761.94/786
Memorandum by the Ambassador in Japan (Grew)91
Chinese Eastern Railway.
In conversation today with the Soviet Ambassador I asked if there were any particular developments or facts concerning the negotiation [Page 270] for the sale of the Chinese Eastern Railway other than those which had appeared in the press which he might be willing to tell me. Mr. Youreneff replied that in spite of the Japanese statement that the negotiations had only been adjourned, they were in fact broken off de facto. He said that the termination of the negotiations had at least eliminated from the scene Mr. Ohashi who was an ignorant and obstructive element and had been brought into the negotiations only at the insistence of the Japanese military in Manchuria. He thought that Mr. Hirota was equally glad to get rid of him.
I asked Mr. Youreneff whether the failure to come to terms on the sale of the railway was not more a question of prestige and a desire to achieve a moral victory than a mere question of price because the Soviet demand and the “Manchukuo” offer were now separated only by the comparatively trivial difference of ¥40,000,000. The Ambassador replied that the Japanese were great bargainers where money was concerned and that Mr. Hirota when Ambassador to Moscow had haggled for a long time with the Soviet Government over a matter of a mere ¥500. I asked the Ambassador if there was any indication as to which party would take the next step in reopening the negotiations, to which he only replied that this could not at present be foreseen.
In this connection Mr. Youreneff expressed a high opinion of Mr. Hirota for whom he said he had genuine admiration. He said he considered him a very able and shrewd negotiator but a great deal pleasanter to deal with than Count Uchida who was merely a mouthpiece of the Japanese military.
General Relations.
The Ambassador said that he thought there was little danger of a Soviet-Japanese conflict at the present time. The Soviets were very strong in Siberia and Vladivostok and were prepared for any eventuality. Even if some inflammatory incident should occur, he thought it could be localized, especially because the Japanese Army in Manchuria was by no means in condition to take the offensive at present. He said he also considered Japan’s military were much more in hand than during the regime of General Araki and that the Emperor and his entourage were very much stronger and much more able to dictate a sane policy for the nation. He thought that the recent withdrawal of Admiral Suetsugu from the command of the Fleet and his replacement by Admiral Nagano was a very important indication of this strength and presaged a desire for a conciliatory policy in the coming naval negotiations. Mr. Youreneff did not seem to know whether Admiral Suetsugu was to be given another assignment or not.
While the Ambassador avoided saying that he was either pessimistic or optimistic about the general situation, his remarks gave me [Page 271] the impression that he was not particularly anxious as to the outlook at the present time but rather that he thought matters were improving.
Arrest of the C. E. R. Employees.
Asked about the significance of the arrest of a large number of the Soviet employees on the C. E. R, Mr. Youreneff did not seem to attach any great importance to the incident. He of course said that they were absolutely innocent of the charges against them and that on the contrary there was definite evidence that the sabotage complained of had been carried out from other quarters. He said it was particularly significant that the railroad cars carrying Japanese guns and other military equipment had suffered no damage.
Eastern Locarno Pact.
The Ambassador then turned to the situation in Europe and said that the Eastern Locarno Pact would undoubtedly go through but that it was not at all sure that Germany and Poland would participate therein. He thought that Poland was playing a very dangerous game and that her political intrigues might land her in a most embarrassing position especially if war should eventually break out between France and Germany. He felt that Poland was steering a very nebulous course and that her intentions were far from clear.
Soviet Russia and the League of Nations.
I asked the Ambassador if he felt that Soviet Russia’s entry into the League of Nations was assured, to which he replied definitely in the affirmative. I asked about the reported objections of Switzerland, to which he answered that if Switzerland proves intransigent the other powers would simply move the League to Vienna—a step which they had seriously considered three or four years ago. This would have the great advantage of preventing any possibility of the Anschluss materializing and would be an important advantage to several of the great powers from many points of view.
Anglo-Japanese Alliance.
The Ambassador asked me what I thought about the rumors of an Anglo-Japanese Alliance. I told him what I knew about the rumors and said that while it was easy to build up an academic case to justify the rumors I had nevertheless no evidence whatever that they had any foundations in fact and that on the contrary I doubted if any definite negotiations for a rapprochement had taken place. The Ambassador said he agreed with me and that he also had no information but he thought that England’s situation in the Far East at the present time might well give her cause for concern. He said he was inclined to think that the alleged unimpeachable source of Fabius’92 information [Page 272] was the Foreign Office which had put the matter out as one of its customary “trial balloons”. He asked me if I knew anything definite about the British Industrial Mission to “Manchukuo”, to which I replied that I had no reason to believe that it had any political significance whatever. The Ambassador concurred.
Mr. Chevalier.
The Ambassador asked me if I happened to know Mr. Chevalier, a Belgian subject, who lives in Tokyo. I said I knew him but knew little about him. The Ambassador said he understood that he was trying to put through some kind of a deal for furnishing railway equipment, particularly rails, to the “Manchukuo” Government but he believed he was a poor man and did not think he had any particular backing.