RECENT DEVELOPMENTS IN
SINO-JAPANESE RELATIONS

By
HOTSUMI OZAKI

ASAHI INSTITUTE OF THE FAR EAST

Prepared for the Sixth Conference of the
Institute of Pacific Relations to be
held at Yosemite, California
August 15th to 29th, 1936

Japanese Council Papers, No. 14

JAPANESE COUNCIL
INSTITUTE OF PACIFIC RELATIONS
NIHON KOKUSAI KYOKAI
12, 2-CHOME, MARUNOUCHI
TOKYO — 1936

CHAPTER I

THE PRESENT STAGE OF SINO-JAPANESE
RELATIONS

Realistic Approach to the Problem

SINCE the Manchurian Incident, Sino-Japanese relations have
definitely entered a period which represents an entirely new
development: whatever the true nature of the new relationship,
it is at least a strained and serious one which requires incessant
concentration on the part of the two parties. Unless each other's
standing is clearly comprehended and the nature of the relation-
ship distinctly determined, the two nations would not be able
even to move a step. One might say that the two nations are
standing face to face on the edge of a precipice.

It is idle to look towards such phrases as "the same race and
the same culture" or "the good-will of neighbours," as has
often been done in the past between the peoples of the two
countries-phrases which now sound distinctly empty and super-
ficial. This kind of superficiality is not only unnecessary but also
injurious. Nothing is more important for the two nations than
to have a precise understanding of each other as well as of one-
self; especially of the footing on which they are standing. If the
two nations are really standing on the brink of a precipice, even
if one party imagines that she can cut through a safe path by
the use of force, there would be no guaranty against her losing her
standing and slipping off into an abyss at that moment.

Though it is not easy to know how the deadlock of the Sino-
Japanese relations is to be overcome, yet in any case it is certain
that its pre-requisite is none other than to know the other party,
to know oneself, and to know the prevailing situations which are
mutually confronted.

It is needless to say that the fundamental understanding of
Sino-Japanese relations should have its nucleus in the clarification
of various economic and social relations. It was by assuming this

The Japanese Council and the Institute of Pacific Relations
do not assume responsibility for statements
contained in this paper

PRINTED BY HOSOKAWA PRINTING CO., LTD., TOKYO

3

approach that the Lytton Commission, which was sent by the
League of Nations to investigate the state of affairs subsequent to
the Manchurian and Shanghai Incidents, tried to comprehend the
fundamental circumstances which led up to Sino-Japanese compli-
cations and thus to contribute to the solution of the problems.
It is to be regretted, however, that this Commission, having had
to complete the report in a very limited time, was unable to go
very much further than mechanically arranging the materials sub-
mitted respectively by the two parties. Consequently, it must
have been a mistake to try and find some way of solving concrete
problems on the conclusions obtained from such a compilation.
No one, however, would deny that the Commission made a valu-
able contribution towards making the world acknowledge the ex-
istence of complicated questions. In studying Sino-Japanese re-
lations, let us also bar an idealistic method and adopt an economic
and social approach.

The Manchurian Incident and Thereafter

The cause of the Manchurian Incident is, doubtless, to be at-
tributed to the fact that whereas Japan, suffering like every other
nation from the world-wide economic crisis, looked towards
Manchuria and China for overcoming the difficulty and made seri-
ous efforts there, the conditions of China were such that China was
unable to accept such a move on the part of Japan.

Since the death of Chang Tsuo-ling, order, which had hitherto
been preserved by his primitive method, had come to be dis-
turbed; devaluation of Manchurian currency together with the fall
in the price of agricultural products was aggravating the peasant
classes so much that the peasants themselves were being compel-
led from the depths of poverty to turn themselves into bandits.
These conditions in the Three Eastern Provinces were contrary to
Japan's interest; Japan, it has to be remembered, was accumulat-
ing tremendous capital for the development of Manchuria. In
September, 1930, Chang Süeh-liang, the young master of the
Three Eastern Provinces, was strengthening his relation with the
Nanking Government under a close understanding with Chiang
Kai-shek, and with regard to the railway problem which had vital
bearings upon Japanese interests, he was eagerly pushing the
scheme for the railways to surround the S.M.R. Attempts on the
part of Japan to solve the complications through diplomatic chan-
nels were of no avail.

4

nels were of no avail.

As regards the relation between Japan and the National
Government, the latter was demanding the return of the settle-
ments as an item in the movement for restoration of the national
rights of China. Furthermore, the National Government enforced
the new State tariff from January, 1931. Of the Mex. $64,000,000
increase in revenue to be realised by this revision, the
amount to be borne by Japan was something like Mex. $15,000,
000. This raise in tariff was principally a direct financial ex-
pediency; at the same time to a certain extent, it resulted in the
protection of home industries. In addition, the great fall in world
markets of the price of silver,¹ China's basic monetary metal,
acted as an extraordinary stimulant for industrialists in China.
One new enterprise followed another not only in the cotton in-
dustry in which a Sino-Japanese rivalry had been witnessed for
some time, but in other light industries and miscellaneous goods
industries, thus resulting in a violent competition between Japan
and China. Shanghai was doubtless the prominent arena for this
duel.

When studying Sino-Japanese relations, particular attention
should, apart from such pure economic questions as described
above, be paid to the existence of a demand of military and strategic
character on the continent on the part of Japan. The course of de-
velopments following the Manchurian and Shanghai Incidents,
which are called by the name of Sino-Japanese War, was perhaps
inevitable. The independence of Manchoukuo and subsequent
vicissitudes of Manchou-Japanese relations provisionally solved
the question of Japan's economic demand on Manchuria for a
market both for merchandise and for capital as well as for a source
of raw-material supplies, and also Japan's political aspiration for a
strategic foothold on the continent.

In spite of the obstinate protest on the part of China and the
denial on the part of the World Powers of the fact that "Man-
choukuo is a *fait accompli*:" the situation seems to have already pass-
ed that stage and developed into the next. And this new stage
seems to be represented most characteristically by the so-called
"North China Problem." Following the proper order of things,
let us observe first the changing phases of the superficial facts.

1. The price of silver quoted at London in February, 1931, was as
low as 12 d.

5

“Favourable Turn” of Sino-Japanese Relations

The first step of the recent stage in the development of Sino-Japanese relations was marked by the establishment of the Peiping Political Council under Huang Fu in May, 1933 and by the Tangku Truce to which he was a party.

The Wang Ching-wei Government at Nanking at first had for its motto "Resistance on one hand and negotiation on the other," but having then realized that "resistance" was difficult, it came to resort to "negotiation" in co-operation with Huang Fu of the North. Such achievements in 1934 as the restoration of through traffic on the Peiping-Mukden Railway (July 1st), establishment of customs stations along the Great Wall (June 3rd), and resumption of postal communications between Manchoukuo and China (January 1st, 1935), being the terms of settlement of the Truce, considerably contributed towards giving a new turn to the deadlock of Sino-Japanese relations. Side by side with these, consolidation of the loans which Japan had made to China was carried out. When things were turning towards such a trend, the publication in the Foreign Affairs Review of an article entitled "Enemy or Friend? Re-examination of Sino-Japanese Relations" was noteworthy as a kind of ballon d'essai. The author was Hsu Tao-lin, but it was rumoured that he wrote it in collaboration with Chen Pu-lei, a Kuomintang reviewer, in accordance with suggestions made by Chiang Kai-shek. It pointed out the errors made both by Japan and China after the Manchurian Incident, and maintained that as the both parties were to hold themselves responsible for the unsatisfactory situation, there was a dire need of readjusting diplomatic relations between the two nations.

Efforts were, indeed, made on the part of Japan too for the readjustment of diplomatic relations. The speech on diplomatic affairs made by Hirota, then Foreign Minister, in the Diet in January, 1935, was reasonable and gave a good impression to China. It led up to the two interviews carried out on January 29th: one between Ariyoshi, Japanese Minister to China, and Wang Ching-wei, President of the Executive Council; and the other, between Lieutenant-General Suzuki and Chiang Kai-shek. On February 2nd, Chiang Kai-shek gave the Central News Agency an account of the interview; on the 20th, Wang Ching-wei made a statement of his pro-Japan policy at a meeting of the Central Political Council;

6

and on the 27th, a resolution concerning the enforcement of the "People's Freedom of Carrying On Their Business" clause (meaning a restriction on anti-Japanese movement), included in the Constitution for the Period of Political Tutelage, was published. Then, there was Wang Chung-hui's visit to Japan. And so, under the slogan of "Sino-Japanese economic rapprochement," one saw the development of an atmosphere of Sino-Japanese friendship. As an active underlying factor on the part of China of this Sino-Japanese economic rapprochement doctrine, one must first of all mention China's economic difficulty. The aggravating agricultural crisis, together with the difficulty of the question of the rise in the price of silver, was jeopardizing the financial position of the Nanking Government. For this reason, China looked to Japan for some economic support, and at the same time, she hoped that Japan would collaborate with Great Britain and the United States in their economic assistance, or at least, not to assume an attitude against it. On the other hand, the anti-Japanese boycott movement, which was begun on a big scale after "September 18," had resulted in placing China herself in an aggravating economic situation,² for the purchasing power of the Chinese people was by no means so strong as to be able to shut out Japanese goods. It was, therefore, quite natural that restoration of ordinary economic and political relations with Japan was desired.

“North China Problem”

The efforts towards ameliorating Sino-Japanese relations by means of economic rapprochement which has thus been under way amidst extraordinary interest and expectation, were, however, to encounter a fatal obstacle on account of the successive eventualities which took place at a dazzling pace in North China since the summer of 1935. No sooner had the intricate situation been thought to have been cleared up by the so-called Ho-Umetsu Agreement of June 10th, than autumn was to come with its doomed destiny. The Farmers' Autonomous Movement played the role of lighting the fuse for deepening disorder in Peiping.

2. The consequences of the anti-Japanese boycott will be described later. It may, however, be exemplified by the case where a straw-hat, which can be bought for one yen if imported directly from Japan, costs five yen if imported via Hongkong.

7

The ordinance of November 3rd for centralization of silver, included in the programme of reformation of the monetary system by the Nanking Government, was an incentive to foster among local potentialities an anti-Central Government atmosphere: it was thus that Yiu Yu-ken declared an independence in Tungchow on November 25th, and established the East Hopei Autonomous Council for the twenty-two provinces of the "War Zone." Then, on December 14th, the Nanking Government officially recognized the organization of the Hopei-Chahar Political Council headed by Sung Cheh-yuan. As regards the relationships between this Hopei-Chahar Political Council and the Nanking Government and Japan, respectively, they seem to be yet of so transitional and delicate a character that there is no way of defining them at the moment.

The North China problem indicates an important development in Japan's continental policy; and at the same time, it would be justifiable to say that it also represents a development which has been inevitable. Some people discern a similar force to that which caused the Manchurian Incident acting on it. It would be difficult, in any case, to find a fundamental solution for it so long as Sino-Japanese relations remain in their present state.

There is no doubt that the anomaly and difficulty of Sino-Japanese relations are felt today most acutely in the North China problem. The tension of these relations will still be greater in the future when the two countries have further dealings on such questions as the amalgamation of East Hopei and Hopei-Chahar, smuggling in North China, and autonomous movements of Inner-Mongolian peoples.

In the meantime Japan's diplomatic policy in dealing with the present stage of Sino-Japanese relations has gradually come to be shaped in the so-called Three Principles of Hirota, now Prime Minister.³ The Three Principles may be summarized as follows: First, that China should abandon the policy of balancing one foreign power against another by relying upon the United States and European Powers; second, that China should respect the de facto existence of Manchoukuo; and last, that Japan and China should collaborate in adopting an expedient and effective policy against

3. Speech made by Hirota, then Foreign Minister, before the Lower House of the Japanese Diet on January 21st, 1936.

8

the invasion of the Reds in China.

