b. Japan Earmarks Jehol as a Part of Manchukuo

While the Roosevelt Administration was indicating a co-operative attitude towards the League of Nations, Japanese troops began to move into Jehol. This movement had been anticipated by a Japanese attack upon Shanhaikwan which appeared “designed to shut out from Jehol the Chinese forces recently sent North.” From the viewpoint of the British Foreign Office the province of Jehol was “covered by the original proclamation of the Manchukuo state, to which the Governor of the Province was a party.” For this reason Sir John Simon, the British Foreign Secretary, was not sure whether the formal incorporation of Jehol into Manchukuo would be regarded “by the League as more than part and parcel of their [the Japanese] action in converting Manchuria into a new state.”3

It was apparent to Sir John Simon and to Secretary Hull that there was no real central government in China. The Lytton Commission could talk in general terms about this government and could condemn Japan for the erection of Manchukuo, but it was evident to realistic observers that Japan was the only stabilizing force in North China. With China in chaos it had been necessary for Japan to protect her interests against the menacing Red tide of communism and against the outrageous demands of competing Chinese war lords. In Peiping, Ambassador Johnson saw the situation in a clear perspective and informed Secretary Hull that China had “no real national army capable either of making effective the Government’s writ throughout the country or of effective resistance under unified control against a modern power despite the fact that over two million men are under arms. They are the tools of rival militarists who have repeatedly plunged the nation into civil war and whose most solemn pledges to support the National Government are usually worthless.”4

When these Chinese militarists, whose armies had brought devastation to large areas in China, moved into Jehol, the Japanese Government decided to expel them. According to Matsuoka there were more than 100,000 Chinese troops stationed in this territory claimed by Manchukuo. If they did not consent to immediate withdrawal, they would have to be ejected by force.5

In the Department of State, the Division of Far Eastern Affairs prepared a special memorandum on the “Possibility of Chinese-Japanese Hostilities in Tientsin-Peiping Area.” After discussing the activities of Chinese troops along the frontiers of Manchuria, the memorandum remarks: “The Japanese not unnaturally declare that China’s activities in that connection are provocative and, if continued, must be met by Japanese military operations in China proper.” In answer to the question about what America should do in this situation, the memorandum continued: “It is believed that there is no initiative which the American Government might advisedly take in this connection. The foreign power which has the most at stake in that area is Great Britain.”6

While British and French interests were seriously affected by the Japanese advance into North China, it seemed very difficult to secure agreement on the bases of a joint policy. Europe continually turned to the United States for leadership in this Far Eastern crisis, but the Roosevelt Administration refused to crawl far out on a diplomatic limb in the manner that was so characteristic of Secretary Stimson. On April 22 the French Foreign Office indicated to Mr. Marriner, the American chargé d’affaires in Paris, that it would be advisable for the United States, England, and France to “confer with a view of determining what should be done” with reference to the Japanese advance in North China. It was “vital” that the three powers should “act together.”7

Secretary Hull was not ready to subscribe to a joint policy in the Far East and he was definitely opposed to taking the initiative in this regard. In view of “Great Britain’s membership in the League and extensive interests in North China, leadership in any action of the powers in capacity of a go-between should advisedly be left to the British.”8 This decision of Secretary Hull was strongly supported by Mr. Hornbeck, chief of the Division of Far Eastern Affairs. In a penetrating memorandum dealing with the crisis in China he showed that chaos continued to prevail in large areas in that unfortunate country. “China’s leaders, both political and military,” had not yet “given evidence of having arrived at any position of unity or solidarity among themselves.” A “five-fold revolution” was in progress throughout the land and this had prevented the officials from showing any “sign of firmness in terms of singleness of purpose and centralization of authority and responsibility on their own part.” In the face of this official incapacity it was not worth while to attempt mediation.9

The European powers with extensive interests in the Far East were not discouraged by the negative attitude of Secretary Hull relative to co-operation. They kept pressing for some international action to stop the Japanese armies from moving ahead in Manchuria, but the Department of State remained noncommittal. In another memorandum Mr. Hornbeck again defined the policy of the Roosevelt Administration:

The material interests most menaced by the Japanese advance in the area now under attention are British interests. Next, French. The initiative toward concerted action, if to be taken by any of the major powers without reference to the League of Nations, might best be taken by the British Government. Next best, by either the French or the Italians. . . . We have repeatedly stated that initiative should come from them rather than from us. . . . From time to time since September 18, 1931, we have . . . taken the initiative toward inducing action. . . . Very seldom have we had favorable responses from the other major powers concerned.10

