894.00/538
The Ambassador in Japan (Grew) to the Secretary of State
[Received December 28.]
Sir: For some years Japanese industry has been developing very rapidly. The most noticeable advance, so far as the outside world is concerned, has been made in the textile field. Japanese cotton goods and a variety of other articles such as bicycles and cheap toys and notions are exported in large quantities to many countries. At the same time there has been an intense development in many other lines which have not come prominently to outside attention because they do not enter greatly into international trade.
These developments have coincided with an exceptionally strong wave of nationalism. This tendency is world-wide, and in following it Japan is merely in the fashion. It is, however, a fashion to which the Japanese take kindly. All through their history they have alternated between periods when outside contacts were welcomed and periods when efforts, more or less successful, were made to cut off outside contacts and develop internal economy without them.
These periods have usually coincided with periods of activity among foreign nations with whom Japan was thrown in contact. For example, Japan accepted Chinese civilization and culture almost at a gulp during the T’ang era. When the glories of this reign began to fade and the Japanese felt that they had nothing more to learn from China, intercourse was restricted. The Japanese set to work to develop what they had obtained. During the Mongol period (Yuan) in China, the Japanese were engaged in defending themselves from invasion. During the Ming period, intercourse with China was again renewed, which resulted in increased industrial and cultural activity in spite of the unsettled political conditions in Japan at this period. [Page 685] About the middle of the 16th century Western civilization began to exert an influence on the Japanese, stimulating them to greater efforts. These activities culminated in the invasion of Korea and the sending of a number of missions of investigation, as we should call them today, as far away as Europe. The decline of the Ming dynasty in China, and the intense rivalries among European nations coincided with the nationalism of the Tokugawa era in Japan when foreign intercourse was shut off for over two hundred years. This seclusion was broken down from the East, where the descendants of the Europeans had conquered the American continent and set sail from the eastern shores of the Pacific to find the Far East once more.
The nineteenth century was a period of great intellectual, political and industrial activity in Europe and America. It is noteworthy that it coincided with great developments in Japan, who welcomed intercourse with the West, and set herself to learn from Europe and America, instead, as she had previously done, from China and to a lesser extent from Korea.
The World War and its aftermath—intense national hatreds, bankruptcy and political instability in the West—together with great industrial development in Japan, have combined to lead many elements in the country to think that perhaps they have learned all that the West has to teach them, and that it may be better to reduce foreign contacts to a minimum and develop a Japanese milieu more suited to their needs.
This point of view coincides with the world craze for what is termed self-sufficiency, and has made the task of the intense nationalists much easier. They point to efforts made in many quarters to keep out Japanese imports as evidence of the superiority of Japanese products and assure their fellow countrymen that Japan has made such progress that Western civilization has nothing further to offer and Japan has no longer any need for foreign teaching. This nationalist urge manifests itself in many ways. It is largely the basis of the Japanese demand for naval parity; it runs through the Japanese insistence upon Japan’s superior or special position in China: China was once Japan’s teacher and must be made to realize that Japan has thrown off all leading strings and is equal to any one, East or West. The East, with Japan as leader, will set up a balanced economy to offset Western aggression.
As would be expected, the nationalist or exclusivist tendency is more noticeable in Army and Navy circles than elsewhere, although it would be a mistake to assume that the armed services are exclusively nationalist or that the civilian population is free from the tendency. The Army and the Navy however are pretty thoroughly imbued with it. Their influence in this direction is manifested in many ways, [Page 686] especially in the industrial field. One example will illustrate the (to us) absurd length to which it is pushed. Some months ago General Motors, who have an assembly plant in Osaka, decided that they would enlarge their establishment, as they have reached the limit of production with their present equipment. With the idea of inviting Japanese participation, they offered to sell stock in the Japan company to one Aikawa, Managing Director of the Kuhara interests. The arrangement has been held in abeyance, however, because the company has been unable to obtain permission to purchase New York exchange for the amount they are to be paid. The Department of Commerce and Industry has been unwilling to issue a certificate that the transaction was non-speculative, due, it is stated, to Army opposition. The Army is promoting the manufacture of a Japanese-made automobile, and desires Kuhara cooperation in this direction rather than their association with a foreign concern. Similar instances of opposition to the growth of foreign interests have been frequent of late.
Many Japanese who are in sympathy with this movement realize that the Japanese product will not be as effective, but they are persuaded that these are emergency times, that the country is in danger and that a Japanese product will serve their turn for the moment. Others again resent what they term exploitation of Japan for the benefit of the foreigner and would honestly prefer no export trade in this type of article to having industry in Japan in any degree subject to foreign control. These forces are now operating in feverish haste to produce in Japan everything which the military decides are key industries or articles “necessary to the national defence”. The country is on an emergency footing, and the determined effort to be “selfsufficient” is absorbing a large part of its energies.
This state of mind is being made use of, naturally, by many industrialists who see in it an opportunity for themselves. It seems probable that some of the present oil difficulties, for example, are in a measure due to the influence of a few men in the oil refining business who believed there was an opportunity to get rid of foreign competition in the sale of refined petroleum.69 It is significant that the President of the Japan Oil Company is a member of the House of Peers, as well as President of the new “Manchukuo” Oil Company.
There are, of course, men of vision in Japan who are aware of these considerations. They realize that Japan is, and in the nature of things must continue to be, dependent on the outside world for many things, especially raw materials, necessary to the country’s industrial life. They understand that technical assistance and international [Page 687] cooperation are needed if Japan is to continue on the path of industrial progress. They are, however, helpless in the face of what amounts almost to national hysteria. For the moment they feel unable to make long range plans for industrial development which involve extensive cooperation with foreign interests. They believe that public opinion would not countenance it, and what is more, they might have difficulty in negotiating much profitable business with the Government.
It seems unlikely that this situation will continue indefinitely. If it continues Japan will find herself more and more falling behind the West as contacts are reduced. In the past few months a number of new projects have been broached by representatives of foreign concerns which have interests here. They are anxious to enlarge their interests, to introduce new methods and bring their equipment up to date (the case of General Motors, cited above, is one example). Their Japanese associates realize the need for it, but are unable to give clear cut replies or to take on new responsibilities. They are becoming uneasy and in some cases interested Americans have come to the Embassy for advice. They have been told that they would have to be patient and await developments; either the present tension would ease, or there would be a violent alteration in the course of things—a war, which seems improbable at the moment, or some political overturn which it is impossible to foresee. It seems out of the question to look forward at this time to a return to the seclusion which Japan practiced at an earlier period. None the less, a determined drive is on at the moment to regain, so far as may be, the independence of foreign influence which the nationalists feel has been lost, to the Empire’s great shame.
Respectfully yours,