Between the two countries, however, no final agreement has as yet been reached as to these Three Principles.

Essential anomalies and antagonisms in Sino-Japanese relations can, may it be agreed, reach a satisfactory understanding only by means of clearly defining the economic relations of the two countries and also the relations between China and other Powers.

## CHAPTER II

### SINO-JAPANESE ECONOMIC RELATIONS

#### *Foreign Competition in China*

China demands that one of the principles with which to determine new Sino-Japanese relations should be Sino-Japanese equality.⁴ It is natural that she should demand equality in relation to her international status, especially in view of the fact that she has for many years been seeking the abolition of unequal treaties. In reality, however, there seems to be no escape from the fact that there are essential differences between the economic and social positions of the two countries.

We need not elucidate at length on what kind of political and economic position China has internationally. It will suffice here to say that nearly the whole of her economic vitality is in the hands of the Great Powers. There is practically no branch of the important industries in China, such as industrial manufacturing, mining, shipping, and other big commercial organizations, which is not under the controlling hands of some of the Great Powers. The industrial products of these Powers have penetrated into the remote corners of agricultural villages of China. Besides, in the financial organization of China, too, the controlling power of foreign monopolistic capital predominates. The financial power

4. Equality is the first of the three principles which are said to have been informally proposed by Wang Chung-hui when he visited Japan in 1935, namely: (1) equality; (2) territorial security; and (3) diplomatic channels as the instrument through which the negotiations between the two countries should be effected.

9

of foreign capital seeks to control the customs revenue and savings, and to monopolize the foreign exchange business. In spite of formal and partial amelioration, various "Unequal Treaties" as represented by Leased Territories, Ceded Territories, Consular Jurisdictions, Customs Tariffs, etc. do still exist in China and the future prospect is that their importance will grow rather than diminish as they had for a period.

Japan today, on the other hand, has emerged as a capitalistic country; not only is she able to keep up with such advanced capitalistic countries as the United Kingdom and the United States, but she also enjoys, it must be admitted, a position superior to theirs on the Chinese mainland thanks to her propinquity and geographically advantageous position. The writer has once epitomized Japan's power of propulsion in her Continental Policy as follows⁵:

1. Japan's rapid development in recent years: A table indicating the comparative positions of Japan, Great Britain, and the United States will suffice here.

TABLE 1

<table><thead><tr><th rowspan="2">Year</th><th colspan="3">Index Number of Industrial Production</th><th colspan="3">Index Number of Industrial Electric Power</th><th colspan="3">Index Number of Value of Exports</th></tr><tr><th>Japan</th><th>United States</th><th>Great Britain</th><th>Japan</th><th>United States</th><th>Great Britain</th><th>Japan</th><th>United States</th><th>Great Britain</th></tr></thead><tbody><tr><td>1913</td><td>100</td><td>100</td><td>100</td><td>100</td><td>100</td><td>100</td><td>100</td><td>100</td><td>100</td></tr><tr><td>1925</td><td>222</td><td>151</td><td>87</td><td>900</td><td>296</td><td>349</td><td>292</td><td>196</td><td>146</td></tr><tr><td>1929</td><td>297</td><td>170</td><td>99</td><td>2,450</td><td>400</td><td>464</td><td>312</td><td>211</td><td>139</td></tr><tr><td>1933</td><td>346</td><td>109</td><td>87</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td><td>—</td></tr></tbody></table>

Apart from the items contained in the above table, the rapid progress in the rate of increase of population, the size of the mercantile marine, etc. have also been remarkable. This rapid progress must be regarded as one of the basic conditions in Japan's outward expansion.

2. The fact that Japan's status in the Far East has greatly been elevated: Japan has become a World Power; yet, a still more important fact is that she is in a special position as an important

5. Cf. "Japan's Power of Propulsion in her Chinese Policy and Its Limits," the "Chuo Koron" (Central Review), September, 1935.

10

Asiatic Power. Japan's economic relations with the continent of China are incomparably closer than those of Great Britain's or the United States'. It is true that the Chinese markets have important significance both for Great Britain and the United States, but the importance of the Chinese market for these countries is not so urgent as it is in the case of Japan. Hence, it is natural that Japan's activities should be more expressive than those of the other two countries.

3. Japan's desire to obtain a strategic hold on the Far Eastern continent.

4. Existence of the conditions which have kept the two greatest rivals of Japan on the continent of China on the defensive against Japan: This refers to the fundamental incompatibilities existing between Great Britain and the United States and to the world economic crisis which have made them concentrate upon their respective internal problems, etc.

5. Extraordinary development of China's economic crisis and the weakening of the National Government of China (Kuomin Chen Fu).

### *Three Power Economic Rivalry*

To analyse the intricate phases of Sino-Japanese relations at the recent stage, comprehension of the economic and social situations is absolutely a pre-requisite.

Let us, now, examine the vicissitudes of Japanese trade with

TABLE 2

<table><thead><tr><th>Year</th><th>Country</th><th>Japan</th><th>Great Britain</th><th>United States</th></tr></thead><tbody><tr><td>1913</td><td></td><td>20.88%</td><td>17.01%</td><td>6.14%</td></tr><tr><td>1920</td><td></td><td>28.64</td><td>16.47</td><td>17.90</td></tr><tr><td>1928</td><td></td><td>26.39</td><td>9.40</td><td>16.99</td></tr><tr><td>1929</td><td></td><td>25.22</td><td>9.30</td><td>18.02</td></tr><tr><td>1930</td><td></td><td>24.63</td><td>8.15</td><td>17.50</td></tr><tr><td>1931</td><td></td><td>20.04</td><td>8.29</td><td>22.15</td></tr><tr><td>1932</td><td></td><td>14.95</td><td>11.20</td><td>25.43</td></tr><tr><td>1933</td><td></td><td>9.71</td><td>11.30</td><td>22.86</td></tr><tr><td>1934</td><td></td><td>12.21</td><td>12.00</td><td>26.16</td></tr><tr><td>1935</td><td></td><td>15.03</td><td>10.48</td><td>18.93</td></tr></tbody></table>

N.B. Up to the first half of 1932, figures concerning Manchuria are also included.

11

China in comparison with the relevant activities of Great Britain and the United States. Foregoing Table 2 indicates the percentages that Japan, Great Britain, and the United States occupy in China's aggregate amount of imports.

The decrease in Japan's trade after 1932 is chiefly to be attributed to the separation of Manchuria from China proper. It is true that the anti-Japanese movement has done a considerable amount of damage; yet, the decrease of trade caused by the boycott has been made up by the increase of trade with Manchoukuo. The amount of smuggling⁶ into China from Japan reaches figures that cannot be over-looked.

Directly before the Great War, Japan occupied the first place, with Great Britain second, and the United States a poor third. During the war, Japan and the United States having taken long strides, the latter has, since 1931, been remaining at the top, whereas the decline of Great Britain has been striking.

Let us direct our attention to Japan's investments of capital in China, in comparison with similar activities on the part of Great Britain and the United States, respectively.

TABLE 3

<table><thead><tr><th rowspan="2"></th><th colspan="2">1902</th><th colspan="2">1914</th><th colspan="2">1931</th><th colspan="2">1934</th></tr><tr><th>Capital Invested</th><th>%</th><th>Capital Invested</th><th>%</th><th>Capital Invested</th><th>%</th><th>Capital Invested</th><th>%</th></tr></thead><tbody><tr><td>Japan</td><td>1</td><td>—</td><td>220</td><td>13</td><td>1,137</td><td>35</td><td>1,410</td><td>40</td></tr><tr><td>Great Britain</td><td>260</td><td>33</td><td>608</td><td>38</td><td>1,189</td><td>57</td><td>1,202</td><td>34</td></tr><tr><td>United States</td><td>20</td><td>3</td><td>49</td><td>3</td><td>197</td><td>6</td><td>230</td><td>6</td></tr></tbody></table>

N.B. 1. Figures up to 1931 are reproduced from Remer, "Foreign Investments in China."

2. Figures in the above table include capital invested in Manchuria.

Here, also, Japan's rapid advance is to be perceived. Before the War in 1914, the position of Great Britain was incontestably superior, whereas the investments of Japan, which had already by that time made considerable progress as compared with that before the Sino-Japanese War, were no more than one third of that of Great Britain. Since then, Japan has not only caught up

6. The question of smuggling is dealt with on page 17.

12

with Great Britain, but has even gone to the extent of outstripping her. The United States, although predominating in the sphere of trade, made a delayed start in the contest of investing capital in China.

## Chinese Boycott of Japanese Goods

China's weapon against such inroads of foreign economic power has been the "boycott." No wonder this question drew serious attention from the Lytton Commission which stated at the beginning of Chapter VII of its Report:

> "No survey of the Sino-Japanese conflict would be accurate or complete without some account of another important factor in the struggle, namely the Chinese boycott of Japanese goods."

Except in the case of the Anti-British Strike of 1925-26 in Hongkong and Kwantung, the boycott has always been anti-Japanese. Up to today, it has been carried out no less than ten times.⁶ª Here is ample evidence of how dangerous are the eventualities which might result from the present Sino-Japanese relations. It is mainly to be attributed to the national sentiments of the two countries; at the same time, we should not forget that Japan and China are now engaged in a competition in the Chinese markets as producers of light industry products of the same category.

Inasmuch as the organization of China's anti-Japanese goods movement has become more and more general and deep-rooted,⁷

6. a 1908 The Tatsu-Maru Incident;

1909 Antung-Mukden Railway Incident;

1915 The "Twenty-One Demands";

1919 The Chantung Question;

1923 Port Arthur and Dairen Recovery Question;

1925 May 30th Incident;

1927 Despatch of troops to Shantung;

1928 Tsinan Incident;

1931 The Manchurian Affair (Wanpaoshan and Mukden Events);

1935 The North China Question.

7. By generally mobilizing all the organizations throughout the country, anti-Japanese propaganda is carried out; and by organizing associations and establishing rules, demonstrations, picketing, inspection, confiscation, etc. are effected.

13

the measures taken by Japan against it have also become increas-
ingly serious. The greatest success was perhaps achieved in this
respect when Japan returned Shangtung; but in other cases, the
Japanese policy does not seem to have achieved expected results.

Japan certainly has been suffering from this movement; but at
the same time it cannot be denied that it has given a still heavier
boomerang blow to Chinese industry and commerce which is
standing on a considerably feebler economic foundation than the
Japanese. When the ninth anti-Japanese goods resolution was
under consideration, more than thirty important Shanghai trading
firms appealed in writing to the Chamber of Commerce of Shanghai
stating that the prohibition of Japanese raw materials would
oblige certain factories to suspend their work, and that if
Japanese manufactures were not to be bought, it would be
the Chinese people who would suffer from it. Further, the anti-
Japanese movement has proved to be one of the causes of the
decreased activity of Chinese merchants abroad. True the de-
pression in the overseas markets themselves and the recent deve-
lopment in the exchange rates do undoubtedly account for de-
creased remittances home of their earnings, but at the same time
the boycotting by them of Japanese goods has driven themselves
into difficult economic situations.

