungking. On 30 June 1940, they again captured Kaifeng, which had been recovered by the Chinese. The Japanese Government also insisted upon sending troops to Indo-China in order to disrupt the supply line of the Chinese and to threaten them from the rear. On 14 September 1940, KIDO advised the Emperor to approve the action taken towards that end. After protracted negotiations, which will be discussed later, an agreement was made between the Japanese and French authorities to allow the Japanese troops to occupy northern French Indo-China from 23 September 1940 for operations against China.


Japan Signed a Treaty With Wang Ching-Wei Government

Upon the inauguration of the new government, it was not a professional diplomat, but a soldier, General Abe, Nobuyuki, who was appointed the Japanese Ambassador Extraordinary and Plenipotentiary. This arrangement followed the pattern of Manchukuo, where a soldier, the Commander for the time being of the Kwantung Army, was appointed Japanese Ambassador to the puppet government of Manchukuo. General Abe arrived at Nanking on 23 April 1940, and all preparations were completed for the restoration of Sino-Japanese relations. After protracted negotiations between Wang and Abe, a draft treaty was agreed upon on 28 August 1940 and initialed three days afterwards. After further negotiations and some alterations had been made, a treaty in its final form was settled. Following an Imperial Conference of 13 November 1940, the treaty was submitted to the Privy Council and was approved at its full session on 27 November 1940. It was formally signed on 30 November 1940 at Nanking.

"Treaty Concerning the Basic Relations
Between Japan and China"

The Treaty and associate documents signed 30 November 1940 were ex facie directed to the maintenance of mutual respect and cooperation with each other as good neighbors under their common ideal of establishing a new order in East Asia, and, with this as a nucleus contributing toward the peace of the world in general. The Treaty provided that the two government agreed to eliminate causes prejudicial to amity between the two countries, and to engage in joint defense against communism, for which


purpose Japan should station required forces in specified areas of Menchiang and of North China. The Wang Government agreed to recognize Japan's right to station naval units and vessels in specified areas in China. The Treaty further provided that the two governments should effect close cooperation so as to complement each other and minister to each other's needs in resources in North China and Menchiang, especially materials needed for national defense. To develop resources in other areas, the Wang Government agreed to give positive and full facilities to Japan. The two governments agreed to promote trade and commerce and to extend specially close cooperation for the promotion of trade and commerce in the lower basin of the Yangtze River. Attached to the Treaty were two secret agreements. in the first, it was agreed that diplomacy would be based on concerted action and no measures would be taken with respect to third countries contrary to that principle. The Wang Government also agreed to comply with Japan's demands for military needs in railways, airways, communications and waterways in areas where Japanese troops were stationed. China's administrative and executive rights were to be respected in ordinary times. The second secret agreement allowed Japanese vessels to "freely enter into and anchor at the harbour areas within the territorial jurisdiction of the Republic of China." The Wang Government agreed to cooperate in the planning, development and production of special resources, especially strategic resources, necessary for national defense, in Amoy, Hainan Island and the adjoining islands, and to facilitate the strategic demands of Japan. In a separate letter,


addressed to Abe, Wang promised that so long as Japan was carrying on military operations in China, the latter would cooperate toward the full attainment of Japan's war purpose. On the same day as the Treaty was formally signed, there was published a "Joint Declaration by the Governments of Japan, Manchukuo and China," which provided that the three countries would mutually respect their sovereignty and territories, and would bring about general cooperation as good neighbors, common defense against communistic activities, and economic cooperation. By this treaty and associated secret agreements, Japan secured the right to a voice in China's diplomatic activities, to maintain military and naval forces in China, to use China for strategic purposes, and to use Chinese natural resources for "national defense". In other words, despite the diplomatic protestations in these documents, China was to become at the best a province or satrapy of Japan, and at the worst a country to be exploited to satisfy Japan's military and economic needs.

