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In June 1869, Yamada was received in an audience (together with Kuroda Kiyotaka) and appointed "Hyōbu no dai-jō" (senior staff officer in the Ministry of War). This rank became that of major general in the fledgling Imperial Japanese Army in July 1871. On 22 October 1871, he set sail for the United States as a member of the Iwakura Mission. Visiting San Francisco, Salt Lake City, Chicago, and Washington DC, he also went to Philadelphia to view the Philadelphia Naval Shipyards. He then returned to Japan via Paris, Berlin, the Netherlands, Belgium, Lausanne, Bulgaria and Russia. He also visited the 1873 Vienna World Exposition, returning to Japan 2 June 1873. On his return, he was named Envoy Extraordinary and Minister Plenipotentiary to Qing China to negotiate the opening of diplomatic relations, however, Kido Takayoshi went in his place, as Yamada was called upon to use military force to suppress the Saga Rebellion and subsequently the Satsuma Rebellion by disgruntled ex-samurai. On 5 July 1874 he was appointed Justice Lord under the "daijō-kan" system, which he held to 10 September 1879. He was awarded the Order of the Rising Sun, 2nd class in 1875, and was promoted to lieutenant general in November 1878.