Apart from the anti-Japanese goods movement, the legitimacy of
which can be a subject of dispute, there is a legitimate means of
preventing the flow of Japanese goods into the Chinese markets,
namely the prohibitive tariff. Since January 1st, 1931, China
put the autonomous statutory tariff into operation—the fact that
this imposes the greatest burden on Japanese goods has already
been described. After the expiry of the Sino-Japanese Tariff
Agreement, China suddenly published a new tariff on May 16th,
1933. By this, the Statutory Tariff of 1931 came to be applied
to all the goods imported from Japan. The new tariff is higher
than the old by 160 to 700 percent according to different articles,
and it gives an impression that this tariff has been established
against Japanese goods, thus launching the anti-Japanese move-
ment on a legitimate basis. Japan made strong protests. Then,
the Original Producing Country's Inscription Law was promul-
gated nullifying re-packing operations as a means of circumventing
the anti-Japanese goods movement.

The New Tariff of July, 1934, seemed to treat Japanese goods

14

more favourably than hitherto; Japan, however, is of the opinion
that the tariff, on the whole, is still too heavy.⁸

Now, it is the smuggling which has been so much talked about
these days that has come to be practised as a means against this
high tariff and anti-Japanese movement. One must not overlook
the fact, however, that smuggling is going on not only in North
China, but also in the South; the smuggling moreover is not ex-
clusively of Japanese goods. The recent vicissitudes have never-
theless made the question of smuggling in North China particu-
larly important.⁹

Construing the East Hopei Autonomous Government as an
autonomous polity, Japan does not consider goods paying its
low tariff as smuggled goods, but calls them by the name of
"special trade."¹⁰

It is to be noted that Sir Frederick Leith-Ross, British economic
envoy, who has visited Japan twice, stated at an interview with
press reporters on returning to Shanghai that he was surveying
the question of smuggling in relation with the possibilities of
lowering the Chinese tariff.

## CHAPTER III

### SINO-JAPANESE RELATIONS AND THE RED ARMIES IN CHINA

#### Red Army Activities

Communism in China and its related problems are no longer
mere internal problems of the concern of China alone, but they

8. Tariff revisions were carried out on January 1st, 1931; August 4th, 1932; May 22nd, 1933; and July, 1934.

9. The Chinese Maritime Customs has calculated the value of smuggled sugar, artificial silk, etc. in North China during 1935 at Mex. $ 63,000,000 in Tientsin alone, and at Mex. $ 30,000,000 during the first quarter of this year.

10. The "Inspection Charge" of the East Hopei Autonomous Gov-
ernment is a half, one-third, and a quarter of the maritime customs tariff
of China with respect to sugar, artificial silk, and other articles, respec-
tively.

15

are of international significance; and so far as Japan is concerned, they are problems of immediate importance meriting more than just passing attention.

With their main strength in the north-eastern parts of the Chiang-si Province, these Red Armies have always been antagonists of the Nanking Government.¹¹ Ever since the close of 1930, Chiang Kai-shek has devoted almost one-half of the expenditures of the Nanking Government¹² to the suppression of these Red Armies;¹³ and it was only in the autumn of 1934 that finally after five campaigns he finally suceeded in driving their main body to the west.

The Red Armies, which had thus commenced a westward movement after having broken through the boundaries of nine provinces culminating a march extending 3,000 miles, joined Hsu Hsing-chien's army near Tienchuan in the western part of Szechwan Province in the middle of July, 1935. Mao Tse-tung's "Shensi Kansu Branch Army" which left Maoerkai towards the end of August, arrived in the north of Shensi via Kansu, and joined forces with the local Red Armies led by Lin Tse-tan, Hsu Hai-tung, and others.

The activities of this allied Red Army, which had crossed the frozen Yellow River in February, 1936, and invaded Shansi Province, were imminently menacing to North China then in the midst of a historical reformation. After the middle of February, when such important places as Yinhu, Shihlow, Chungyang, Lishih, Hsi-hsien, etc. in the Luliang Mountains in the western part of Shansi had been taken, the Army then approached Fengyang, an important point in the Fenshui Basin towards the beginning of March. Moreover, a part of it had spread itself over the plains in southern Shansi after having broken through a

11. The Provisional Government of the Soviet Republic of China has been in existence since December, 1931.

12. According to "The Financial Report for the 21st and 22nd Fiscal Years of the National Government of China," by H. H. Kung, Minister of Finance, the military costs occupy 50% of the aggregate government expenditures. In reality, however, the amount of military expenditures was even greater; and what is more, the greater part of that sum was expended on the suppression of the Red Armies.

13. Cf. "Suppressing Communist Banditry in China," by Ting Leang-li, Shanghai, 1934.

16

southern part of the Tatung-puchow Railway. Although the main body of the invading army itself seems to have been repulsed from Shansi Province through the desperate efforts made by the Shansi and Nanking Government authorities, yet the primary object, of the invading army has been to obtain a permanent sphere of control over Kansu, Shensi, Shansi, and Shuiyuan.

At present, in addition to the Red Armies enumerated above, there is still another group under the leadership of Chuteh, Hsu Hsiang-chien, Chang Kuo-tao, etc. in the vicinity of Szechwan and Sikang. This group evidently intends joining the group headed by Holung and Hiaoke in the western part of Sikang, the latter group having abandoned its old strongholds and scattered over the Sangchi and Tayung districts in the north of Hunan.

### Chinese Red Policy Anti-Japanese

The new policy of the Chinese Communist Party may be stated as being the mobilization of a "United Anti-Japanese Army" and the establishment of a "People's Government of National Defense." The Communist Party which advocated an "Anti-Japanese United Front" in 1932 following the Shanghai Incident, rebuked Chiang Kai-shek in January of 1933 for not undertaking a firmer opposition against the Japanese offensive. It declared at that time that it was prepared to co-operate with any army having the same object of fighting the Japanese. The Seventh General Meeting of the Comintern emphasized in its resolutions the necessity of bolstering up the Soviet Movement in China and of launching an united front anti-imperialist movement, particularly against Japan, as well as against the pro-Japanese "running dogs" of China. The Anti-Japanese Manifesto of August 1st, 1935, issued jointly by the Communist Party and the Soviet Government of China may be identified as part of a movement in line with the foregoing principles.

The appearance of the Red Armies at the flanks of North China is an important problem for Japan. It gave, in effect, a kind of stimulant to the students' movement, which was begun last December in Peiping in opposition to the creation of the East Hopei Autonomous Government; and has also had no small influence in the rapid crystallization of an anti-Japanese undercurrent.

In its recent struggles with the Nanking Government, the baners of the Sinan Party bore the slogan "Anti-Japanese." Pro-

17

minor persons like Li Chi-sheng and Chen Ming-shu, involved in the Fukien Incident (November, 1933 to January, 1934) which was assumed to have important bearings upon the attitude of this South-Western section, and the leaders of the Nineteenth Route Army like Tsai Ting-kai and Chiang Kuang-nai are openly advocating collaboration with the Communist Party of China in organizing a "Revolutionary Association of the Chinese Races."

This nation-wide anti-Japanese feeling growing fast in the current of the racial movement revival in China combined with the activities of the Red Armies in North China constitute problems of the utmost importance to Japan. Although it is believed that there is an understanding, and some practical expediencies are under consideration between Japan and the Hopei-Chahar Political Council as regards the question of co-operation for defense against the Red Armies in North China, yet as far as Japan is concerned, the sphere of this problem is not limited to North China alone. The whole of China lies within its scope and here is where the significance of the third of the so-called "Hirota's Three Principles" lies.

Then Foreign Minister Hirota explained to the Diet as follows:

> "The Communist Movement is the greatest problem which China is facing, today. And the unsettled situations of the Far East are for this movement to take advantage of. To deliver China from the menacing hands of the Reds is a question important not only for our neighbour, but also for every nation concerned."¹⁴

Detailed explanations of the question are not given in the foregoing quotation, but it may be interpreted that the communist movement referred to is not confined to that carried on in China alone, but it means rather the Red Front which has the Soviet Union as its centre, and which seeks to establish a connected line through Sinkiang (Chinese Turkestan), Szechwan, Kansu, Shensi, Ningsha, Suiyan, Outer Mongolia, and finally Siberia.

So far as the menace of the Communist Movement is concerned, the Nanking Government stands on the same footing as Japan. There are reasons, however, why they cannot accept establishing a common front with Japan—reasons resulting from

14. Speech delivered before the Lower House of the Japanese Diet, January 21, 1936.

18

differences in the social and economic organization of the two countries. This is apparent from the Sino-Japanese disagreement with respect to the so-called Three Principles.¹⁵

The Nanking Government, in short, is internally in an awkward position. Any practical realization of a common Sino-Japanese front against the Reds will have to await a more favourable development of the general state of affairs between the two nations. It is a question which belongs to the future.

## CHAPTER IV

### THE INFLUENCE OF THIRD POWERS ON SINO-JAPANESE RELATIONS

#### *Sinor-Japanese Relations and Third Parties*

The multifarious phases and difficulties of Sino-Japanese relations are caused partly by the peculiarity of China's social and economic organization. The economic structure of China, therefore, is inevitably connected with her position in international politics. Not only does China offer important markets to the industrially advanced capitalistic Powers, but she also represents an important field of action for world stratagem in its broadest sense. It is well known that these Powers are seriously and actively formulating their respective policies towards China with these two points in mind. Hence the relations between Japan, which is one of these Powers, and China, which furnishes the arena of their activities, cannot remain a simple bilateral relation between two countries; they are constantly influenced by the changes in the relations between the other Powers and China. Sino-Japanese relations, therefore, may be considered in one aspect as the relations between Japan and the other Powers speaking through their activities in China.

These relations in China today are unfortunately competitive rather than collaborative, and moreover at present there appear to be no prospects of this tendency relaxing in the future, but on the

15. On March 22, the Ministry of Foreign Affairs of the Nanking Government issued a statement in retort to Hirota's aforementioned speech.

19

contrary all present signs point to its becoming more intense¹⁶
than ever. The comparative tables relating to trade and investments
in China on the part of Japan, Great Britain, and the United Sta-
tes, respectively, to which the reader has already been referred, may
facilitate the understanding of this general competitive position.

Great Britain is concentrating her whole energy on protecting the Mex. $ 4,000,000,000 which she has invested in China, and she has a powerful political, economic, and strategic foothold in South China. The construction of the Kwantung-Hankow Railway has been completed recently; and by its connection with the Canton-Kowloon Railway, it will add tremendously to her influence in South-West China.

The two most important policies of the United States with
respect to China have been those of the "Open Door" and "Ter-
ritorial Integrity." The "Open Door" which was first enunciated
by John Hay, then Secretary of State for the United States, in his
memorandum of 1899, was re-iterated at Washington in the Nine
Power Treaty of 1922. The famous declaration of Secretary of
State Stimson on January 7, 1932¹⁷ during the rapid succession of
developments following the Manchurian Incident, bears a strong
resemblance to the memorandum of Secretary of State Bryan on
May 13, 1915, directly after Japan's presentation of the "Twenty-
one Points." The distinguishing feature of the American policy
as compared with that of Great Britain's is that it is not based
upon any specific territorial foundation. This fact has an insepara-
ble connection with the amount of American investments in China
which is insignificant with that of Great Britain's and also with
America's supremacy in trade with China.

The emphasis laid by Great Britain and the United States on the
Treaty for Renunciation of War during the early stage of the
Manchurian Incident and upon the principle of respecting the
League of Nations went far in formulating China's policy of put-
ting her fate in the hands of the League, and hence it was the
policies of these two nations which determined the nature of Sino-
Japanese relations during a certain period which followed.

16. The present writer has already published an exposition of the concrete facts related to this point. See: "Competition Among the World Powers in China," in "Kokusai Hyoron" (The International Review), January, 1936.