Intermittent Peace Talks and Continued Military Operations

The signing of the treaty might well be regarded by the Japanese government with satisfaction, as the realization of the policy stated in the Konoye Declaration of 16 January 1938, in so far as the establishment of a new central government and the obtaining of military and other advantages was concerned. At the same time, the problem of how to deal with the Chinese National Government in Chungking, which was holding out, remained unsettled. The attitude of the Japanese Government during this period appeared to be devious or vacillating. Prior to the signing


of the treaty, peace moves had been conducted toward the Chinese Government at Chungking, but they led to no tangible results. Foreign Minister Matsuoka, in an attempt to take these negotiations into his own hands, despatched Tajiri, Matsumoto and others to Hong Kong. These efforts again proved fruitless. Following the signing of the treaty with Wang, the attitude of the Japanese Government toward the Chinese Government at Chungking again stiffened. On 11 December 1940, Abe was given instructions as follows:
The Imperial Government has now recognized the National Government (at Nanking) and had entered into formal diplomatic relations with it. However, in view of the situation that not only is the Incident still going on, but also that we are, at least, going to adapt the state for a long term warfare, you should try to rapidly bring up and strengthen the National Government (in Nanking), in accordance with the established policy of the Empire and the provisions of the new China-Japanese Treaty.

Thereafter, armed operations against Chungking were continued. On 1 March 1941, HATA was again appointed Commander-in-Chief of all Japanese Forces in China. SATO become Secretary of the Manchurian Affairs Bureau on 18 March 1941. SUZUKI was made the President of the Cabinet Planning Board, following an agreement reached among Premier Konoye, KIDO, the War and Navy Ministers. On 21 April 1941, Kunming, the capital of Yunnan Province, which occupied a strategically important position in the rear of Chungking, was bombed, and the United States Consulate building there was badly damaged. Chungking, having previously


suffered damage from Japanese air raids, was again bombed on 9 and 10 May and on 1 June 1941.

Hull-Nomura Talks Relating to China

In the meantime, Ambassador Nomura was conducting negotiations with the American Secretary of State, Cordell Hull, at Washington, over questions affecting world peace, particularly Sino-Japanese relations. These will be discussed more fully later. It is sufficient to mention here that Japan sought (1) to end American assistance to China, (2) the assistance of America to induce Generalissimo Chiang Kai-shek to negotiate peace direct with Japan -- really to accept Japanese terms, (3) the recognition of Manchukuo, and (4) the right to hold China in military subjection through the stationing of Japanese troops there.

On 2 July 1941, another Imperial Conference was held, attended by TOJO, SUZUKI, HIRANUMA and OKA. A summary of Japan's policy in accordance with the current change of situation was adopted at the Conference. Among other things, it included a decision to exercise further pressure "to hasten the surrender of Chiang's regime."

The Third Konoye Cabinet

Foreign Minister Matsuoka was not in full agreement with Premier Konoye in regard to procedure in the negotiation between Japan and the United States. Matsuoka was also in favor of a Japanese attack on Russia, which had now been invaded by Germany, as well as an advance in East Asia and the Pacific, a policy which most of Japan's leaders thought beyond her powers. The Cabinet resigned on 16 July 1941 as a means of getting rid of Matsuoka.

On 18 July 1941, Konoye formed his third Cabinet.


Toyoda replaced Matsuoka as Foreign Minister. The fundamental policy of the Japanese government remained unchanged.

The negotiations between the United States and Japan were continued. On 27 August 1941, Konoye sent a message to President Roosevelt. A Japanese Government statement bearing the same date was also delivered to President Roosevelt. Among other things, the statement said that Japan's measures in-China were intended to accelerate the settlement of the "China Incident." President Roosevelt, in reply reiterated the principles regarded as the foundation upon which relations between nations should properly rest, viz: respect for the territorial integrity and the sovereignty of each and all nations and support of the principle of non-interference in the internal affairs of other countries. Upon receipt of the reply, Konoye called the Cabinet into session on 5 September 1941, which decided to hold an Imperial Conference on 6 September 1941. TOJO, SUZUKI, MUTO and OKA were all present in the Imperial Conference, which, aside from making a decision to break off the negotiations in the middle of October, also set forth the following demands to be made in connection with the "China Incident" in the proposed discussions between Konoye and Roosevelt: (1) the United States and Britain should not interrupt the settlement of the "China Incident" which would be made in accordance with the "Sino-Japanese Basic Treaty" and the Japanese-Manchukuo-China Tri-Partite Joint Declaration; (2) the Burma Road should be closed and the United States and Britain should give Generalissimo Chiang Kai-shek neither military nor economic support. On 22 September 1941, Toyoda delivered to Ambassador Grew a