It was obvious that European and Chinese attempts to draw the United States into some form of concerted action against Japan were futile. Having failed even to elicit from the Secretary of State a note denouncing Japanese aggression in North China, the Chinese Government decided to sign the well-known Tangku Truce of May 31, 1933. At the time the truce was signed, Japanese troops were in secure control of Jehol Province and occupied most of Northeast Hopeh. Under the terms of the agreement (1) Chinese troops were to withdraw from Northeast Hopeh Province. The boundary of this area, subsequently referred to as the “demilitarized zone,” extended roughly in a northwest-southeast direction some miles “northeast of the railway connecting Peiping and Tientsin.” (2) The Japanese Army was to have the right to conduct inspections to ascertain whether the Chinese Government was fulfilling this stipulation. (3) The Japanese Army was to withdraw to the Great Wall and Chinese police organizations were to undertake the maintenance of order in the “demilitarized zone.”11

The result of the Tangku Truce was the extension of Japanese control, not only over Jehol, but also over Northeast Hopeh Province. While nominally the “policing” of this part of Hopeh Province was entrusted to Chinese forces, it was realized that Japanese authority in that area would be paramount. This arrangement was merely a prelude to the creation in the autumn of 1935, under Japanese direction, of the East Hopeh Anti-Communistic Autonomous Government which will be discussed in another section.

c. Secretary Hull Rejects Idea of Japanese Good-will Mission

The fact that Secretary Hull did not issue a statement condemning the Tangku Truce was interpreted by some Japanese statesmen as an indication that the Roosevelt Administration would not continue the hostile attitude toward Japan so often assumed by Secretary Stimson. As early as May 2, Ambassador Grew had a friendly conversation with Matsuoka who “observed that in his opinion the development of good relations between the United States and Japan should be the cornerstone of Japanese policy.”12 In the following month there were indications that the Japanese public shared the feelings of the Foreign Office. When Admiral Montgomery M. Taylor, in command of the United States Asiatic Fleet, paid a visit to Japan, he was greeted with unusual cordiality by everyone. This warm welcome was regarded by the American Embassy as strong evidence of the “marked improvement in the Japanese attitude toward the United States.” Japan was turning from Britain to America: “For many years the Japanese have apparently considered the British their best friends in the family of nations. Many of them now have . . . decided that a conflict of commercial interests will always prevent a continuance of their friendship and they are consequently looking to the United States to take the place of their former Allies.”13

In its earnest desire to improve relations with the United States the Japanese Foreign Office as early as December 1932 had been considering the dispatch of a good-will mission to the United States, and in September 1933 when Ambassador Grew had a formal conversation with Hirota, he found the Foreign Minister in a most friendly mood. Hirota had just succeeded the undemonstrative Uchida, and he made a special effort to convince Grew that the polar star of his policy would be the establishment of cordial relations with the United States. Grew was certain that these assurances were sincere. He discovered it was a pleasure to meet a Foreign Secretary with whom he could “really talk things out.”14

The opportunity for a frank discussion of affairs came a few days later when Grew called at the residence of the Foreign Minister. Hirota immediately intimated that he was contemplating the dispatch of a good-will mission to the United States as an evidence of his desire to “develop closer relations between the United States and Japan.” Grew at once discouraged such a step. He believed that informal visits by distinguished Japanese statesmen like Prince Tokugawa would accomplish far more than the proposed good-will mission.15 Secretary Hull agreed with this opinion and he suggested that the best way for Japan to win American friendship was through the removal of any possibility of discrimination against American interests in Manchukuo.16

d. Friction in Far East Points to Eventual Russo-Japanese War

One of the reasons for this Japanese approach to the United States was the belief that war between Japan and Russia was almost inevitable. By 1933, Outer Mongolia was so completely dominated by Russia that it could be used as a base for further Russian infiltration of North China. The Russian menace to Japanese interests in Inner Mongolia and Manchukuo was assuming clearer outlines each day. In order to meet it with assurance, it would be expedient for Japan to cultivate friendly relations with the United States. The American Government should be able to perceive the dangers of expanding communism and present with Japan a common front against the great enemy of capitalism.

The desire immediate to the heart of Joseph Stalin was some means of preventing any close attachment between the United States and Japan. Such a union could erect an effective barrier against the Red tide that had already rolled into Outer Mongolia and Sinkiang. The fate of China would be decided by the attitude of the United States, and Russia knew that a friendly nod from the United States would weight the scales in her favor.