17. The American Notes of January 7, 1932. Willoughby, "The Sino-Japanese Controversy and the League of Nations", p. 205 et seq.

20

British, American, and Japanese China Policies

It seems that since 1935, Great Britain has been endeavouring
to stabilize Chinese markets by means of giving active financial
support to the Nanking Government. Having been approached
by China in the matter of loans at the end of the previous year,
Great Britain proposed that Japan and the United States join her
in extending a common loan to China. This proposition did not
receive any too enthusiastic support from the United States, and
Japan on her part opposed it. In September of 1935, Sir Freder-
ick Leith-Ross arrived in Shanghai entrusted with a mission of
protecting British rights in China. It is also said that China's
monetary reorganization was made possible to no small degree by
British support.

It is obvious that in view of China's economic crisis and the
financial difficulty of the Nanking Government, the most effective
and expedient policy towards the Nanking Government at the
moment is to extend financial support. Most active in this res-
pect has been Great Britain; while the United States which had a
grave interest in the silver question greatly added to China's eco-
nomic difficulties by her silver policy which boosted the silver
quotations. The opinion which circulated among the silver
producers and politicians of the United States, namely, that a rise
in silver prices would ameliorate the economic position of China
by adding to her purchasing power, has been proven to be a fal-
lacy. A monetary agreement between the United States and China
was recently signed whereby the United States intends to assist the
latter economically by purchasing the silver coins which China
has taken out of circulation. Thus the United States too has giv-
en every indication of giving active economic support to China.
This action on the part of the United States has given currency to
a rumour that she and Great Britain are to collaborate in assisting
China. Such a collaboration, however, is by no means a new
departure; it is a policy which the two nations have often followed
before and since the Washington Treaty.

The Japanese attitude in this respect is one which seems to have
been expressed in an informal statement¹⁸ given out by the Ministry
of Foreign Affairs at the time of China's monetary reform. The
unwavering policy of Japan as set forth in that statement is:

18. The Asahi Shimbun (Newspaper), November 10, 1935.

21

1. In due consideration of Sino-Japanese relations in the poli-
tics of the Far East, China's economic problems should be dealt
with only after consultation with Japan has adequately been
carried out, and with Japan's collaboration.

2. Any economic reform requires China's own determination to carry it out. Foreign loans are bound to be future burdens on the Chinese people, and by making China's financial readjustment impossible, the inevitable result following will be to place China under international control.

After the Fifth Kuomintang Congress in November of 1935, the Chiang Kai-shek Ministry was formed, and Chang Chun became Minister of Foreign Affairs for China. Although it was then expected that a new turn in Sino-Japanese relations would be realized very shortly thereafter, no development has taken place in the approximately half-year period since then. It is believed, however, that the inertia will now be overcome by the new Japanese Foreign Minister Arita and Shigeru Kawagoe, new Japanese Ambassador to China. The latter has proceeded to his post with plans for a Sino-Japanese economic collaboration, and the Chinese Foreign Minister Chang Chun agrees that a light is now seen in the promotion of more amicable and closer relations between Japan and China.

June 28, 1936.

22

PROGRAMME

International Dinner made by the following interested merchants:

Meat - Berk's Market-13024 E. Jefferson

Coffee - George Schleicher Market-10501 Korchoval--Sprague, Warner Co.

Cream - Detroit Creamery-Adams and Clifford

Potatoes - A. Poissant Market-10347 Korchoval

Baklava - Greek Britannia Cafe-415 Monroe

Flowers - St. Clair Florists

The Exhibit material includes personal treasures of scores of Detroiters who have graciously loaned them. Several owners are here as guests to share information regarding the objects displayed.

We deeply appreciate the volunteer appearance of all the talented entertainers on the programs in the gymnasium and swimming pool. To those unselfish ladie who have contributed the rich variety of baked goods for the sale, our thanks. The attractive waitresses are members of troop #4 and #67 Girl Scouts of America.

Finally, we wish to acknowledge with thanks the untiring services of the many boys, men, and ladies who have been on committees planning, directing, and laboring that this Festival might accomplish its purpose.

WEDNESDAY, JULY 27th, 1949

WSR NEWS RELEASE

NUMBER 387

REPORT OF THE JAPAN STUDENT RELIEF COMMITTEE

WSR in Geneva was pleased to receive during the last
few days the first Annual Report of the Japan
Student Relief Committee. We print below this
Report in full:

The Beginning of the Japan Student Relief Committee

The Japan Student Relief Committee was organised in April, 1948, when Mr. Bengt Hoffman, secretary of the World Student Christian Federation, visited Japan and brought the message and the kind gift of 10,000 Swiss francs. At that time, he visited many universities and colleges in Japan, and sent a very detailed and concrete report to all the organisations related to student relief. Encouraged by his activities, the Japan Student Relief Committee started its work.

The Japan Student Relief Committee is composed of three Christian organi-
sations that have many connections with World Student Relief. They are
the Japan Catholic Student Federation which is one of the units of Pax
Romana, the Student Department of the National Committee of Y.M.C.A.'s
of Japan, and the Student Department of the National Y.W.C.A. Each
organisation elected six representatives and the committee was established.
The Committee has met regularly, and has discussed how to organise the
JSRC, how to work out the needs, and how to provide the budget. The
research section of the Japan Student Relief has begun to study the real
needs of Japanese students.

The Activities of Japan Student Relief Committee

Half of the Committee members are working as an Executive Committee.
Headquarters are at the office of the National Committee of Y.M.C.A.'s of
Japan. (2, I-chome, Chiyoda-ku, Tokyo.) Although the activities of
the Japan Student Relief Committee were begun after careful consideration
and discussion, the work has been very weak, because many universities
and colleges have been destroyed in the war, and students have suffered
economically, politically and educationally.

In the autumn of 1948, when the Japan Student Relief Committee began to
work, Barnard College kindly sent us 116 CARE Boxes. We distributed them
to the students of Fukui City which was destroyed by a great earthquake,
and also to poor students in the Tokyo, Kyoto, and Osaka areas.

1. <u>Distribution of Vitamin Pills</u>

Having discussed the use of the 10,000 Swiss francs, we asked WSR to send

WEDNESDAY, JULY 27th, 1949

WSR NEWS RELEASE

NUMBER 387

us Vitamin Pills for weak students, and typewriters for poor students who had to support themselves by working. We received 100,000 pills from New York in February, and distributed them to the universities and colleges which had no medical department or health centre, and which had received no CARE foods. We also chose them with no relation to churches, because the Christian Colleges have had some relief goods through missions.

Each person received 100 pills for 3 months. 400 students in Tokyo, 200 students in Osaka, and 200 students who were engaging in side work received 100 pills each. A careful follow-up study is being made.

## 2. Distribution of Typewriters

Ten typewriters sent by WSR are used for students who wish to learn how to typewrite, and who have to earn money for their studies. It is very difficult for us to get classrooms, but at Sophia University, the Japan Student Relief could get a room, and several Catholic fathers are teaching typewriting. We are planning to have a typing school at the National Committee of Y.M.C.A.'s building in Tokyo, as soon as it is rehabilitated next month.

## 3. Clinic

At present it is necessary to have clinics for students, especially for tuberculosis, and for poor students who are having to work. The research section of the Japan Student Relief Committee inquired into the need of Japanese students, and decided on the establishment of a health clinic for students. The students' clinic that was started on the first of June, 1949, in cooperation with the United Church of Christ in Japan, has been working positively in spite of the lack of adequate equipment, and the lack of funds.

### (1) The people served by the clinic:

Men - 67

Women - 26

Total - 93

### (2) Items:

<table><tr><td>Röntgen Photograph</td><td>26 (Mon 18, Women 8)</td></tr><tr><td>Medical Examination</td><td>37 (Mon 28, Women 9)</td></tr><tr><td>Injections of Vitamin</td><td>12 (Mon 10, Women 2)</td></tr><tr><td>Examination of Blood</td><td>6 (Mon 6)</td></tr><tr><td>Examination of Faeces</td><td>5 (Mon 5)</td></tr><tr><td>Otorhinology & Dermatology</td><td>2 (Mon 2)</td></tr></table>

WEDNESDAY, JULY 27th, 1949

WSR NEWS RELEASE

NUMBER 387

(3) The equipment altogether is too small to satisfy the needs of 160,000 students. We are planning to extend our clinic activities to Catholic hospitals.

## 4. The Research Section

In April we inquired into the living conditions of 14,000 students. The result of this research shows how difficult it is for students to continue their study. There are many difficult problems. Who must solve them? We Japanese students must solve them.

### Our Future Plans

We are planning to have a health insurance system of students, and to have a hospital for tubercular students as soon as possible. WSSF (World Student Service Fund) Committee of Washington University is sending a mimeograph, with which we are hoping to have a printing school.

Libraries for students are to be established in three colleges for men and women in Tokyo. We wish to have our own Student Centre which will have a library, hall, hospital, dormitory, bathrooms, dining-rooms etc...

We are deeply thankful to all who are supporting the Japan Student Relief Committee. We know we should not rely on other countries, but it is most encouraging to receive sympathy and help from abroad. The Japan Student Relief Committee welcomes the interest and support extended to us at this time of such great needs.

### The List of Board of Trustees

**Chairman:** Mr. R.L. Durgin, Honorary Secretary of the National Committee Y.M.C.A.'s of Japan.

**Vice-Chairmen:** Mrs. Koko Kitamura, Prof. of Tokyo Women's Christian College.

Father Helmut Erlinhagen, Prof. of Sophia University.

**Executive Committee of the Board:**

Mr. Masaru Soto, Student of Sophia University

Mr. Shoji Fujisaki, Student of Moiji University

Father L.H. Tibesar, Priest of the Ginza Catholic Church in Tokyo.

Miss Kiyoko Takoda, Student Secretary of National Y.W.C.A.

Mr. Takeo Igarashi, President of the Hakuyosha Co. Ltd.

**Members of the Board:** Dr. Havhire Yuasa, President of Doshishe University and President elect of the International Christian University.

WEDNESDAY, JULY 27th, 1949

WSR NEWS RELEASE

NUMBER 387

Members of the Board;
(Contd.)
Mr. Takenosuko Miyamoto, Prof. of Tokyo Union
Theological Seminary.
Mr. Junkichi Satome, President of Daimaru
Dept. Store Co. Ltd.
Mrs. Shinako Kan, Prof. of Japan Women's
College.
Miss Shique Hikaru, General Secretary of
National Y.M.C.A.
Miss Haruyo Fukuhara, Prof. of Doshisha Women's
College.
Father P. Fr. Xav. Bosch S.J., Prof. of
Sophia University.
Mr. Koichi Kasuya.
Father Mackoy, Prof. of Sophia University.

Staff:
Executive Sec. Rev. Arata Ikeda
Corresponding
Sec. Miss Kiyoko Takeda
Secretary: Makoto Fujita
Treasurer: Takeo Igarashi
"
Koichi Kasuya
Research Soc. Prof. Miyamoto
Research members About 20 students sent from the 3 organisations

The Board Meeting is held once a month. Meetings of the Research Section are held twice a month."

In a letter which accompanied the Report of the Japan Student Relief Committee, it was stated that the present living conditions of Japanese students are still extremely difficult. Needs continue to be much the same as during last year. Although the food situation is somewhat better in general, students are still unable to get a well-balanced diet. They get almost nothing in the way of fats, meat, and sugar. An extensive need for supplementary food in helping the very high degree of malnutrition and the spread of T.B. is evident. Restrictions regarding the sending of books and periodicals have now largely been lifted and Japanese students would appreciate even second-hand books and magazines. The situation regarding clothing has become more acute. There is little opportunity for buying new clothing to replace present worn-out clothes, even supposing that the money is available. Shirts, underwear, shoes, dresses, and suits are urgently needed.