statement of the terms of peace which Japan proposed to offer China. Those terms were: (1) Neighborly friendship; (2) Respect for sovereignty and territorial integrity; (3) Cooperative defense between Japan and China, for which Japanese troops and naval forces would be stationed in certain areas in China; (4) Withdrawal of Japanese troops upon the settlement of the China Incident, excepting those which came under point 3; (5) Economic cooperation between Japan and China; (6) Fusion of Generalissimo Chiang Kai-shek's Government with Wang Ching-Wei's government; (7) No annexation; (8) No indemnities; (9) Recognition of Manchukuo. These terms, it will be noticed, notwithstanding their well-sounding purposes and having regard to the treaty with Wang's Government, would have given Japan complete dominance of China politically, economically and militarily.

In his discussion of the situation with Premier Konoye on 9 October 1941, KIDO stated that although it would be inadvisable to make war on the United States immediately, Japan should prepare for military action for the completion of the "China Incident" which might last for ten or fifteen years, and to apply the whole of Japan's military force in China to realize Japan's plans against Kunming and Chungking. On 12 October 1941, the Cabinet reached an agreement, upon the insistence of War Minister TOJO, that Japan should not waver in her policy of stationing troops in China or


other policies connected with China, and that nothing be done which might prejudice the result of the China Incident. This meant, in other words, in no circumstances should Japan yield up any of the many material benefits already gained or in prospect in China. On 14 October 1941, prior to the Cabinet Meeting, Konoye spoke to TOJO and urged further consideration upon the opening of hostilities between Japan and the United States, and the bringing to an end of the China Incident. TOJO, as before, opposed any concession to the United States in the matter of withdrawal of troops from China, and said Konoye was too pessimistic. In the Cabinet meeting held that day, TOJO was insistent upon his view and brought about a complete deadlock. Konoye resigned on 16 October 1941.

Tojo Formed a Cabinet

After the resignation of Konoye, TOJO became Premier upon the recommendation of KIDO. HIROTA also gave his specific approval to the recommendation. In the new Cabinet, TOJO was also War Minister and Home Minister. TOGO became Foreign Minister and concurrently Minister of Overseas Affairs, while KAYA became Finance Minister. SUZUKI was Chief Director of the Asia Development Board and concurrently President of the Planning Board. SHIMADA became Navy Minister, while HOSHINO was designated Chief Secretary of the Cabinet. As before, the Premier served as President of the Asia Development Board, with the Army, Navy , Foreign and Finance Ministers, as Vice Presidents.

Continuance of United States-Japan Parleys

After the new TOJO Cabinet came into office, the Japanese Government continued diplomatic discussions


with the United States Government, but, while appearing to be urgent for a decision, it showed no willingness to make any real modification of its attitude concerning China. On 4 November 1941, TOGO informed Nomura that Kurusu was being despatched to assist him in the parleys. On the same day, TOGO sent to Nomura another message giving the terms to be presented to the United States Government, including those relating to the stationing of Japanese troops in China. Japan still insisted that it should station troops in China, in the Mongolian border region and on the island of Hainan, even after the establishment of peace between Japan and China, and that these would not be evacuated until the lapse of an indefinite period, which if necessary might be interpreted as 25 years. These terms were subsequently approved by the Imperial Conference held on 5 November 1941, at which TOJO, TOGO, SHIMADA, KAYA, SUZUKI, HOSHINO, MUTO and OKA were present. Nomura was promptly notified of the approval.

Continued Military Campaign in China

The outbreak of the Pacific War did not abate Japan's military operations in China, nor alter the decision to crush the Chinese National Government at Chungking. Even before the outbreak of the Pacific War, casualties and losses suffered by China had assumed tremendous proportions. Up to June 1941, figures of the Japanese showed that the Chinese armed forces had lost 3,800,000 men killed, wounded and captured; that the Japanese had captured form the Chinese an enormous amount of booty; that they had destroyed 1,77 Chinese planes; and that the Japanese had themselves lost 109,250 men killed and 203 planes.


