Foreign Relations of the United States Diplomatic Papers, 1937, The Far East, Volume III

793.94/11438: Telegram

The Ambassador in Italy (Phillips) to the Secretary of State

Rome, December 3, 1937—5 p.m.
[Received December 3—2:15 p.m.]

499. Viscount Ishii,⁷⁴ who is on his way to London to explain the Japanese viewpoint, had a conversation yesterday with my British colleague⁷⁵ who is an old friend of his from Geneva days. I am forwarding by pouch a copy of Lord Perth’s memorandum of this conversation⁷⁶ which includes the following points.

(1) While Chiang Kai Shek had been strongly anti-Communist and had been successful in ridding the provinces near Nanking of Red elements a number of his advisors were thoroughly sympathetic to the Communist theories and unfriendly to the Christian General⁷⁷ and the Young Marshall Chang Hsueh Liang. When Chiang Kai Shek was the prisoner of the Young Marshal a part of the agreement with regard to the former’s release was that there should be cooperation with the Communists against Japan. Chiang Kai Shek being an honorable man had performed his part of the bargain although he himself does not believe in communism. Communist theories on the other hand are likely to attack Chinese peasants because of their eagerness to possess land.

2. With regard to internal economic and financial difficulties there were two problems: (a) How to provide for the continuing increase in Japan’s population, and (b) Where to export Japanese manufactured goods and obtain the needed raw materials. As a result of difficulties in obtaining raw materials abroad Japan had decided that she must secure such material in China and it was therefore essential for Japan to lease territory as well as to cultivate raw materials especially cotton, in North China. If the Japanese needs along these lines could be met there should be no reason why a satisfactory settlement could not be arranged which would give full consideration to foreign interests in China. Japan had no desire for territorial annexations but only needed raw materials produced on lands leased through the medium of companies set up with Chinese and Japanese capital. Chiang Kai Shek knew of the Japanese terms as regards North China but could not meet them because of popular sentiment.

3. Japan could never be a Fascist state since Fascist theories are entirely opposed to the Imperial nature of the constitution of Japan.

Phillips

74. Former Japanese Minister for Foreign Affairs; member of Privy Council.
75. The Earl of Perth (Sir Eric Drummond), British Ambassador in Italy.
76. Despatch No. 685, December 3, not printed.
77. Marshal Feng Yu-hsiang.