In the early part of March 1933, Ambassador Grew received from “a reliable Soviet source” an outline of Soviet-Japanese relations. The Embassy’s “informant” assured Mr. Grew that Japan was pushing preparations for “a war with the Soviets, with the United States, or with both.” As a bulwark against this threatened war the “Soviet Union badly needs the resumption of diplomatic relations with the United States. It is able, but cannot agree, to repay the old Russian debts owing to American citizens, because to repay one set of debts would make it necessary to repay all.” The Russian Government was willing, however, to give economic favors in “return for the cancellation of the old debts.”17

Four months later the Russian Government made another approach to the United States. M. Bogomolov, the Soviet Ambassador to China, expressed to Ambassador Johnson the opinion that the “absence of friendly relations between Soviet Russia and the United States” made the position of Russia in the Far East “very weak.” He then confidentially added that this same absence of friendly relations “was also a factor of weakness in the position of the United States in the Far East.” The intimation was very clear: America should resume diplomatic relations with Soviet Russia lest the Japanese Government, in the event of war, would be able to persuade the American public that the armies of Japan were “fighting, not Soviet Russia, but the Soviet regime.”18

In October 1933, Ambassador Grew sent to the Department of State a careful estimate of the situation in the Far East and came to the conclusion that it was “not unlikely” that Japan was determined “to remove the Russian obstruction from the path of her ambitions at an advantageous moment.” This moment might occur in 1935. One of the main reasons for this clash between Japan and Russia was the Japanese fear of communism. “Communistic thought” was regarded in Japan with the utmost aversion and drastic measures were being taken “to stamp it out of the country. Japan considers herself as the bulwark against the spread of communism southward and eastward. Given sufficient provocation, the Japanese could readily be aroused to enter Siberia with the intention of completely destroying a regime which it fears and detests.”19

This fear of communism, which so strongly colored the relations between Japan and Soviet Russia, was not felt by the Roosevelt Administration which decided to court rather than repel the advances from the Russian Foreign Office. Despite the Russian absorption of Outer Mongolia and the infiltration of Sinkiang, the Department of State refused to regard Japan as a bulwark against any further Russian movement into North China. Instead, it decided to recognize Soviet Russia and thus give the cause of communism in China a tremendous boost. On November 16, 1933, recognition was formally extended to Soviet Russia with all its wide implications of a joint policy against Japan. The Roosevelt Administration had made it clear that it had turned its back upon a Japanese bid for a rapprochement based upon a common hostility towards communism. Apparently, in the Far East, Japan, rather than Russia, was the nation to be disciplined.

e. Japanese Gestures of Friendship are Rebuffed by the U.S.

The President’s decision to favor Russia rather than Japan in the Far East was in defiance of the opinions of some American diplomats in that area. Mr. Edwin L. Neville, counselor of the American Embassy in Tokyo, wrote a long memorandum in October 1933 which gave a realistic summary of the situation in China. It was apparent that the

establishment of the present regime in Manchuria is to place the Japanese and Russians face to face over a long frontier. They need no longer consider any Chinese political interest in that region. . . . So long as the Soviet Government was not a military power the Japanese felt that their national interests in Manchuria were not seriously menaced. When, however, Soviet military prowess was added to the problems which the Japanese had to confront on the mainland, they came to the conclusion that Chinese political complications, at least, should be eliminated in that region. . . . So far as the United States is concerned, there seems no probability that the American people would be willing to engage in any new ventures in this part of the world. . . . In the light of Russian activities in Outer Mongolia and the behavior of Soviet agents in intramural China, it is open to question whether a Russian military victory . . . would be of any value in preserving or restoring the political and administrative integrity of China.20

Mr. Neville saw clearly the menace of the Russian advance in North China and indicated the fallacy of any belief that a Russian military victory over the Japanese would restore the political and administrative integrity of China. But Ambassador Grew closed his eyes to the implications that lay behind the Roosevelt Administration’s policy of extending recognition to Soviet Russia. In his diary he made the following comments which illustrate his narrow vision: “The President has played his cards well: he said not a word about Manchuria but started building up the fleet and recognized Soviet Russia; as a result he gets an entirely new and more friendly orientation of Japanese policy toward the United States.”21

It is quite surprising that Mr. Grew could seriously confide to his diary on November 30 that the Roosevelt recognition of Russia had compelled the Japanese Government to adopt an “entirely new and more friendly orientation” in its policy towards the United States. Since March 1933 the Japanese Government had gone out of its way to conciliate America and to win the approval of the Department of State. It is something of a shock, therefore, to find Ambassador Grew refusing to read the abundant evidence that revealed this Japanese good will and to strike a note of unfairness that was soon sounded with more emphasis by Secretary Hull.

