97
4
out similar heavy air raids any number of times to wreck Chengtu, Kweilin, Kunming and all other cities still held by General Chiang Kai-shek, until he was left without any city to which he could flee.
Central China Bank.
176. The commercial counsellor to His Majesty's Embassy was informed on the 1st May at the Ministry for Foreign Affairs that the Central China Bank, the establishment of which at Shanghai was formally announced on that day, was not intended to constitute an attack on the Chinese national currency, which its notes would supplement but not replace; there would be no trade or exchange control or other measures of compulsion regarding the acceptance of the bank's notes. The same subject was raised by His Majesty's Ambassador with the Minister for Foreign Affairs on the 8th May, when Sir Robert Craigie explained that His Majesty's Government must regard the bank's establishment as potentially detrimental not only to the stability of the Chinese currency but to the economic structure of China; he accordingly requested an official reply to certain enquiries which he wished to make on the subject. On the 11th May an assurance was received from the Asia Development Board repeating the explana- tion already given to the commercial counsellor at the Ministry for Foreign Affairs. The reply to the enquiry made by His Majesty's Ambassador, which was received on the 17th May. amplified these assurances by providing detailed information regarding the scope of the new bank. On the following day the question was taken up by the French Ambassador, who requested similar assurances to those which had already been asked for by His Majesty's Ambassador.
Shanghai.
177. On the 3rd May the Vice-Minister for Foreign Affairs addressed to His Majesty's Ambassador and to the United States Ambassador a long state- ment, which was subsequently published, regarding the need for changes in the constitution of the Shanghai Municipal Council and of the district court if satisfactory arrangements were to be made for the suppression of terrorism and the avoidance of friction between the council and the Japanese authorities. In reply to these representations, the United States Ambassador stated on the 13th May that his Government could not discuss the proposed changes at present in view of the abnormal situation existing in the settlement at Shanghai. At the same time, Mr. Grew drew Mr. Arita's attention to certain press reports and stated that he would regard the usurpation by any Power of the rights and duties of the duly constituted authorities of the settlement as a deliberate impairment of United States rights. In reply, the Minister for Foreign Affairs stated categorically that Japan had no intention whatsoever of occupying the International Settlement. On the 19th May His Majesty's Ambassador spoke to the Vice-Minister for Foreign Affairs on the same lines and the French Ambassador made similar representations on the 22nd May.
178. At the same time, the Shanghai Municipal Council showed their willingness to go as far as possible to meet the Japanese attitude by publishing on the 12th May a joint declaration, signed also by the French Concession authorities, stressing the absolute neutrality of the areas under their control and prohibiting all political activities in them.
Kulangsu
179. On the 12th May Japanese naval forces were landed in the Inter- national Settlement on the island of Kulangsu, opposite Amoy, to seek the assassins of the pro-Japanese president of the Amoy Chamber of Commerce. Mr. Hung Li Hsiun. In reply to a protest which he made on the 16th May against this landing, His Majesty's Ambassador was informed that the landing was an emergency measure taken to suppress anti-Japanese acts of assassination, but that the landing party had largely realised their aim and were already effecting a gradual withdrawal. Sir Robert Craigie's representations were supported by the United States and French Ambassadors on the 17th and 19th May respectively. Meanwhile, the three interested Powers had concentrated warships at Amoy, and on the 17th May British and American naval contingents, each equal in size to the Japanese naval forces already in the settlement, were landed at Kulangsu under the command of the Commander-in-chief, China; a
5
French contingent of the same strength followed very shortly afterwards. Japanese naval authorities retaliated on the 24th May by issuing an order that no ships of third nations should pass between the island and the mainland without receiving permission from themselves, the object of this measure being to constitute a blockade of the International Settlement, at any rate so far as concerned traffic in junks. On the 26th May His Majesty's Ambassador in China arrived and spent a few days, before proceeding to Shanghai, in assisting in the discussions proceeding between the consular representatives of the four Powers concerned for measures to be taken to ensure the elimination of terrorism from the settlement. Agreement had not yet been reached by the end of the month. U.S.S.R.
180. In a communiqué published on the 29th May the Japanese Kwangtung army referred to a series of clashes which had been proceeding for several days between Outer Mongolian troops and Japanese and Manchukuo forces in the neighbourhood of Nomonhan, and stated that fifty-nine hostile aircraft had been brought down during rather more than a week. The Japanese press universally ascribed these skirmishes to the instigation of the U.S.S.R.
General: Japanese Policy.
}}
181. In statements issued on the 5th and again on the 22nd May the Prime Minister, Baron Hiranuma, emphasised that Japanese diplomacy is, as always, based on
'morality rather than selfish interests, and that its mission in inter- national affairs is to indoctrinate other nations with the same idea. A grasping policy might be pursued for a short period of ten or twenty years, but retribution would come swiftly and surely. No nation should be influenced by consideration of its own interests alone, lest it stray from the right path. Japan must check those countries attempting to disturb the peace of the world and join hands with those nations which shared her task. The China incident had not been aggression, but it meant that the national destiny of present and future generations was bound up in future course of events in China. The objective of Japan's guiding political principles was the realisation of the justice of Heaven and Earth and the expression of the Divine Will.
Position of the Government.
HOME AFFAIRS.
182. In spite of a good deal of criticism for their failure to announce concrete details regarding their policy cis-à-vis Europe and regarding the expected new measures for dealing with the China incident, the position of the Government still seems fairly secure, if only for the reason that there is no suitable candidate for the post of Prime Minister if Baron Hiranuma were to resign. The annual conference of prefectural Governors, which of late years has grown in importance as giving the Government an opportunity of explaining their policies in a more informal and less constrained atmosphere than that of the Diet, was held during the first week of May. The Prime Minister's opening speech was merely a rehash of his address at the opening of the Diet, and this together with the vagueness of the addresses by the other ministers, led to attacks both by the press and by the Governors themselves. In view of the sharp divergence of opinion known to exist among the members of the Cabinet regarding the strengthening of the Anti-Comintern Pact, there was reason to believe that a Cabinet crisis was imminent, but a series of conferences of the "key" ministers was followed by the announcement on the 21st May that a final decision in regard to policy vis-à-vis Europe had been made and submitted to the throne. Statements about the nature of the decision were sufficiently vague to raise the hopes both of those who advocated and of those who opposed the strengthening of the Anti- Comintern Pact, and in many of the papers the hope has been expressed that now that the Government has settled the question of Europe and their policy they will be able to get on with the more important problem of the incident. Selection of a President for the Seiyukai.
183.
1
As has been explained, feelings on this question among members of the party rose so high that the reformist group who favour the candidacy of Mr. Nakajima went to the length of occupying the party headquarters in Tokyo
98
No comments yet.
Private notes are available after approval.