In May 1942, the Japanese took Lungling and Tengchung in Yunnan Province, in the rear of Chungking. In December 1943, they captured Changthe in Hunnan Province, although it was soon recaptured by the Chinese. By the middle of 1944, military operations were intensified in the interior of Central China. Chengchow fell on 20 April 1944, Loyang on 25 May 1944, Changsha on 18 June 1944 and Hengyang on 8 August 1944. Then in the winter of the same year, the Japanese made a further thrust into the strategic southwestern China. They captured Kweilin on 10 November 1944, and Liuchow on 11 November 1944. At the close of the war, the official records of the Chinese Army showed that the army alone lost from 7 July 1937 to August 1945, 3,207,948 men killed, wounded and missing. We were not given figures of non-combatants killed or maimed in the course of the war, although there must have been very considerable civilian casualties.


Section VII
Japan's Economic Domination of Manchuria
and Other Parts of China

The case made against the accused is of waging aggressive war, with the object, inter alia, of obtaining economic domination of Manchuria and other parts of China. It becomes necessary, therefore, that we should discuss shortly the evidence presented upon this subject. As already related, the Japanese policy in Manchuria was to consolidate the territory under a government subservient to Japan, and then by means of agreements with that government, and by other means, to obtain much needed basic materials required to carry out the program adopted in Japan, and to obtain control of the communications and a substantial part of industry and commerce, all of which were of great value to later military operations.

In North China, the same plan was followed for the same purposes, and particularly to fill the demand for supplies which at the time were not obtainable in foreign markets and which were badly needed in the campaign against the whole of China, and were necessary to facilitate the over-all plan. The same policy was adopted as the war progressed into Central and Southern China. The political domination has already been dealt with; the following account of the various measures adopted indicates the extent to which the policy of economic domination was carried out.

General Economic Matters

The Japanese policy toward China has been dealt with at an earlier point in this judgment in relation to the political policy. Most of the "Plans and


Policies" there referred to also deal with economic matters. Therefore, at this step we mention only a few decisions which are particularly applicable to the question of economic domination.

Typical of the policy was the adoption by the HIROTA Cabinet, on the 11th of August 1936, of "The Second Administrative Policy Toward North China," the main purpose of which was "To Assist the people in North China in procuring perfect independence and to set up an anti-communistic and pro-Japanese and pro-Manchurian area and to secure the necessary materials for our National defense as well as to improve the facilities of the transportation against the possible invasion of Soviet Russia, and by making North China the base for the cooperation of Japan, Manchuria, and China as well as for mutual aid." It was then provided that Japan should guide the local political powers to insure the independence of North China. It was finally provided that "iron, coal and salt existing in the province should be utilized for our national defense and for the promotion of our transportation facilities and electric power."

On the 20th of February 1937, the Hayashi Cabinet adopted the "Third Administrative Policy Toward North China", the principle objects of which were procuring defense materials, improving transportation, preparing the defense against USSR, and establishing cooperation between Japan, Manchukuo and China. On the 10th of June 1937, the War Ministry under the first Konoye Cabinet prepared a "Resume of Policy regarding the execution of summary of five year program of important


industries" which, as we have mentioned previously, was declared to be based upon a "policy fro the establishment of a comprehensive plan for Japan, Manchukuo, and China in order to prepare for the epochal development of Japan's destiny in the future." The plan also recites that it "aims at the establishment of self-sufficiency in regard to important resources within the sphere of our influence and thereby avoid depending upon the resources of a third power." On the 24th December 1937, the Cabinet decided the "Outline of Measures of the China Incident" which contained a section entitled "Policy for Economic Development." That section provided that its object was the economic development of North China to coordinate Japanese and Manchurian economy and to establish co-prosperity and coalition between Japan, Manchukuo and China. For that purpose, it was considered necessary to develop and adjust every phase of economics by closely combining Chinese capital with Japanese capital, thereby contributing to the development and increase of production of necessary materials for the national defense of Japan and Manchukuo.

In order to vie effect to the plans and policy last mentioned, and to coordinate the Japanese efforts in that regard, provision was made in April 1938 for the creation of two national policy companies. These were the North China Development Company for North China and the Central China Promotion Company for Central China. The objects of the North China Development Company were to further economic development and to consolidate various undertakings in North China. Its operations were carried on as a holding company


financing and controlling leading enterprises in transportation, harbor and port developments, electric power generation and transmission, mining, production and sale of salt and allied undertakings.