But Hirota was so profuse in his friendly gestures that Grew had to admit that the Foreign Minister was “genuinely doing his best to improve Japan’s relations with foreign countries all along the line.” In the face of this amicable attitude it would be inexpedient for Secretary Hull to issue any new note with reference to the Stimson doctrine of nonrecognition. America would “sacrifice no principle by silently” maintaining its position.22

As the weeks went by, Grew became more and more impressed with the pacific dispositions of Japan’s leaders. The Emperor was a man of “mild and peaceful character.” Prince Saionji, Count Makino, and many members of the Genro were profoundly imbued with the “horrors of war.” The Prime Minister was “more peaceful than bellicose,” while Hirota was doing all he could to improve Japan’s relations with other countries. At a recent dinner at the Tokyo Club, Baron Hayashi, one of the Emperor’s favorites, had voiced with impressive earnestness the desire of the Japanese Government to avoid war: “We want peace.”23

As an important gesture along this line, Hirota sent a new ambassador to the United States. Hiroshi Saito, who began his duties as ambassador on February 13, 1934, had made an intensive study of American history and was certain that he “knew the American people.” His previous experience in consulates on the Pacific Coast and as secretary of the Embassy in Washington had given him an intimate acquaintance with American habitudes of thought. According to Frederick Moore, “no American career diplomatist was his equal.”24

Saito’s first task in Washington was to endeavor to persuade Secretary Hull to negotiate a new treaty with Japan. In the course of these negotiations some formula might be found that would eliminate the causes of future friction between the two countries. At least these conversations would afford an opportunity frankly to discuss all questions at issue. They might lead to a Japanese-American understanding of tremendous importance to the preservation of peace in the Orient. Japan was gravely concerned about Russian objectives in North China. Using this Japanese apprehension as a convenient diplomatic tool, Hull would have a chance to shape the situation in the general direction of American desires. Such a procedure would call for diplomatic skill of a high order. It seems probable that Secretary Hull regarded the task as too difficult for him to handle because he flatly refused to open negotiations looking towards a new treaty with Japan25 that might have led to a friendly accord.

Hull finally consented to an exchange of diplomatic notes which contained the usual aspirations. Hirota tried to show an amicable spirit by referring to the fact that for eighty years Japan and the United States had “always maintained a relationship of friendliness and cordiality.” After alluding to the increasingly important trade relations, he expressed the conviction that “all issues pending between the two nations will be settled in a satisfactory manner.” It was the sincere desire of the Japanese Government that a “most peaceful and friendly relation will be firmly established between her and her great neighbor across the Pacific, the United States.”

The reply of Secretary Hull was cordial on the surface, but behind each paragraph lurked the shadow of the Stimson doctrine.26 If he had encouraged lengthy diplomatic conversations in preparation for a formal treaty with Japan, he might have found some answer to the questions that found a thunderous expression in the attack upon Pearl Harbor. His note to Hirota was couched in friendly phraseology, but it dodged the issue of Japanese expansion in North China. Hull knew that this issue was like a small cancer deep in the delicate tissue of Japanese-American relations. It could be removed by the radical procedure of war or it could be checked by the X rays of a friendly understanding. He chose to let it grow until war was the only remedy, and his responsibility for that result is obvious to any student who carefully examines the diplomatic correspondence.

f. Japan Proclaims a Monroe Doctrine for the Far East

The most important question that disturbed the course of Japanese-American relations was the one dealing with the status of Manchukuo. When the Japanese Foreign Office received word from Saito that Secretary Hull would not discuss in detail the outstanding issues pending between the two countries, Hirota reluctantly realized that it was in vain to hope for any understanding that would remove all causes of friction. He still persisted, however, in making friendly gestures in the direction of the United States. One of the most significant of these was his decision to pay a warm tribute to the memory of Townsend Harris, the first American Consul to Japan. On April 22, Grew was taken on a Japanese destroyer to the port of Shimoda where long lines of school children greeted him with loud shouts of “banzai.” There were many speeches that stressed the long tradition of cordial relations between Japan and the United States, and the ceremony impressed Grew as a very “moving one.”27

But this glow of friendly relations was soon extinguished by the reaction produced by a statement issued by Mr. Amau, the chief of the Bureau of Information and Intelligence of the Japanese Foreign Office. On April 17, 1934, Amau issued to the Japanese press a statement of the foreign policy, formulated by the Foreign Office with reference to China. Its terse phraseology sounded like a challenge to all the powers that had large interests in China. After a declaration that Japan had “special responsibilities in East Asia,” the statement went on to say that in order to fulfill those responsibilities it might be necessary at times for Japanese armed forces to act on their own initiative and not to seek the co-operation of other nations. It was only natural, therefore, for Japan to “oppose any attempt on the part of China to avail herself of the influence of any other country in order to resist Japan.” Loans for political purposes or shipments of munitions of war would be regarded with suspicion.28