It is hoped that a representative of the Japan Student Relief Committee will be able to attend the Nucleus Meeting of the WSR Executive to be held in New York at the time of the ISS Assembly, August 4th-7th, and that a complete report of student needs and conditions in Japan can be presented on this occasion.

* * * * *

THE NATIONAL COMMITTEE

YOUNG MEN'S CHRISTIAN ASSOCIATIONS OF JAPAN

2, 1-CHOME, NISHI-KANDA,
CHIYODA-KU, TOKYO

ADDRESS FOR 1ST CLASS MAIL:
"TOKYO FOREIGN MISSIONARIES"
APO 500, C/O POSTMASTER,
SAN FRANCISCO, CALIF.

November 30, 1949

TADAOKI YAMAMOTO
CHAIRMAN

SOICHI SAITO
GENERAL SECRETARY

RUSSELL L. DURGIN
HONORARY SECRETARY

Dear friends,

On a recent visit to Kobe, a prominent lawyer and former mayor of the city told of a court case which had involved black market activities. The accused admitted his guilt of illegally disposing of some American wheat, but the situation was such that restitution was impossible. So he had turned over the equivalent to him with the request that it be used for some socially constructive purpose. Although the Kobe Y. M. C. A. still needed funds, the lawyer proposed that the amount be used toward the campaign for the Hiroshima Y. M. C. A. The suggestion met with unanimous approval.

The Durgins arrived back in Japan a year ago last July with no place to live and no office except a brief case and a desk in an already overcrowded room. The Y. M. C. A. houses had been left in ruins. We had questions in our minds about those truck loads of lumber and boxes of materials sent out by the International Committee ever becoming a house, but the patient and careful study by contractor, architect, both of the Durgins, and especially our faithful colleague, Saburo Nagai, finally produced a comfortable and useable pre-assembled home. The year has been characterized by frustrations growing out of all the red tape which confronts one at every turn, but at the same time by deep and lasting satisfactions resulting from being able to be in Japan during these important days.

The Tokyo Y. M. C. A. has thrown open its doors to Japanese youth again after three years of occupancy by the American army as a female billet. One of the first things done was to remove the sign—"No male allowed above the first floor". Complete rehabilitation will take time and money, but it is heartening to see the lift this event has given to the whole Association movement. At the opening service, a letter from General MacArthur expressed the feeling of all, when he said, "The influence of the Y. M. C. A. has been profoundly felt wherever peoples throughout the world have been fortunate enough to come within its benevolent ministrations, and I feel that its re-establishment in Japan marks another important milestone along the road of reorientation and reconstruction."

The Nagoya and Kobe Associations have dedicated the first units of their new buildings. The Kobe gymnasium is a converted steel frame of a bombed-out airplane factory, and will put to constructive use a building intended for producing machines of destruction. In both cities deep appreciation was expressed on every hand for the large part the World Youth Fund contributions had had in making the early reconstruction possible. It is gratifying to know that in spite of many difficulties the local sponsoring committees have already reached about 60% of the total goals in both projects. Reconstruction projects have also included Nagasaki, Hiroshima, Moji, Osaka, Yokohama, Sendai and the National Y. M. C. A. summer conference plan at Gotemba.

The National Y. M. C. A. building has been completed in spite of many obstacles. This building, thrice burned out and rehabilitated, was originally provided through the energetic efforts of Galen Fisher and contributions from many American friends. With World Youth Fund aid it will stand as a nation-wide symbol of the new spirit characterizing the whole Y. M. C. A. movement.

Secretarial Training Institutes, on-the-job training, laymen's training institutes, and a series of specialized group leadership institutes are steps in the process of providing the urgently needed new and vigorous leadership in the Association. Recreational leadership training institutes in many local Associations have helped give the Y.M.C.A. a place of leadership in this rapidly developing field.... The Tokyo Y.M.C.A. "Read the Bible Movement" has resulted in more than fifty groups meeting weekly in banks, business offices, homes, government offices and factories..... A recent Religious Education Institute at the Hiroshima Y.M.C.A. brought together over one hundred pastors, Sunday School teachers, Y secretaries and lay leaders..... More than fifty Hi-Y groups were represented at an all-day Hi-Y conference in the Osaka region last spring..... The Y's Men's Clubs, under the able leadership of Tsutae Nara, are developing new clubs and strengthening program content..... Two of our student secretaries attended the Asian Student Leaders Conference in Ceylon—the first time for Japanese to be allowed to leave the country for such a student conference—and they returned thrilled with the opportunity they had had and the visions of new international contacts and cooperation..... Three Japanese representatives returned from the World's Y.M.C.A. Conference for South and East Asia held last summer at Bangkok with a new realization of the significance of again becoming a member of the world Y.M.C.A. family..... The opportunity provided by the World Youth Fund for a few of our secretaries to renew contacts with the American and Canadian movements is already beginning to pay high dividends in international understanding and eagerness to cooperate.

Dr. Emil Brunner, eminent Swiss theologian and author, is here at the invitation of the World's Committee of the Y.M.C.A., and is greatly stimulating thought and action both in the Y.M.C.A. and among the clergy and laymen of the churches of the whole nation..... The student Y.M.C.A. movement has had its problems, but in confronting the wide-spread activities of the communist groups, our leaders are demonstrating the program which Christianity has to offer in a troubled society. Tsunegoro Nara, our National Student Secretary, who has been in a Siberian prisoner-of-war camp for the past four years, was repatriated last month and we are all rejoicing over his return. The addition to our staff of Dean and Midge Leeper has been a source of wonderful encouragement. Dean's leadership in the student Y work, and in the experimental Christian Youth Camp project this past summer indicates great possibilities for a vigorous growth in the student Y.M.C.A. movement during these important days ahead..... The student relief program has been trying to meet needs of students through distribution of vitamins, food parcels, CARE packages, providing a much needed physical and medical clinic, and devising ways and means for self-help projects. One significant aspect of this work is the close cooperation between the Y.M.C.A., Y.W.C.A. and the Catholic Student Association..... The National Y.M.C.A. is helping meet current needs through its literature program. Kaitakusha, the monthly organ of the Y movement, has been improved and its circulation increased. The following significant books are among those recently published by the Y.M.C.A. Press:

<table><tr><td>Group Discussion</td><td>by Saburo Nagai</td></tr><tr><td>Group Work</td><td>by Saburo Nagai</td></tr><tr><td>Games and How to Play Them</td><td>by Shiro Takahashi and Minoru Matsuda</td></tr><tr><td>Religious Faith and Literature</td><td>by Hisashi Miyamoto</td></tr><tr><td>Christianity or Marxism?</td><td>by Gan Sakakibara</td></tr><tr><td>The Christian Church and Communism</td><td>by Gan Sakakibara</td></tr><tr><td>Christianity and Our World</td><td>by John Bennett (translated by Nobuyuki Sakurai)</td></tr><tr><td>Christianity and the World Today</td><td>by Emil Brunner</td></tr><tr><td>Christianity and Communism</td><td>by John Bennett (translated by Norimoto Iino)</td></tr></table>

Last spring, Dr. John R. Mott, accompanied by our trusted and faithful former colleague Sid Phelps, brought great inspiration not only to the Y.M.C.A. movement, but to the Christian cause as

a whole. His remarkable vigor, his age-old but ever new messages of hope and Christian conviction, his insights and vision for the future, his intimate interviews with General MacArthur, the Emperor, Prime Minister Yoshida, and many other people, high and low, made possible a remarkable contribution on this his tenth visit to Japan. Mrs. Harper Sibley, whose visit overlapped that of Dr. Mott, brought great inspiration. Her vital Christian personality was felt by all with whom she came into contact, and the Y.M.C.A. is deeply appreciative of the results of her having to have four eyes and ears (for, as she said, "I have to represent Harper as well as myself").

The Young Men's Christian Association movement in Japan is making its influence felt within the country on a wider scale than ever before. Participation in prefectural and national youth leaders conferences have made possible intimate contacts with the leaders of the general youth movements of the country. Mr. Nagai, our Acting National General Secretary, has written two books this past year on the discussion method and group work which are now recognized and used as texts throughout the country ..... Help has also been extended to the democratic reorganization of the Boy Scout movement, which has spread rapidly and which has just finished its first post-war national jamboree with 3,000 boys from all over the country participating ..... In the field of general recreation, the Association has had a large share, with Mr. Saito, National General Secretary, as Chairman of the recently organized National Recreation Association. Mr. Nagai and I recently participated in a Recreation Leaders Training Institute at which one representative from each of the government ministeries were given a six weeks course in recreational leadership. The National Y.M.C.A. is planning an intensive recreation institute as soon as the right man can be found to come to Japan to give direction to this tremendously important need in the new Japan.

The airplane has made possible the rapid coming and going of many other people, all of whom have left their imprint, and we hope have been able to take back worthwhile impressions of what is happening in Japan as well as of what the Y.M.C.A. is trying to do in helping youth find its place of proper leadership in the evolving new Japan. Among many whom we have been able to serve in one way or another have been Mr. and Mrs. Basil Tippet of Toronto, E. Stanley Jones, Dr. E. G. Homrighausen of Princeton, Isabel and Monroe Smith with their wonderful group of Youth Argosy fliers, Bob McKibben of Los Angeles, Tracy Strong of the World's Y.M.C.A., Dr. William Tolley of Syracuse, S.C. Leung of the International Missionary Council, Dr. John Mackay of Princeton Theological Seminary, Senator and Mrs. H. Alexander Smith of New Jersey, C.W. Li of the World's Committee Y.M.C.A., Mr. and Mrs. Nevin Sayre of the Fellowship of Reconciliation, Domingo C. Bascara of the Y.M.C.A. of the Philippines, S.O. Peung, National General Secretary of the Korean Y.M.C.A., Mr. James Feiser and Dr. Ralph Diffendorfer of the Japan International Christian University.

The reorganized National Christian Council, of which I am the Honorary Secretary, brings together sixteen denominational and interdenominational agencies into a cooperating unit. The importance of providing an adequate strategy for the total Christian forces of Japan is one which cannot be over-stressed. During the war the United Church of Christ was essentially the ecumenical movement, but since this is no longer true, the place of the N.C.C. is of great importance. The Stanley Jones, John R. Mott and Emil Brunner meetings pointed out the need and opportunity which the Christian forces face. The open door will not remain open forever, and the urgency of the present moment is recognized by all.

As chairman of the Tokyo Union Church Board, I have had the responsibility for the weekly services and for laying plans for reconstructing the church from the present ruins of our former beautiful edifice ..... Another activity which has taken some time has been as representative of the Foreign Missions Conference of North America in clearing of missionaries and many temporary missionary visitors for entry into Japan, all of which has been of help in the development of the total Christian impact. General MacArthur on numerous occasions has been outspoken in his conviction that the Christian forces must be strengthened and made more effective. Just this past month

he shared with Tracy Strong and me his continued concern along this line.

The foundation laying period of the International Christian University is another area in which the Y.M.C.A. has had an important part. With the purchase of an excellent site, the organization of a Board of Councilors and a Board of Trustees, the election of Dr. Hachiro Yuasa as President, and the over-subscription by Yen 4,000,000 in a Yen 150,000,000 campaign, the University moves ahead to the next stage. Dr. Yamamoto, Chairman of the National Committee of the Y.M.C.A., heads the Board of Councilors, and twelve present or former Y.M.C.A. leaders have been named on the University's two Boards. Mr. Saito and I are members of the Board of Trustees.

