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216. On the 15th June a further statement was made by Mr. Kawai at Hsinking to the effect that the new régime in China would eventually take back the foreign settlements and concessions, which were described as anachronistic.
217. On the 25th June the press reported that a petition signed by four leading reactionaries, including Mr. Toyama and Mr. Honda, had been formally presented to the Emperor, advocating the exercise by Japan of belligerent rights in order to put a stop to assistance to Chiang Kai-shek and to deal effectively with the problem of the concessions.
Military Operations.
218. On the 21st June Japanese troops landed in the neighbourhood of Swatow, and were able to capture the city without resistance on the part of the Chinese. On the same day the Minister for Foreign Affairs addressed an identic note to foreign representatives in Tokyo, stating that purely military operations were being undertaken against the Kwangtung coast, and requesting the co-operation of foreign authorities in China with the Japanese army in order to prevent or minimise accidental damage to the rights and interests of third Powers. The Japanese naval authorities at the same time requested foreign warships not to enter the harbour of Swatow, and expressed considerable indignation when this request was disregarded by a British destroyer. On the 28th June a further Japanese landing was made on island lying off Foochow and Wenchow by way of prelude to an attack on these ports.
Japanese Air Activities.
219. On the 9th June Chungking was raided for the fifth time by Japanese naval aircraft. Further attacks on Chungking and also on Chengtu were made on the 11th June. Considerable damage was reported in the Japanese press, but foreign property does not appear to have been affected.
Kulangsu.
220. On the 10th June the United States Chargé d'Affaires expressed to the Vice-Minister for Foreign Affairs apprehension at the continuance of unsettled conditions at Kulangsu, and objected to the Japanese method, which seemed to be to meet all suggested terms for settlement with renewed threats of force. Mr. Dooman further stated on the 13th June that the United States authorities would be prepared to accept a reasonable local solution preserving the complete integrity of the settlement, but were not prepared to give in to threats. Representations on the same subject were made on the 15th and 16th June by the counsellors of the British and French Embassies respectively. The United States Chargé d'Affaires made representations against the blockade of Kulangsu on the 19th June, and the counsellor of His Majesty's Embassy spoke in a similar sense at the Ministry for Foreign Affairs on the following day. Further semi-official representations were made on the 23rd June by the United States Chargé d'Affaires, who raised the question of interference with fuel and food supplies. and asked for a statement indicating the full scope of the facilities which, according to the Japanese Consul-General at Amoy, would be provided for the maintenance of such supplies.
Views of Mr. Nakano Seigo.
221. On the 14th June a meeting arranged by the Tohokai was addressed by Mr. Nakano Seigo, leader of the group, who has of late been assiduously He has set himself up cultivating the poorly educated lower middle class. amongst this class as a
Japanese Hitler," and there were cries of "Hitler! when he ascended the platform.
222. Mr. Nakano's speech consisted largely of a truculent attack on Great Britain and the settlements in China. He maintained that by comparison with British actions in China in the past Japan's present activities were the height of moderation. It was not enough to blockade the settlements; they should be wiped out, an aim which Japan could easily achieve without having any repercussions to fear. Japan should follow the example of Franco's Spain and use submarines of unknown nationality to sink British and French trading vessels now supplying ammunition and war material to the Chinese Government. If the United States were to cease supplying oil and scrap iron to Japan, the latter
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would immediately seize the British and Netherlands possessions in the Far East, where oil and iron were available. Japan should follow the example of Germany. which, without the loss of a single soldier, had taken Austria, the Czech States and Memel. If Japan had sufficient determination she could take all the possessions of Britain and France in the Far East without even going to war.
U.S.S.R.
223. The Kwantung Army announced on the 2nd June that the Japanese had lost eleven officers and 114 men during the skirmishes with Outer Mongolian troops at Nomonhan (see Political Diary for May, paragraph 180). There was further fighting near Changlingtse, north of Chankufeng, on the 3rd June, in which, according to Japanese sources, Soviet troops were repulsed after crossing the Manchurian frontier. On the same day the Manchukuo authorities protested to the Soviet Government through the latter's consul-general at Harbin regarding the recent alleged violations of the frontier. Conflicts on a larger scale took place between the 22nd and 27th June, accompanied by considerable aerial battles with heavy casualties claimed by each side. There was a temporary lull at the end of the month, but every indication that hostilities would shortly be resumed. 224. On the 16th June the Soviet and Chinese Governments signed in Moscow a new trade agreement, which, according to press reports, contained a most-favoured-nation clause, together with provisions about the legal status of the trade representatives of each Government in the territory of the other.
225. On the 19th June the Vice-Minister for Foreign Affairs invited the Soviet Chargé d'Affaires to call and discuss with him various outstanding fishery questions. No settlement of these disputes had, however, been reached by the end of the month.
226. On the 29th June it was announced that the Soviet Chargé d'Affaires had been recalled and would shortly leave for Moscow.
General.
227. It was announced on the 6th June that Mr. Kojiro Inoue and Mr. Kikuji Yonezawa had been appointed ministers to Hungary and Portugal respectively.
228. The Enquiry Committee of the Privy Council approved on the 26th June a proposal to establish Japanese Legations in Iraq and Bulgaria.
Position of the Government.
INTERNAL AFFAIRS.
229. The rumours of an impending change in the Government. to which reference has been made, have now subsided, though the Government continue to come in for a certain amount of criticism for their failure to produce concrete measures to cope with domestic difficulties, such as rising prices.
Change in Organisation of Ministry of Commerce and Industry.
230. Plans are under consideration for the reorganisation of the Ministry and for the creation of a new organ for the supervision of foreign trade, some- thing on the lines of our Department of Overseas Trade. The acting commercial counsellor is informed, however, by the Vice-Minister, Mr. Mukase, that the project is meeting with some opposition from the Ministry of Finance and the Ministry of Agriculture and Forestry, and may not materialise.
The Seiyukai.
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231. In spite of the fact that Mr. Kuhara was duly elected as official president of the Seiyukai in May, the difficulties to which the election of the president had given rise did not thereby come to an end. The
reformist group with Mr. Nakajima as their rival president continued to repudiate Mr. Kuhara's appointment and recently scored a minor triumph by inducing Mr. Yamazaki, a former Minister of Agriculture and Forestry who was one of the leaders of the now defunct Showakai, to join them. It is believed that several other members of the Showakai will also join the faction and this may indicate that the faction will separate themselves entirely from the Seiyukai and form a fresh party.
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