Ambassador Grew immediately sent a telegram to Secretary Hull relative to the Amau statement, and Maxwell M. Hamilton, of the Division of Far Eastern Affairs, hurriedly prepared a memorandum on the situation. In the event that the Japanese Government sent to the Department of State a copy of the Amau statement, the acknowledgment of the receipt of that document should be “very brief and should indicate merely that we purpose to continue in our traditional and consistent course of conducting foreign relations in accordance with the developing principles of international law and the treaties to which the United States is a party.”29

On April 20, Ambassador Grew sent to Secretary Hull a dispatch dealing with the issuance of the Japanese Monroe Doctrine for the Far East and he inclosed a copy of the unofficial statement issued by the Japanese Foreign Office on April 17.30 An interpretation of this statement was made by Ambassador Saito in an interview with Constantine Brown on April 21. The Japanese Government would consider extending loans or selling aircraft to China as “an unfriendly act.” The Western nations did not have the “remotest idea” of how “to deal with the Chinese. . . . The Japanese Government . . . has decided to prevent the furtherance of the present trouble by the loans which Western nations are giving the various Chinese leaders to further their own ambitions.”31

These Japanese statements of policy in the Far East rang like an alarm along the quiet corridors of the Department of State, and Under Secretary of State Phillips requested the Japanese Ambassador to pay a formal call and present some explanation of the action by the Foreign Office. Mr. Saito was disturbingly vague in his answers to the questions of Mr. Phillips. He doubted whether the statement made by Mr. Amau had been made in “any precise form” and therefore it was difficult to give any adequate explanation of it. Phillips complained that Mr. Saito was not of “much help” in this situation, and the interview ended on a distinctly unsatisfactory note.32

From April 21 to April 24 some British newspapers expressed opinions that were strongly pro-Japanese. The London Daily Mail emphatically stated that it was difficult to see “why Japan’s preponderance of interest in China should be disputed,”33 and the London Morning Post acidly observed that “the interventions both in Shanghai and in Manchuria, whatever may be thought of the methods employed, were invited by China, if not forced upon Japan through the anarchy and misrule which threatened every foreign interest.”34

Sir John Simon, the British Foreign Secretary, had been far more cautious than the British press in expressing his opinion. His public statement appeared to Mr. Hornbeck, chief of the Division of Far Eastern Affairs, as “somewhat ambiguous,” and the British Ambassador, during a conversation with Mr. Hornbeck, admitted that the Foreign Secretary when under verbal fire was “very cagey” in his language. When the ambassador (Sir Ronald Lindsay) made an inquiry concerning American policy, Mr. Hornbeck replied that “we feel that action by the various governments concerned on parallel lines and with the appearance of a common front would have obvious advantages but that we did not intend to assume or be placed in a position of leadership in initiating proposals for joint or concurrent action.”35

While the Department of State was seeking some formula that would fit the situation in the Far East, Ambassador Grew had an interview with Hirota who tried to quiet any suspicions by giving explicit assurances that there “was no intention on the part of Japan to claim a privileged position in derogation of the rights and responsibilities to which the signatories of the Nine-Power Treaty are entitled.” The Foreign Office was endeavoring faithfully to “follow the policy of the Emperor,” and was anxious to “achieve with all countries, and especially with the United States, relations of friendliness.”36

Mr. Grew was not deeply impressed with these friendly words, and he confided to his diary the opinion that the Amau statement “accurately expresses the policy which Japan would like to pursue.”37 Mr. Hornbeck agreed with this viewpoint,38 but he prepared a memorandum in which he advised the Secretary of State to follow a policy of caution: “In the light of what has happened up to the present, I personally favor making no reply to the Japanese statement. . . . It appears that no other government is prepared to take a strong position against the Japanese statement. . . . American interests in China are not, in my opinion, any more important than, if as important as, the interests of Great Britain, Russia and possibly France. I do not think that the United States should ‘stick out its neck’ and become the spearhead in opposition to Japan.”39

Secretary Hull paid little attention to this warning memorandum by Mr. Hornbeck. On April 28 he sent to Tokyo an aide-mémoire which clearly outlined the viewpoint of those persons in the Department of State who favored exerting constant pressure upon Japan. He referred to the treaties which defined America’s rights in China and then bluntly stated that the treaties themselves could be modified or terminated only by “processes prescribed or recognized or agreed upon by the parties to them.”40