It operated under the supervision of the Japanese Government and was subject to the orders of the government; in fact, except in routine matters, it required the approval of the government for all its decisions. For example, the approval of the Japanese Government was required for the raising of loans, making changes in its articles of association, giving effect to mergers and dissolutions and distribution of profits. Its plans for investment and financing for each fiscal year also required the approval of the Government.

UMEZU was appointed a member of the company's organizing committee with OKA as an assistant. KAYA served as president of the company for some time, going out of office on the 10th of October 1941, when he became Finance Minister in the TOJO Cabinet.

The Central China Promotion Company had objects very similar to those of the North China Development Company, and was subject to substantially the same control by the government. The operations in the development of public utilities, transportation, and natural resources, which will shortly be referred to, came under the control of one or the other of these companies.

Before dealing with the particular operations, reference should be made to the "Program for the Economic Development of China" adopted by the Planning Board in January 1939. It was stated in this program


that the development of natural resources in China had far-reaching consequences in realizing the ideas of economic collaboration between Japan, China and Manchukuo as the basic step for establishing a new order in East Asia. It was further stated that these activities were "as vital and urgent as military operations and political activities and that they should be carried out even during hostilities."

Reference should also be made to the "Summary of the Program for Economic Construction Embracing Japan, Manchukuo and China" put out by the Cabinet Information Bureau on the 5th of November 1940, the principal purpose of which was the establishment of a self-supporting and self-sufficient economic structure within ten years to strengthen the position of East Asia in World Economy. Under the program, Japan's function was to promote science and techniques and to develop heavy industry, the chemical industry and mining. Manchukuo was to develop important basic industries, and China her natural resources, particularly mining and the salt industry.

Not only was no provision made in this program for consulting Manchukuo or China with regard to its operation, but reading the document as a whole, it is made clear that decisions as to its being put into effect in all its aspects were to be made by Japan and Japan alone.

Significant of the purposes of the Japanese plans in North China is a statement by KAYA that the plan for mobilization of materials in North China had three main points; the first was to supply Japan with war materials; the second was to expand Japan's armaments; and


the third was to meet the needs of peace-time economy.

Particular Industries

The foregoing gives an outline of the general plans and policies adopted by the Japanese Government. A short outline of how the general plans were applied to particular industries and special phases of economics will be of value at this point.

Transportation and Communications

In 1935, when DOHIHARA was active in connection with the establishment of autonomous rule in North China, he demanded the construction of a railway between Tientsin and Shihchiachuan. Reference has already been made to the railway plan drafted by the North China Garrison Force in November 1935 which indicated Japan's desire or intention to acquire the Shantung Railway and a section of the Lunghai Railway and to construct further new railways in China.

In July 1938, the North China Telephone and Telegraph Company was organized, the North China Development Company owning more than 70% of its capital stock. Its objects were to construct and operate telegraph and telephone service, including submarine cable in North China and connecting with Japan, Manchukuo, and the rest of the world. Other subsidiary companies of the North Chine Development Company were the North China Communications Company and the North China Aviation Corporation. The North China Communications Company operated 3,750 miles of railways, 6,250 miles of bus lines, and 625 miles of inland waterway communications in North China.


Natural Resources

By "The Outline of Measures for the China Incident" of December 1937, provision was made for a National Policy Company to take over the salt industries and practically the whole mining industry in North China for the purpose of obtaining revenue for Japan.

The Central Iron Mine Company, a subsidiary of the Central China Promotion Company, was set up in April 1938 to develop the estimated one hundred million tons of coal in Central China.

Deposits of iron ore in North China estimated at approximately two hundred million tons, or more than half of China's estimated iron ore deposits, were taken over in July 1939 by the Lungyen Iron Mine Company, a subsidiary of the North China Development Company. Of the mines coming under the control of this company, the one having the largest estimated deposits of all was the Lungyen Mine in Chahar Province. Part of the ore from this mine, and the surplus of pig iron produced therefrom, were exported to Japan. Of a total production of 4,300,000 tons of ore mined by the company, 700,000 tons were used for the production of pig iron, and of the balance, 1,400,000 tons were sent to Manchuria and over a million tons to Japan.