Delphine has been busy as usual with her Bible Classes. English teaching, many personal contacts with students and others, monthly Y wives get-together, the Women's Committee of the Church of Christ, and especially as President of the re-activated Tokyo Women's Club, of which she was the last President in 1941. Large amounts of time have been devoted to the complicated processes of distribution of relief supplies to Y families and others. We want to send a very special word of appreciation for the many boxes of food, clothing, soap, pencils and other useful articles received. Words fail to adequately describe what this has meant to many who had lost everything but who have been courageously trying to recover again.

The general conditions in Japan are gradually improving. There are still many imponderables in the social, economic and political situation, but on every hand, one is impressed with the progress the past three years have witnessed. Part of this has been due to the beneficent concern of General MacArthur and his staff, but even such would not have been so effective had it not been for those qualities and characteristics of the Japanese people which have in the past and still do contribute to their strength. Given adequate time and a guarantee of freedom under the right kind of leaders, Japan has a potentially large sphere to play in cooperation with other self-governing and democratic peoples in helping construct a world of peace and good-will. In spite of all the economic and political problems, as well as international complications, Japan is steadily moving forward in the development of a truly New Japan, toward which her forward-looking and Christian leaders are looking, today as perhaps never before, with eagerness and hope.

Various delays have held up the posting of this letter, so Delphine and I want to add a line to assure you all that we shall be thinking of you—both personal and Association friends—at the rapidly approaching Christmas season. In face of growing world tensions, it is our fervent prayer that the true spirit of Christ-peace on earth, good-will among men—may characterize the hearts of men this Christmas season as never before. We are sorry that this cannot be a personal letter to each one of you, but feel sure you will understand that the pressure of many responsibilities makes this impossible. Drop us a line when you can.

Very cordially yours,

Delphine and Russell L. Durgin

Tokyo, Japan

May day.

Dear friends:

I am writing you this memo at the end of a very eventful day here in Tokyo. I happened to come in to it at the tail end as I was driving down from Tozanso after having finished my series of lectures with the Training Institute of Secretaries which is going on there now. With me I had my secretary-interpreter, Mr. M. Sakai and Mr. Inabe. The trip down was pleasant and uneventful. Everything was quiet until we reached the very center of Tokyo. Had I known what was going on, I would most certainly not have been caught in a very unfortunate position. But as soon as we entered the Metropolitan Area I found that I was in a flow of traffic directed by police and could not turn off the main thoroughfare which led to the center of the city and the palace grounds. Traffic was held up for many minutes as parades with red banners and placards of all sorts passed. At last we reached the very center of the city and were forced to cross the main street and the moat leading directly through the parkway of the outer palace garden. I could see ahead, as our car was stopped for a few moments, that there was commotion and considerable amount of objects being thrown back and forth. But soon the traffic seemed to clear and the police ordered us forward. As we moved into the Palace Park we were stopped on the moat bridge by a tremendous mob of shouting, fighting people. There was nothing I could do but stay in the line of traffic which at this point had stopped.

Our cars were surrounded, but the fighting seemed to be between Japanese people. Many had clubs and were beating each other. Others were throwing huge rocks and some were throwing small fire bombs. We finally moved forward a little off the bridge and were stopped again as the traffic jammed, and I could see that large groups of police were preparing to rush the mob ahead of us through the Park Gate. This led me to be considerably concerned for I saw that we were directly between the mob and the police. At that moment a very nice looking young Japanese motioned our car forward and I moved as far as I could which was only a few feet. Then another wild-eyed individual with a red scarf around his head and carrying a huge club, perhaps 5 feet long, came at us. He swung wildly smashing my front wind-shield on the right and then swinging again smashed the other one across the car on my side. Then after giving the car several bad flaps with the club he moved on. At that time the police were charging and the crowd was being pushed back under the hammering blows of the Japanese police. As soon as possible I drove forward and circled around to see my friend, Mr. J. B. Pilcher, the American Counsul General. I thought it might be wise for him to see what had happened. When I went into his Office and he had come to look at the car he said: "Well, you are lucky, there have been dozens of cars overturned and smashed and several people hurt. This has been going on since 11 o'clock this morning." It was then 3:35. From there I drove to the National Headquarters and after picking up my mail came home. The damage on my car is considerable and I hope that it is covered by insurance.

The shock of this terrific violence in Tokyo is not small. For many of us it is very discouraging and perplexing. There is no doubt that the communist element is here and it should be a good lesson to many of our people who have doubted that communism might show its face in Japan. Very often in

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conditions such as have prevailed in Japan during the last few months, we
were led in a state of quiet assurance based on false assumptions. This
event has proven to those of us who have feared the communist element, that
what we have reluctantly expected has actually come to pass. Though the
city seems to be quiet now at 9 P.M. I still have many fears for the outcome
of this event. It seems quite certain that the bewilderment and the indeci-
siveness of the Japanese people in the last few years has led them to be
easy marks for communistic influence. They do not know which to fear most -
a reaction to complete military and industrial feudalism or communism. It
has appeared to many of us that they have foared the former so much that they
have neglected to bolster themselves against the latter. I feel sure that
there is a very strong middle group who will be vocal in their denunciation
of both. However, we seem to see a rapid split away from the government
of Mr. Yoshida. Personally I have a firm belief that any government set up
during the occupation is bound to give way to a new group who will be able
to claim no affiliation with occupational pressures. We will be watching
this process with some anxiety for we know that our Japanese friends find
it very difficult to be neutral and at the same time effective. I hope that
the days ahead will bring a more balanced judgement on the part of those who
took part in this demonstration today.

One aspect of this whole thing struck me very forcibly. There was not
one Japanese national flag in all of the parades and there were probably more
than a half of a million people parading. I asked one of my Japanese friends
about this and he told me that this day was not a patriotic day at all. In
fact they forgot their very recent independence and gave way to their passionate
hatred of the reactionary forces within the country. He even went on to say
that the Japanese flag stood for militarism and wherever it was flown it
reminded the people of what had taken place in the years gone by. To me that
was a rather strange situation when the Peace Treaty and the beginning of
the new Era for Japan was of such a recent date.

I thought you might want to know of this little episode and meditate
upon it as we consider the future of this very young old nation.

P.S. May 7th.

It is but right that I add a P.S. stating the regrets and apologies
which have come my way since the above happened. I am confident that it was
not Japan speaking that day. It was a foreign voice. A voice which may be
heard at any time and in any place in the whole wide world. This is not a
judgment on Japan.

TAKEO IGARASHI
CHAIRMAN

HACHIRO YUASA
TAKUJI OTSUKA
VICE-CHAIRMEN

TORAJIRO KOBAYASHI
TREASURER

HOWARD L. HAAG
SENIOR FRATERNAL
SECRETARY

21-CHOME, NISHI-KANDA, CHIYODA-KU, TOKYO

CABLE ADDRESS: FLAMINGO, TOKYO.

SOMEI UZAWA
CHAIRMAN

June 12, 1952

Dear Friends:

Someone once wrote that there is enough dynamite in the Sermon on the Mount to blow up everything that interferes with fullness of life for all. Enough has happened in the three months or more since our arrival here in Japan to put at least a moving charge under this lethargic typewriter of ours. I'm not thinking so much about a few fair-sized earthquakes (the one in this area a few weeks ago was the largest in six years), or about the record snowfall on the day we arrived, but rather of a few things in connection with our work and our living that seem worth writing to you about.

After a series of welcome parties and receptions which would have convinced the coldest cynic of the genuineness of his welcome, we were off in the first week to an A.O.S. meeting at Ito. This is a beautiful little sea-coast hot springs town about three hours out of Tokyo. The ten months' study of Japanese previous to coming to Japan helped me to see that the agenda for the conference was comparable to that of a North American Association of Secretaries meeting. But in most ways the resemblance stopped there. Intent concentration, ten hours a day for four days, kneeling on a tatami floor in an unheated room was one somewhat distracting difference. Along with other comparable items, it was proof enough to me then that concern about the 'Y' today, and its contribution to postwar Japan was supremely uppermost in the minds of the sixty-two secretaries there. This impression increases almost daily, by the way, as I watch this movement continue to grow to more than twice its immediate post-war size.

Shortly after this we left for Tozanso (having settled meanwhile in a comfortable Canadian Mission house). Tozanso is the Geneva Park-Silver Bay of Japan in the foot hills of Mt. Fuji, brought back to near peak efficiency with some deeply appreciated World Youth Fund help. After a two day Lay Leaders' Training Conference, we embarked on our major labor, my chief raison d'etre in Japan, a secretaries training institute. For the first time in this post-war period some health, physical education and recreation was included in the training program. To shorten what could easily be a longer tale, I'm looking forward as seldom before in my life to being associated with the young men I worked with there. To cite one example (which may cause a myth to evaporate in your mind as it did in mine) we finished off the last night of the recreation training with a Grand Carnival. None of the secretaries had ever seen nor heard tell of one before, so there was no precedent to go by. I had prepared a few representative "concession" items for the volunteer committee of ten, indicated how they could be

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used, suggested a few more, and the general layout of a Carnival. The result that evening could be described only with Hollywood adjectives. When it was over I wondered who was teaching whom what about recreation. The myth that disappeared at that point was the one about the inability of the Japanese people to do original creative work. Community conscious, the secretaries had invited on their own, people from the neighboring town. Prizes were prepared for children among the guests, all 'concessionaires' were fully costumed, folk music played constantly, a 'floor show' was presented for the players who finished early, and a breath-taking time was had by all.

Before leaving Tozanso, more should be said about physical education and recreation training. There are two ever-present problems in connection with any physical activity program in the 'Y' in Japan today. One is the cost of equipment, the other is space. Only five of our thirty-two 'Ys' here have a gym, and of the remaining twenty-seven, only a few have any appreciable space - or budget - for this type of program. At Tozanso as part of the training we tackled half the problem by making ourselves, out of local inexpensive material: bows and arrows, bowling pins, skiddle sets, 'tip-cat' sets, tether-ball equipment, etc. etc. The way this equipment was used showed conclusively the eagerness there is to find an answer to this double problem.

Next week at the Nagoya 'Y' we initiate the first in an experimental series of small area activities in an attempt to find a solution to the other half of this problem. The 'Y' there has built for us a paved strip 40' x 6', in an area which would normally remain unused. Our recently organized National H.P.E. & R. Committee feels strongly that the 'Y', which pioneered almost all of the major sports in the Far East, may now find it can pioneer an answer to the problem of fuller participation in each community where play areas are at a minimum. This, together with problems and plans in the area of aquatics, folk dancing, etc. tempt me to go on, but this letter is already waxing long.

Word from Japan would not be complete without including something of local affairs. To our already somewhat oriented eyes, much of the surface contrast with North American ways seemed familiar. But a few items stand out in contrast and interest to us still: the efficiency of traffic policemen (superior to their counterparts in any other country of our travels); the refreshing punctuality and relative speed and comfort of trains (in particular contrast to China); the unmatched skill of bicycle riders, balancing multiple bowls of rice or noodles on a tray in one hand while manipulating with nonchalance and speed through thick traffic with the other. Ladies with expensive kimonos and beautiful obis, who (wisely enough) are wearing simple wooden getas over bare or white tabi-covered feet, provide a contrast we still find difficult to ignore with sufficient politeness. In something of the same role we must cast the occasional resident of our respectable neighborhood who returns from the public bath clad only in the equivalent of our long underwear. A recent strike (one of several, past and promised) of transportation workers, showed us the heritage of orderliness of the Japanese. Without any observable direction, people queued long and patiently for non-striking and chartered buses. The little Austin station wagon we bought after arrival here did yeoman duty (eight adults) for a while.