This aide-mémoire reached Tokyo on July 29. Although it was Sunday and was also the Emperor’s birthday, Grew sent a hurried note to Hirota and requested an immediate audience. The Foreign Minister at once acceded to this request, and after slowly reading the Hull statement, he remarked that Amau’s ill-chosen words had caused “great misunderstanding.” His manner was “perfectly friendly,” and he betrayed no sign of displeasure because the statement of the spokesman of the Foreign Office had been so directly challenged.41

It is evident that Hirota was still trying desperately to court American good will in the face of the growing Russian menace to Japanese dominance in Manchuria. Japan was deeply concerned over the communist threat to one of the main life lines of her empire, and she had directed the implications of the Amau statement at Russia and not at the United States. The establishment of bolshevik control over Russia in 1917 had been viewed by Japan with anxious eyes, and her invasion of Siberia had been prompted by the necessity of stemming the communist tide. As the Bolsheviks strengthened their hold upon Russia, Japanese fears deepened. These fears had been readily recognized in the report of the Lytton Commission:

As the Soviet Government and the Third International had adopted a policy opposed to all imperialist powers which maintained relations with China on the basis of existing treaties, it seemed probable that they would support China in the struggle for the recovery of sovereign rights. This development revived all the old anxieties and suspicions of Japan toward her Russian neighbor.42

These suspicions were confirmed when Russia and China signed a treaty on December 12, 1932, which restored diplomatic relations between the two nations. This agreement, it was feared, might be the signal for joint Russian and Chinese pressure upon the Japanese position in North China. Uchida, the Japanese Foreign Minister, recognized this possibility. In a speech in the Diet he ominously remarked: “Should the Red movement in the Yangtze Valley and South China, which have long suffered from the activities of Communists and the depredations of Communist armies, gain in strength as a result of the Sino-Russian rapprochement, that would be a serious menace to peace in the Orient against which Japan must certainly be on guard.”43

The establishment of the Japanese-controlled state of Manchukuo was one of the means devised in Tokyo to meet this Russian threat. In order to improve her position in Manchuria, Japan raised Henry Pu-yi from Regent to Emperor and formally crowned him at Hsinking on March 1, 1934.44 This was an obvious bid for international recognition of the government of Manchukuo. The London Times responded with a statement that some countries with large business interests in the Far East would soon find it necessary “to reconcile their trading activities in Manchuria with the policy of recognition.”45 The New York Journal of Commerce expressed hearty agreement with this viewpoint and praised the government of Manchukuo as the “most stable and efficient that any portion of China has enjoyed for a long time past.”46 Mr. T. J. League, who had spent many years in China, wrote to Mr. Hornbeck to advise him of the exact status of Manchukuo:

Manchuria has never at any time been part of the “Chinese body-politic.” It stands now as it has done, as a unit distinct and entirely separate from China. . . . I should like to suggest to you the wisdom of discrediting entirely the Russian propaganda against Japan, which is, and has been for some time past, virulent. . . . Recognition of Manchukuo would alleviate most of this and put the whole situation in an entirely different and more favorable atmosphere. Personally, I believe that Japan is sincere in her presentations and purposes.47

While the great powers hesitated about granting recognition to the state of Manchukuo, Russia was rapidly strengthening her position in the Far East. First she adopted special measures to encourage migration to the maritime provinces of Siberia. Next, collective farmers were granted exemptions from agricultural taxes; wages for workers were raised to inviting new levels, while prices paid by the government for the products of the fisheries were increased in a significant manner.48

Japan regarded these Russian moves with sharp suspicion and she redoubled her efforts to purchase the Chinese Eastern Railway. When the Soviet Government fixed the price at 160,000,000 yen, Hirota spurned that sum and offered only 120,000,000 yen. In August 1934 the negotiations completely broke down and left relations between the two countries seriously strained.49 Lieutenant-Colonel Seiichi Aoki, in a popular Japanese magazine, published an article which indicated the imminence of war.50 Stalin answered this challenge with a defiant declaration: “We do not fear threats and are ready to give blow for blow.”51

In anticipation of actual warfare in the near future, Japan completed in 1933 some 1,060 miles of new railway in North China and then pushed some new military highways to the borders of Manchukuo.52 In November 1934 the Japanese Cabinet approved the largest military budget on record. Russia met this action by increasing her army appropriation from 1,573,000,000 rubles in 1933 to 1,795,000,000 rubles in 1934.53