In Central China, iron deposits in the Yangtze Valley were estimated at one hundred million tons. For the purpose of continuing the development of this deposit, the Central China Iron Mine Company was established in April 1938. The company was controlled by the Central China Promotion Company and other Japanese interests; payment for Chinese interests in the property was


arranged to be made in the form of equipment and goods.

Coal deposits in North China were enormous, and estimated to be more than 50% of the deposits in the whole of China. In developing these coal resources, the Japanese adopted a policy of


controlling the supply to the Chinese in order to insure a further supply for Japan, having particular regard for the need of coking coal. The Tatung Mine, which had the largest annual production, was taken over and operated by the Tatung Coal Mine Company, a subsidiary of the North China Development Company.

By 1938, the greater part of the salt consumed in Japan was imported from various countries in the East and Middle East, including China. In order to increase the supply from China, the North China Salt Company was organized as a subsidiary of the North China Development Company for the production of salt in North China. For the same purpose in Central China, the Hua Chung Salt Company was organized by the Central China Promotion Company in August 1939, and plans were made to develop new salt fields by investment of the funds of the holding company.

Public Utilities

Immediately after the occupation of Shanghai in December 1937, the Japanese took over various public utility companies, among which might be mentioned: (a) Puntung Electric Supply Company, which was then made a subsidiary of the Central China Water and Electricity Company, which in turn was Japanese controlled; 9b) the Chinese Electric Power Company in Shanghai was taken over in June 1938 and became a subsidiary of the same holding company. In these cases, the owners of the companies were compensated at a valuation considerably below the real worth of the companies.

The Chapei Water and Electricity Company was taken over, and after the outbreak of the Pacific War,


the American-owned Shanghai Power Company was also taken over. Evidence was made before the Tribunal that after the surrender in 1945, when the various plants were taken back by the former owners, the plant equipment and machinery had deteriorated far beyond ordinary wear and tear.


From the beginning of the occupation of North China, the Japanese Army circulated in North China bank notes of the Bank of Chosen, and in Central China, bank notes of the Bank of Japan, together with some military or occupation yen notes. However, the use of Japanese currency in occupied territories was disturbing to Japan's monetary system. In order to remedy this situation, the Japanese Government organized the Federal Reserve Bank of China in February 1938, the main policy of which was to stabilize currency and control the money market in foreign exchange. It was authorized to issue paper currency which was linked to the Japanese yen, and so made the basis for Japanese investments in North China. Controlled by the Japanese Government, this bank became very important and carried out Japan's policy in the financial field of its operations.

As a result of the Japanese virtual control of the economics of occupied China, and its control of a substantial part of industry and commerce, many Japanese businessmen and industrialists went to China and entered the economic life, making no effort to hide their control.

Protests of the United States

The adoption of the measures just referred to


inevitably had the result of affecting the trade and commerce of other powers. Consequently, on the 6th of October 1938, United States Ambassador Grew wrote to Prime Minister Konoye that the events in Manchuria were being repeated; that the exchange control in North China was discriminatory, and that with the alteration of customs tariffs, the Japanese control of transportation and communications, and the proposal to create a monopoly in wool and tobacco, was putting Japan and Japanese merchants in a preferred position in China. He consequently asked for discontinuance of (1) exchange control and other measures discriminatory to American trade and enterprise; (2) monopolies or preferences conferred on Japanese interests, superiority of rights in commerce or the economic development in China and (3) interference with American property and rights, particularly censorship of mail and restrictions upon residence and travel by Americans and American trade and interests. To this protest, the Foreign Minister, while admitting the truth of the charges, claimed justification for the economic measures as being for the benefit of China and East Asia.

Narcotics in China

Reference has already been made to the traffic in narcotic drugs in Manchuria.

A policy similar to that adopted in Manchuria was adopted form time to time as military operations succeeded in North, Central, and Southern China. This traffic is related to the military operations and political developments in that, by means of it, substantial funds were obtained for the various local governments


set up by the Japanese, funds which would otherwise have to be furnished by Japan or found by additional local taxes. Incidentally, the effect on the morale of the Chinese population by the tremendous increase of drug addicts can be well imagined.