- 3 -

Mention of strikes brings us to other aspects of the local scene.
Japan has just emerged as a free, independent nation, after almost seven years
of occupation. You need only to reverse the roles in your mind to imagine the
emotional repercussions this event has had. Coupled with it has been a literal
enough "tug o'war" over the question of rearmament. Many thoughtful people here,
who disliked every aspect of the last war as heartily as we did, are sincerely
convinced that Japan's best role in world affairs is that outlined in the SCAP-
drafted constitution - an unarmed nation. To it is linked the still tender problem
of the presence of U. S. security troops. The spectre of Korea's wasted cities,
towns, forests and fields, so close at hand makes the question more than an
academic one. With great steel buildings mushrooming in all the major cities of
Japan where before lay the rubble of war; with every effort bent to rebuild a
sound, independent economy, the possibility of becoming the bull's eye for the
Eastern phase of a third world war makes the stoutest heart despair. Thinking
people are thoroughly aware of dangers from within and without. The paths the
government of Japan takes to meet those dangers may be different from those we
think best at times. There is evidence of major decisions made with political moti-
vations. There is genuine danger of the swing away from the left carrying the
country as a whole back too far to an undemocratic right. There is still freedom
to raise one's voice in protest at any of these happenings however, and raised it is
frequently, in press and in person, in private and in public.

It is in this setting that the 'Y' in Japan is working to develop responsi-
ble, democratic-minded leadership. The ground has truly been well prepared in many
ways in the last seven years; minds are open, searching for answers to problems
that dig deep into individual lives. To suggest that the Y's developing program is
a panacea for this country's ills is a presumptuous exaggeration. To say that it is
exerting an influence on individual and community life and thinking far out of
proportion to its size is a true statement. Behind it lies the efforts of men
making a ceaseless sacrifice of their lives beyond that which most of us would con-
sider the bearable point. The work that those of us from North America can do, side
by side with men of this calibre, helps to give concrete substantiation to the
universal hope of mankind that somehow we may all eventually come closer to the
burningly urgent goal of world brotherhood.

In this setting the old Zoroastrian teaching that "It is a sin to do less
than one's best" seems most fitting. We're enjoying doing what we can in the way
that seems best. Now that the scales of disuse have been scraped from this type-
writer, we'll put it into action more often. Please write to us if there is some
particular aspect of life or work here you would like to ask about. Please write to
us anyway.

Sincerely,

September 16, 1952

AMERICAN INSTITUTE OF PACIFIC RELATIONS

DISCUSSION OUTLINE ON

ISSUES IN JAPANESE-AMERICAN RELATIONS TODAY

Now that Japan has regained full sovereignty, the bases of Japanese-American relations need to be reexamined. For many years before 1941 relations between Japan and the United States were increasingly hostile. A growing conflict of interests led finally to a war in which Japan was defeated and came temporarily under American control. Now, with peace concluded, both countries have announced their desire to cooperate for mutual advantage. They must do so, however, in a new and unprecedented situation, created in part by the consequences of Japan's defeat, and in part by the development of acute global hostility between the United States and Russia.

Japan and America have certain interests and aims in common, others which are different but not contradictory, and others which may be in conflict. The immediate problems faced by the two countries are very dissimilar. It follows that, in foreign policy, their objectives cannot be identical, and their priorities are likely to differ. Effective and lasting cooperation for mutual advantage will be possible only on the basis of a realistic appraisal and adjustment of such differences in aim and emphasis.

Such an appraisal is perhaps even more needed in the United States than in Japan, since American aims and attitudes are better known in Japan than Japanese aims and attitudes are in America. Moreover, with occupation controls removed, changes are occurring in Japan, and it is necessary for Americans to study these changes as they develop and to take them into account.

It is already apparent that Japan expects to be treated as an equal and attaches considerable importance to questions of prestige. If the United States wishes to keep Japan as a loyal ally it must recognize this Japanese feeling, and it must give serious consideration to Japan's special needs and problems, some of which are pressing. At the same time, of course, the United States must never lose sight of its own objectives, and it must take account of the attitudes of other allies which, for various reasons, still tend to regard Japan as an economic rival or as a potential political or military threat.

A basic difference between the Japanese and the American approach to foreign policy is that the American aim is, essentially, to preserve an otherwise satisfactory status quo against the threat of Communist aggression, while Japan, although she too fears Communist aggression, can hardly feel satisfied with the present status quo. Moreover, Japan, unlike the United States, faces an acute problem of economic survival and of finding a workable system of political, economic and cultural relationships with her Asian neighbors.

In the following agenda a deliberate effort has been made to emphasize Japanese problems as well as American, and to bring out Japanese as well as American attitudes. It is believed that such an approach will make for a more realistic discussion of the problems faced by the United States in its relations with Japan than would otherwise be possible.

DISCUSSION OUTLINE ON JAPANESE-AMERICAN RELATIONS

I. JAPANESE AND AMERICAN AIMS AND ATTITUDES

A. What are the principal problems, internal and external, faced at present by (1) Japan, (2) the United States?

B. What are the principal aims, both short-term and long-term, of (1) Japanese foreign policy, (2) American foreign policy? Which have highest priority? To what extent do they coincide or conflict?

C. What forms of cooperation, assistance or support does Japan want from the United States? What forms of cooperation, assistance or support does the United States want from Japan?

D. What attitude, or attitudes, toward the United States are found among members of the Japanese government and public? What attitudes toward Japan are found in the United States?

II. POLITICAL AND MILITARY QUESTIONS

A. To what extent is it realistic to assume that both Japan and the United States seek to defend the same basic values: e.g., democracy, individual freedom. How much, and in what ways, have Japanese values been changed by defeat and occupation?

B. What is the Japanese and what is the American attitude toward the following problems and countries? Where divergences occur, how and to what extent can they be satisfactorily reconciled?

1. Communism and other totalitarian movements (a) as an internal threat, (b) as an external threat.

2. The problem of national security.

a. What are the advantages and disadvantages of the existing Japanese-American security arrangements (i) from Japan's standpoint, (ii) from the United States' standpoint?

b. What are the advantages and disadvantages of a Pacific security pact on the lines of NATO (i) from Japan's standpoint, (ii) from the United States' standpoint?

3. Other Asian and Pacific countries.

a. Russia

b. Korea

c. Communist China and Taiwan

d. South and southeast Asia

e. Australia, New Zealand and Canada

f. Latin America

-2-

## II. POLITICAL AND MILITARY QUESTIONS (continued)

C. What is Japan's attitude toward rearmament? Is Japanese opinion divided? Can Japan rearm without extensive American aid? What problems does Japanese rearmament create for Japanese and American relations with third countries? How much and what kind of rearmament for Japan is desirable and possible?

D. What problems are created by the presence of American troops in Japan? How can they be minimized?

E. How strong is the Japanese demand for the return of certain former possessions, e.g., the Ryukyus, Kuriles, southern Sakhalin?

F. What are the prospects for and probable consequences of Japan's admission to the United Nations?

## III. ECONOMIC QUESTIONS

A. What are the elements of Japan's external economic problem?

B. To what extent do Japan's economic needs and goals coincide or conflict with those of the United States in the following areas? To what extent is adjustment possible?

1. Communist China and Taiwan.

2. Korea.

3. South and southeast Asia.

4. The United States market.

5. Other third markets.

6. International shipping, aviation and other services.

7. Labor policy, wage levels and standards of "fair competition".

C. To what extent and in what ways can the United States, Japan and other Asian countries cooperate for mutual advantage in programs (national and international) of economic development?

D. What are the opportunities for and obstacles to profitable American investment in Japan?

E. To what extent can U. S. government expenditures aid Japan to solve her economic problems:

1. Expenditures for maintenance of U. S. forces in Japan?

2. Expenditures for U.S. military procurement in Korea and elsewhere?

F. How far and by what means can Japan reduce her economic dependence on the United States?

As of Nov. 12, 1952

Subject to final revision

NOT FOR PUBLICATION

PRELIMINARY ACCEPTANCE LIST

for

AMERICAN IPR CONFERENCE ON

JAPANESE-AMERICAN RELATIONS

Princeton, New Jersey, November 15 & 16, 1952

Yoneo Arai - Vice President, Japan Society.

Joseph W. Ballantine - Brookings Institution.

George H. Blakeslee - Clark University.

Hugh Borton - East Asian Institute, Columbia University.

Arthur C. Bunce - Division of International Finance, Federal Reserve System.

Frederick H. Bunting - Chief, China-Indochina Division, Mutual Security Agency.

Percy E. Corbett - Center of International Studies, Princeton University.

Frederick S. Dunn - Center of International Studies, Princeton University.

Russell L. Durgin - Japan International Christian University Foundation.

Brooks Emeny - Foreign Policy Association.

Miriam S. Farley - Editor, *Far Eastern Survey*.

Herbert Feis - Institute for Advanced Study, Princeton.

Heman Greenwood - Carrier Corporation.

Douglas Haring - Syracuse University.

William L. Holland - Institute of Pacific Relations.

Lyman Hoover - Committee for a Free Asia, New York.

Philip Horton - Managing Editor, *The Reporter*.

John Howard - Division of Overseas Operations, Ford Foundation.

Harold Isaacs - Journalist. Author: "No Peace for Asia".

Alpheus W. Jessup - McGraw Hill World News, Tokyo.

Arthur Jorgensen - Japan International Christian University Foundation.

Charles L. Kades - Hawkins, Delafield & Wood.

Clayton Lane - Deputy Asst. Director for Far East, Mutual Security Agency.

William W. Lockwood - School of Public & International Affairs, Princeton University.

Shigeo Matsumoto - Bank of Japan.

Robert J. G. McClurkin - Office of Northeast Asian Affairs, Department of State

Edgar McInnis - President, Canadian Institute of International Affairs.

Helen Mears - Author: "Mirror for Americans: Japan".

Shinkichi Minami - Daichi Bussan Kaisha.

David Mitrany - Institute for Advanced Study, Princeton.

T. Miyauchi - C. Itoh & Company.

Toshio Nakamura - The Chiyoda Bank.

John E. Orchard - School of Business, Columbia University.

Douglas Overton - Executive Director, The Japan Society.

Edwin O. Reischauer - Department of Far Eastern Languages, Harvard University.

John Royston - C. V. Starr & Company.

Makoto Saito - University of Tokyo.

Robert Schwantes - Research Fellow, Council on Foreign Relations.

David L. Shillinglaw - Shillinglaw, Bolger & Co., Investment Bankers, Chicago.

Carl B. Spaeth - Division of Overseas Activities, Ford Foundation.

John L. Stegmaier - Department of State.

Harumi Takeuchi - First Secretary, Japanese Embassy.

Tatsuji Takeuchi - East Asian Institute, Columbia University.

David Wadlinger - Institute of International Education.

Gordon Walker - Christian Science Monitor.

Grant Whitman - Standard-Vacuum Oil Company.

Chitoshi Yanaga - Foreign Area Studies, Yale University.

Nagaharu Yasuo - Jiji Press, Washington.

*-observer

Far Eastern Survey
AMERICAN INSTITUTE OF PACIFIC RELATIONS

JAPAN FACES THE FUTURE

Basic Issues in Japan's Foreign Policy

The need for security necessitates collaboration with the West, despite
neutralist sentiment and concern for the economic future.