It was widely recognized that President Roosevelt’s recognition of Russia had added considerable strength to the Muscovite position in the Far East, thereby increasing Japan’s difficulties in her endeavor to dominate Manchuria. It was apparent to Japan that Russia had long-range plans to communize China and thus eventually to control a large portion of eastern Asia. The very nature of international communism made it impossible to have stable relations with Russia, so Japan again turned to the United States in May 1934 in the hope of erecting a common front against the foes of capitalism. Knowing that the Roosevelt recognition of Russia would make inexpedient any reference to the dangers of communism, the Japanese Ambassador addressed to Secretary Hull a note which explored the bases upon which a Japanese-American understanding could be built. Emphasis was placed upon the importance of adopting a policy which would prevent China from relying upon her ancient stratagem of playing off America against Japan.

It was important to have some joint “governmental action” that would dissipate the “suspicion and fear between the United States and Japan.” This could take the form of a joint declaration which would stress a desire to “promote trade to the mutual advantage of the two countries and to make secure the principle of equal opportunity of commerce in the Pacific regions.” The declaration could also include a pledge binding each nation to “respect the territorial possessions and the rights and interests of the other,” and it would “restate their determination that the two countries should ever maintain a relationship of peace and amity.”54

g. The State Department Frowns upon an Understanding with Japan

It was obvious that Ambassador Saito was angling for some joint statement of policy like the Root-Takahira or the Lansing-Ishii agreements of 1908 and 1917, but Hull did not regard Japanese friendship as worth-while bait. He had already rejected formal negotiations looking towards a treaty between the two nations, and he now refused to be drawn into an executive agreement that would announce American acceptance of Japan’s special position in North China. Such an agreement would have changed the history of our Pacific relations and would have eliminated the tragedy of Pearl Harbor. But once more the barrier of the Stimson doctrine held the two nations apart and prevented an accommodation that would have pointed towards peace.55

Rebuffed for a second time by Secretary Hull, Japan now turned to Germany. In the summer of 1934 a Japanese naval squadron paid a good-will visit to German waters, and this gesture was followed by the dispatch of Japanese military and naval experts to Germany. Trade agreements were the next item in this catalogue of friendship.56 As the courtesy list lengthened and commercial advantages became manifest, Poland took an active interest in this Japanese-German rapprochement. Trade possibilities with Manchukuo led many statesmen in Europe to ponder whether it was worth while to adhere to the Stimson doctrine of nonrecognition.

There were other economic factors that disturbed the equation of international friendship. In 1933, Japanese textiles began to flood the markets in which British goods had long held a dominant place. This was particularly true with reference to the markets in India, Egypt, and East Africa. In 1934 the situation was so serious that a conference was held in London between British and Japanese manufacturers for the purpose of allocating the textile trade of the two countries. No agreement could be reached and this impasse led Mr. Walter Runciman, president of the British Board of Trade, to issue a statement that seemed equivalent to a declaration of economic warfare upon Japan.57 Trade wars are often the prelude to armed conflict.

The United States experienced this Japanese commercial invasion in 1934 when imports of cotton cloth from Japan rose from 1,116,000 square yards in 1933, to 7,287,000 square yards in 1934. In the first three months of 1935 these imports reached the startling figure of 12,771,000 square yards, and the owners of the New England cotton mills saw bankruptcy just around the corner of another year. But the general picture of American commercial relations with Japan was distinctly reassuring. Japan’s total exports to the United States in 1934 were considerably less than in the previous year, while American exports to Japan rose from $143,000,000 in 1933 to $210,000,000 in 1934. This rapidly increasing trade with Japan was partly explained by the fact that Japanese mills were consuming a large portion of the American cotton crop. The percentage of the crop that went to Japan rose from 15 per cent in 1929 to 30 per cent in 1934. While many countries were reducing their imports of American cotton, Japan was constantly increasing her purchases of this important raw product, thus adding another link in the economic chain that bound the two countries together. In comparison with this fast-growing trade, the Open Door in China was like the entrance to the cupboard of Old Mother Hubbard.58

h. Closing the Open Door in Manchuria?

With Japanese markets expanding each year and with Japanese mills consuming American cotton in a constantly increasing volume, it seemed as though the economic basis for a Japanese-American accord had been firmly established. But Secretary Hull could not keep his eyes from the Manchurian scene where, it was widely alleged, the Open Door was being slowly closed by Japanese pressure. Japan regarded Manchukuo as her first line of defense against Russian aggression. This aggression would not come in the immediate future, but the communist currents in China would gradually be merged into a mighty stream that would surge against all Japanese outposts in Manchukuo in a tide that would be difficult to stem. If these bastions of defense were not carefully prepared to meet these rapidly rising waters, they would be engulfed and the creative work of several decades would be destroyed.