Prior to the outbreak of the China War, the Chinese Government had been making determined efforts to wipe out opium smoking. that these efforts were meeting with success is demonstrated by a report made by the Advisory Committee of the League of Nations in June 1939 to the effect that the measures taken by the Chinese Government for the suppression of drug addiction under regulations promulgated in June 1936, had produced highly satisfactory results.

Connected with the opium traffic in China from 1937, were the Japanese Army, the Japanese Foreign Office, and the Asia Development Board. The Mitsubishi Trading Company and the Mitsui Bussan Kaisha were making large purchases of Iranian opium for Japan, Manchukuo and China. By arrangement with the Foreign Ministry, the two companies in March 1938 made an agreement in respect to the places form which the opium was to be imported and their respective shares in the business. The distribution of opium for Japan and Manchukuo was to be handled by the Mitsubishi Company, and that for Central and South China by the Mitsui Company; the distribution for North China being shared equally, and the government offices of Japan, Manchukuo, and China were to decide upon and inform the two companies of the amount to be purchased for each year. At the request of the Asia Development Board, the


agreement was revised by providing for the organization of the Iranian Opium Purchasing Association, the opium business of that company to be divided equally between the two trading companies.

The Special Service Organizations established in cities and town under the China Expeditionary Force were entrusted with the sale of the opium. The Economic Division of the Asia Development Board stated the requirements of opium in North, Central and South China and arranged for its distribution. Profits from the sales of opium were transferred to the Asia Development Board. At a later date, a General Opium Suppression Bureau was created, and the opium trade was administered by the Renovation Government, which was to a certain extent supported by the profits from the sale of opium. But even at that time, the Ko-A-In and the Japanese Army Headquarters in Central China were still responsible for policy making with regard to the opium trade.

From time to time, measures were adopted ostensibly to control or reduce the traffic. One example was the General Opium Suppression Bureau, which as organized in 1938 and at about the same time the Renovation Government set aside $2000 a month for opium suppression propaganda. Notwithstanding these and other measures adopted, the traffic continued to increase. The explanation may be found in the cryptic evidence of Harada, Kumakichi, Japanese Military Attaché at Shanghai from 1937 to 1939. He say, "When I was head of the Tokumu Bu I received instructions through military channels to provide opium for the


Chinese people by establishing an opium suppression board."

In June 1937, at a meeting of the Advisory Committee on Traffic Opium of the League of Nations, it was stated openly that the increase in illicit traffic in China coincided with the Japanese advances.

Inner Mongolia

Following the withdrawal of Chinese troops from North Chahar after the Ching-DOHIHARA Agreement of 1935, as already related, Japanese influence was felt in the provinces of Chahar and Suiyuan. thereafter, the farmers were encouraged to raise more opium. As a result, production of opium was substantially increased.

North China

In North China, particularly in Hopeh and Shantung, after the Tangku Truce of 1933, and the establishment of the demilitarized zone, the Chinese were unable to control the drug traffic. There then followed a tremendous increase in the number of drug addicts, the distribution of the drugs being handled by various companies and associations controlled by Japanese.

After the occupation of Tientsin in 1937, there was a notable increase in the use of narcotics. The Japanese concession in Tientsin became known as the center of heroin manufacturing. Not less than two hundred heroin factories were established in the Japanese concession, and it was stated before the League of Nations Advisory Committee on Traffic in Opium in


May 1937, that it was common knowledge that almost 90% of all illicit white drugs in the world were of Japanese origin manufactured in Tientsin, Dairen and the other cities of Manchuria and North China.

Central China

Here again, substantially the same story is told. In Nanking, opium consumption had been practically wiped out before 1937. After the occupation by the Japanese troops, the trade in narcotics became public and was even advertised in newspapers. As was established in an earlier part of this chapter, the profits made in the drug traffic monopoly were enormous. By the autumn of 1939, the monthly revenue from the sale of opium in Nanking was estimated at $3,000,000. It is therefore obvious, having regard to the magnitude of the traffic in Manchuria, North, Central, and South China, how valuable the traffic was to the Japanese Government even if taken only in terms of revenue.

We do not consider it necessary to vie any further details of the traffic in drugs; it is sufficient to say that in Shanghai, in Fukien Province, and Kwantung Province in South China and elsewhere after 1937, upon occupation of each province and large center by the Japanese, the traffic in drugs increased on a scale corresponding to that in other parts of the country which has already been described.


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