BY TATSUJI TAKEUCHI

WITH THE COMING INTO FORCE of the treaty of San Francisco on April 28, 1952, Japan regained her independence and full sovereignty, which had been suspended for more than six and a half years of occupation. Freed from the various limitations imposed upon her during these years, she is now able to pursue an "independent" course in the formulation and execution of her own foreign policies. It is the purpose of this brief paper to analyze, from a Japanese point of view, the more important aspects of the basic issues in the foreign policy of Japan at this time.

Throughout this analysis runs the all-important fact that Japan formulates and executes her policies under circumstances created in part as consequences of her total defeat and also in part by the global hostility between the United States and Russia in a bipolarized world. Japan of today is not the Japan of pre-1941 days. She no longer is the power she once was; she does not carry the weight in the world balance of power she once did. She is now a second or third-rate power in both absolute and relative meanings of the term.

The aims and purposes of Japanese foreign policy at this time are dominated by the critical fact of her re-

cent reemergence as a sovereign state. Hence, it is but natural that the immediate issues she is confronted with are those connected with, or arising out of, this fact—how to maintain and develop this recently re-gained independence and sovereignty, how to make the adjustments necessary to equip her to play a role in the family of free nations. There exists neither the will nor the desire to play anything like the positive or militant role she had prior to the outbreak of World War II.

Moreover, the structure of the world body politic—within which frame of reference she now must guide the course of her own foreign policy—is so different

NOVEMBER 19, 1952 VOL. XXI NO. 16

IN THIS ISSUE
JAPAN FACES THE FUTURE

• Basic Issues in Japan's Foreign Policy

by Tatsuji Takeuchi

• Japan's Foreign Trade Problems

by Jerome B. Cohen

• Amami Gunto: Forgotten Islands

by Douglas G. Haring

Mr. Takeuchi, Professor of Political Science and International Relations in Kwansei Gakuin University in Japan, is now at the East Asian Institute of Columbia University as Visiting Lecturer in Government. He is the author of *War and Diplomacy in the Japanese Empire* and other works.

— 161 —

Manchuria with Japanese labor corps—concentrate their energies in the Reversion Movement. Thus they can pose as Japanese patriots—"Deliver pathetic little Amami from slavery to American exploiters! Return us to our Fatherland!"—while causing maximum annoyance to both the Japanese government and the occupying Americans. Long ago, Amamians, overwhelmed with self-pity, dubbed their archipelago "The Forgotten Isles" and the Communists reiterate that theme tirelessly: "We are the forgotten people. We have no homeland, no flag. But Americans cannot enslave us though they cover the land with their jails!"

This sort of talk amuses many of the people, for Amamians have a lively sense of humor. They know that their one jail is far from filled and that few of its inmates are held because of American action; they know that taxes would be heavier under Japan; and they enjoy the camaraderie of Americans.

Hence the more responsible and thoughtful Amamians, while they earnestly long to be rejoined to Japan, refrain from vigorous Reversionist agitation. They say, "Americans treat us fairly and generously. America set the Philippines free; they will turn us back to Japan in time. Meanwhile we should not do anything that could be misconstrued as anti-American." This conscientious reticence, however, leaves the field open to the Communists, who continuously misrepresent America and American motives, and who attain leadership in the Reversion Movement by default and promote it by demagoguery. Thus in March 1952, the five Representatives elected from Amami to the new all-Ryukyu Assembly included one Communist; since then a politician who notoriously curries favor with the Communists has been elected Mayor of Naze. The explanation is that above all else the people desire reunion with Japan: "We dislike and distrust these Communists; but who else is doing anything about reversion?"

Amami Gunto is a tiny speck in a troubled, misnamed ocean. Amamian fishermen often report seeing Russian submarines; this emphasizes the point that Amami's return to Japan is contingent upon US military strategy. There is much evidence that Amamians will cherish a very strong friendship for the United States if they are allowed to rejoin Japan, and that the newly-learned ideals of democracy have taken root. But if strategic considerations render it inadvisable to return Amami to Japan, Americans must act promptly to win and hold the confidence of Amami people; there must be frank explanations in the Japanese language and detailed revelations of the treachery of Communist leadership. Amami may become a sore spot in a strategic area; that danger can still be averted by wise policy, made effective by Americans in Amami who know the language, understand the culture, and like the people.

BOOKS ON THE PACIFIC AREA

THE CONQUERED PRESS. By William J. Coughlin. Palo Alto: Pacific Books, 1952. 159 pp. $3.00.

This is a brief, compact, objective journalistic history of the handling of the Japanese press by General MacArthur's SCAP staff sections during the occupation. Nine chapters are devoted to that subject; one is concerned with an analysis of the SCAP treatment of foreign correspondents assigned to the occupation. The book is in no sense a detailed historical analysis of SCAP press reforms and their vicissitudes, but is rather a summary of events; consequently it can serve as little more than a skillful introduction to a subject that is in great need of exhaustive and thoughtful treatment.

It is difficult to discern any particular point of view—the author appears to have done an admirable journalistic job of presenting the facts on all sides. This is particularly noticeable in his discussion of the famous *Yomiuri* case, which before its conclusion had succeeded in involving the left and the right in both the occupation and Japan in an inextricable tangle in which personal hostilities gradually became the only discernible landmark. The reviewer has heard the story at length from at least two of the principals in the case, and can testify to the balance and relevant selection of facts in Mr. Coughlin's account.

If the author leans in any particular direction, it is toward general approval of the press policies of General MacArthur, General Dyke, Lt. Col. Nugent, Major Imboden, and most of their subordinates. On the whole, he feels that the reforms were sound, reasonably well administered, and did much to "democratize" the Japanese press and newspaper society, and turn back Communist penetration.

The chapter on foreign correspondents is equally objective, and gives succinct details of the several battles royal between Headquarters and such redoubtable newsmen as Keyes Beech, Pete Kalischer, Compton Pakenham, and others.

Ohio State University

JOHN W. BENNETT

FAR EASTERN SURVEY

Editor: MIRIAM S. FARLEY

Editorial Assistant: LESLIE MORGAN

PUBLISHED FORTNIGHTLY (MONTHLY IN SUMMER) BY THE AMERICAN INSTITUTE OF PACIFIC RELATIONS, INC., 1 EAST 54TH STREET, NEW YORK 22, N. Y. GERARD SWOPE, Chairman; WILLIAM L. HOLLAND, Executive Vice Chairman; C. B. MARSHALL, Treasurer. ANNUAL SUBSCRIPTION, $6.00; SINGLE COPIES, 25 CENTS. MICROFILM EDITION AVAILABLE THROUGH UNIVERSITY MICROFILMS, ANN ARBOR, MICH.

The American Institute of Pacific Relations does not express opinions on public affairs. Responsibility for statements of fact or opinion appearing in the FAR EASTERN SURVEY rests solely with the authors. The editor is responsible for the selection and acceptance of articles.

FAR EASTERN SURVEY

357

172

NOTE ON JAPANESE-AMERICAN COMMERCIAL AND FINANCIAL PROBLEMS

by
J. Morden Murphy

*America's basic problem* is whether it is committed to underwriting the viability and stability of the Japanese economy.

*Japan's basic problem* is to secure needed raw materials at prices which will permit it to export finished products under competitive conditions which may in the near future be less favorable than at present owing, among other things, to:

(1) The diversion to commercial export of American production which is now concentrated on Cold War objectives.

(2) Britain's determination to regain and retain its Asian markets.

(3) Asian moves toward national industrial self-sufficiency.

Primary factors in Japan's problem are:

(1) The standard of living, now only 80% of the low prewar level, must be raised if Japan is to maintain democracy and political stability.

(2) Foreign trade is of paramount importance to the Japanese economy, but exports are now scarcely over one-third, and imports one-half, of the prewar level.

(3) To divert a larger part of production to export at the expense of domestic consumption would further depress the already dangerously low standard of living.

(4) To tide over periods of insufficient exports, and to expand the economy, Japan must depend on domestic capital formation or outside capital.

(a) The end of the war left Japan with minimum plant and financial resources, and the post-war years have produced no adequate surplus.

(b) The principal postwar source of outside capital has been the American government, which has been anxious to end such support at the earliest possible moment. But private American capital has hesitated to take up the slack in view of risks both inside and outside Japan, especially the risk of immobilizing funds.

(5) Inflationary techniques are much favored in Japan but are dangerous in the American view.

(6) With the present tendency toward currency inconvertibility, it is necessary to balance imports and exports in any given currency. The political proscription of major trade with eastern Asia has placed the primary emphasis on imports from dollar areas and exports to sterling areas, producing a dangerous lack of balance in foreign currency resources. With reference to price levels in the respective countries and the consequent effect on competitive foreign trade, there is the possibility that, in terms of the yen, sterling may be overvalued and the dollar undervalued.

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The chief present problems for Japan and America seem to be:

(1) The comparative reluctance of American capital to enter Japan is matched by a Japanese fear that American control in specific cases may detract from Japan's independence. Until July 1, 1952, projects for foreign investment were as a rule passed on, case by case, by the Japanese government's Foreign Investment Committee, in an atmosphere not favorable to repatriation of capital or profits. The new law is a great improvement but still leaves much to be desired. Capital may be repatriated only in instalments over seven years, a long time in this unpredictable period of history. The American investor in securities is accustomed to changing plans quickly, and even investment in industrial plant normally supposes the possibility of relatively near-term protective liquidation by sale at a fractional loss.

(2) Under SCAP, American investors had substantial tax advantages, many of which have been reduced in 1952. The present Japanese income and corporation taxes, as they apply to Americans, are a complicated patchwork which will in many cases cause hardship. A tax treaty is now in process of negotiation (a summary of American proposals has been made by the National Foreign Trade Council).

(3) American businessmen in Japan are apprehensive about the growing nationalism observed since the treaty. It is conceded that Japan must work for a viable economy, but some quarters question whether, if present trends continue, there will be any room for substantial participation by American firms in any field where Japanese enterprise operates: e.g., ocean shipping, air transport, insurance, trading, and possibly banking. Already in foreign trade the Japanese are tending to insist on c.i.f. terms for exports and f.o.b. terms for imports.

(4) Conversely, while Americans generally support in principle the efforts of the U. S. government to resuscitate Japan, specific American interests tend to make an exception of their own fields. Examples are the tuna fish tariff incident, and sporadic efforts by shipping interests to restrict Japanese shipbuilding and ocean shipping.

(5) American efforts to improve Japan's international financial position may lead to conflict with other nations also important to the United States. Examples are:

(a) GATT.* The U. S. has already accorded to Japan most-favored-nation tariff treatment, but its efforts to secure Japanese membership in GATT have evoked opposition from Britain and possibly other European countries.

(b) Trade with China versus trade with southeast Asia and the Commonwealth. The U. S. is trying to find substitutes for Japan's China trade in other areas in Asia and Latin America. Great Britain, fearful of Japanese competition in these areas, appears to take a more favorable

* General Agreement on Tariffs and Trade

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attitude toward Japanese trade with eastern Asia. This conflict may
come to a head if the U. S. promotes the principle, already proposed
by the Japanese, of Japanese-American cooperation in south and
southeast Asia. Steps in this direction have already been taken in
limited "offshore" purchases from Japan for MSA and TCA programs in
other Asian countries.

(c) American efforts to secure Japan's admission to the United Nations are said to have met with some resistance in quarters other than the Soviet Union.

(d) Reparations. While conceding that the Philippines, Indonesia and other countries are entitled in principle to reparations, the U. S. is aware that their full claims could be met only out of the pocket of the American taxpayer.

November 14, 1952.