This pressing problem of national defense was the one that gave Japanese statesmen their greatest concern, and it was the real reason why the Japanese Foreign Office announced in April 1934 its Monroe Doctrine for eastern Asia. Hirota knew that the American Monroe Doctrine had always rested upon the broad basis of national defense. He also knew that the primary reason behind Theodore Roosevelt’s predatory policy in Panama was this same factor of defense. Even as late as 1912 the American Government had invoked the Monroe Doctrine as a deterrent against the acquisition, by a Japanese corporation, of a large tract of land in the vicinity of Magdalena Bay. This bay was in Mexican territory, but if it were controlled by a Japanese corporation, it might be used as a naval base for future operations against the United States. Under pressure from the Department of State the Japanese corporation abandoned its project, and the Senate of the United States, as a warning to other Japanese corporations, passed a resolution opposing the transfer of strategic areas in the Americas to non-American corporations which might be acting as agents for a foreign power.59

The Japanese Government in 1912 had readily recognized the fact that the American Government could not permit any part of the Mexican borderlands to pass under the partial control of foreign corporations. Considerations of national defense were of paramount importance to every American statesman, and this factor had outweighed any regard for the feelings of Mexican politicians who might resent Yankee dictation with reference to business dealings with the nationals of other countries. In April 1934, Japan merely took a leaf from the book of American national defense and announced indirect control over the petroleum resources of Manchukuo. China would not like this action and neither would other countries that had hoped to exploit the riches of North China, but for Japan this control took on the aspect of a national imperative.

The first item in this program of control was the issuance by the government of Manchukuo of a charter to the Manchuria Petroleum Company (February 21, 1932). This charter provided that the new company would have a monopoly control over the sale and distribution of petroleum in Manchukuo. The capital stock of the company was owned entirely by the government of Manchukuo and by Japanese interests. There was no possibility that any foreign oil company could share in the management or the profits of the Manchuria Petroleum Company.

This secure control over the oil business in Manchukuo might adversely affect the oil companies of foreign nations by depriving them of the retail trade which they had developed over a long period of years. In 1932 about 55 per cent of the oil imported into Manchuria was handled by the American Standard Vacuum Oil Company and by the Texas Oil Company. British, Russian, and Dutch interests controlled 35 per cent of the remaining oil imports with Japan having only 10 per cent for her share.60 It is apparent that the Japanese Government was determined to adjust this balance of business so that it would incline in favor of her nationals. Oil is an essential commodity in modern warfare. It was only common sense for the government of Manchukuo to insist upon control over the oil resources within its borders.

Although the restrictive policy of the government of Manchukuo was criticized as being inconsistent with the Open-Door policy, it was soon obvious that American petroleum interests would not be seriously injured. American exports of petroleum to Manchukuo increased from $782,000 in 1936 to $3,436,000 in the following year. In 1938 these exports continued to increase, but the Department of State explained this favorable factor by asserting that Manchukuo was building up reserves for war purposes. This may have been true in 1938, but it was not true in the early thirties. In 1932, American exports to Manchuria were valued at only $1,186,000. After the erection of Manchukuo into a Japanese dependency, American trade rose to $2,691,000 in 1933, and in 1935 reached the respectable figure of $4,188,000. If the Open Door was slowly being closed in Manchukuo, there still remained a crack wide enough to permit a growing American trade.61

But the Department of State was not satisfied with these favorable trade statistics. Secretary Hull sent a series of strong protests to Japan with reference to the monopoly given to the Manchuria Petroleum Company,62 and American public opinion was aroused over the preferences given to Japanese nationals in their business enterprises within Manchukuo. Since 1899 many Americans had tickled their fancies with warm visions of a great export trade to China’s teeming millions.63 Although this trade never developed, they continued to cherish their illusions and they overlooked the far larger trade opportunities with Japan. The friction between the United States and Japan over Japanese commercial policies in Manchukuo was entirely needless. Secretary Hull was determined to press for the continuance of a trade principle (Open Door), even when its partial abrogation meant an increased volume of American trade. He seemed to be unaware of the ominous fact that his notes were creating a backlog of ill will that might later burst into the flames of war.

Total U. S. sales in Manchukuo by years
1931	$2,176,000
1932	1,186,000
1933	2,691,000
1934	3,398,000
1935	4,188,000
1936	3,542,000
1937	16,061,000

Back Door to War: The Roosevelt Foreign Policy 1933-1941