I. B. 112

                                                       AUGUST 16, 1941.
Memorandum for the Chief of Staff:
Subject: Developments in the Far Eastern Situation.

1. It is believed that the Japanese Government, with the sanction of the Emperor, has decided upon a foreign policy whose objectives are as follows:

a. Adherence to Tripartite Pact.

b. Establishment of a Greater East Asia sphere of co-prosperity (under Japanese domination and control) regardless of other developments in the world situation.

c. Disposal of the China Incident.

d. Expansion southward for reasons of economic and strategic security.

2. In implementing the foregoing policy, it is believed that Japan proposes to take steps as follows:

a. Increased pressure on China from various points in the south.

b. Seizure by Japan of all Foreign Concessions in China.

c. Politico-military pressure on Indo-China and Thailand to facilitate Japan's southward advance.

d. Preparation for an attack on Siberia, but to be made at her own chosen time.

e. A resort to every means available to keep the United States out of the war.

3. Since the adoption of the policy outlined in paragraph 1 above Japan has secured military and economic control of Indo-China, is in a position to enforce her military and economic demands oh Thailand and to threaten the vital Burma railroad and road, and has increased the strength of the Kwantung

Page 1347

Army (in Manchoukuo) to about 600,000 officers and men as opposed to a Russian force, east of Lake Baikal, of about 400,000. The following factors, however, unfavorable to the successful implementation of Japan's aggressive policy, have been injected into the situation:

a. The German time-table for the subjugation of the U. S. S. R. has gone awry.

b. The United States and Great Britain have frozen Japanese assets.

c. Great Britain has announced an embargo in exports to Japan.

d. The American British and Dutch armed forces in the southwestern Pacific have been materially strengthened.

e. Great Britain and the United States have pledged aid to the U. S. S. R. and additional aid to China.

f. The President of the United States and the Prime Minister of Great Britain have announced accord on an eight point program which, while not mentioning Japan by name, presents a long-range threat to her position as an Axis Power and to the retention of her conquests.

4. The great danger in the situation lies in the fact, so often proved, that Japanese military and naval authorities are not under the complete control of their Government. We have seen for the past year an extraordinary example of discipline and self control exercised by the German military in conformity to their Government's decree of avoiding any possible armed clash with the United States. We can, unfortunately, expect no such self denial and restraint on the part of the Japanese military. We can only hope that they will at least follow for a time the policies of their Government.

5. There are clear indications that, in spite of the decisions outlined in Paragraphs 1 and 2 above, the Japanese Government is willing to take extraordinary diplomatic measures to keep the United States out of the war, at least temporarily. There are indications that Japan is unwilling to commit herself to the extent that Germany would like to see her committed. There are indications that Japan realizes that she must make some concessions to the strong political stand now taken by the United States, even though those concessions consist largely in further conversations and negotiations.

6. Considering all of the above, this Division believes that forceful diplomacy vis-a-vis Japan, including the application of ever increasing military and economic pressure on our part, offers the best chance of gaining time, the best possibility of preventing the spread Of hostilities in the Pacific area and of the eventual disruption of the Tripartite Pact. The exercise of increasingly strong "power diplomacy" by the United States is clearly indicated.

                                                SHERMAN MILES
                                         Brigadier General U. S. Army
                                   Acting Assistant Chief of Staff, G-2.
   The President                    War Plans Division 
   Secretary of War                 Office of Naval Intelligence 
   Assistant Secretary of War       General Embick. 
   Chief of Staff