As a result of the Japanese Ambassador telephoning to me last
Friday asking when our next tea party was to take place, he came
to my flat at 5.0 p.m. yesterday afternoon when we had a further
long conversation.

The Ambassador opened by expressing his appreciation of the Prime
Minister's speech at the Foreign Press Luncheon [1], and told me
that it had been very well received in Japan. He went on to state
that in his view the speech would be helpful in achieving the
objective which he had indicated that he was aiming at when we
last met, namely, an improvement in the Empire's relations with
Japan and a calming of the unfortunate atmosphere which had
recently been created.

I told him that I was glad to hear his view of the speech and of
the reception it had received in Japan because he had probably
seen from the Press that it had been the subject of some criticism
in Australia.

I told him that that criticism had arisen from a misunderstanding
which had been cleared up now, and it was realised that the speech
in no way conflicted with the recent statement by the Advisory War
Council [2] but in fact confirmed that pronouncement. It had added
the statesmanlike view that the difficult situation existing in
the Pacific must not be regarded as making war with Japan
inevitable, but that our two nations should face up to the
existing difficulties and deal with them in an atmosphere of
reality.

I told the Ambassador I was in entire accord with the views
expressed by the Prime Minister but that there was one reality
that it seemed to me we had certainly got to face because I felt
it had in it grave possibilities of creating a situation which
would render extremely difficult the realisation of the desire I
knew he had so much at heart of promoting a better understanding
between the British and Japanese peoples and ensuring that no
untoward event would occur in the Pacific.

I said that reality was the visit of Mr. Matsuoka [3] to Berlin
and Rome, as well as, I understood, to Moscow. I reiterated to him
what I had said in our previous interview namely that it seemed to
me difficult to expect any other result than the visit to Moscow
being regarded as an effort to arrive at an understanding with the
Soviet that would remove from Japan any apprehension of a menace
in that direction, and the visit to the Axis capitals as a step
towards closer and more definite collaboration by Japan with our
enemies against whom we were carrying on a desperate struggle.

The Ambassador suggested that there was no justification for any
such view. He again indicated his conviction that no satisfactory
arrangement could be arrived at with the Soviet, implied that
there were many questions with regard to which the interests of
the Soviet and Japan were irreconcilable; referred to the fact
that many of these questions had been outstanding since the days
when he personally, as Vice Minister for Foreign Affairs, was
closely associated with relations with Russia, and made quite
clear his feelings of contempt for and distrust of the Russians.

With regard to the visit to Berlin, he suggested that this was
only a somewhat belated carrying out of an implied undertaking
given at the time when the Axis agreement was signed, and
expressed his confidence that Mr. Matsuoka would not, during his
visit, commit Japan to any definite action in support of the Axis
Powers.

He again repeated what he has said to me so often that Japan was
the judge of her own actions under the Axis agreement, that it in
no way obligated Japan to enter the war on the Axis side, and that
it was Japan's firm intention not to do so unless she was forced
into such a position.

I told the Ambassador that I appreciated all that he had said with
regard to Mr. Matsuoka's visit but I still adhered to the view I
had expressed that it would greatly increase the difficulties of
the position and that for my part I sincerely regretted that it
had been undertaken.

The Ambassador said that he quite recognised that the view I had
indicated would be taken by some people, and added that some
people even believed that there were secret provisions to the
arrangement with the Axis, under which Japan was to come into the
war on the Axis side at a selected moment. Such a suggestion he
said was entirely without foundation.

I then put it to the Ambassador that Japan's arrangement with the
Axis appeared to me to be far from an advantageous one to Japan
and I asked him flatly what were the reasons that had led Japan to
enter into it. Rather to my surprise the Ambassador launched upon
a long and detailed reply. The substance of which was as follows.-
The Manchukuo adventure was started by Extremists and
irresponsible elements in the Army, but was, when successful,
endorsed by the whole Japanese nation because it was felt that if
Japan was to protect herself against the menace of the Soviet it
was necessary to obtain a foothold upon the mainland. The Soviet,
however, was equally determined that Japan should not obtain such
a foothold. As soon as Japan had established herself in Manchukuo
the Soviet commenced to stir up feeling in China against her by
propaganda and communist infiltration. The Soviet progressively
created a situation which economically it was impossible for Japan
to tolerate and which was making Japan's position even in
Manchukuo extremely dangerous.

The Ambassador suggested that it was the Soviet's machinations
which forced upon Japan the China adventure, but stressed that
that adventure was only undertaken in order to protect Japan's
vital interests and economic position. Notwithstanding this being
the position Japan, both in regard to the Manchukuo incident and
the China adventure, was denounced by the United Kingdom and the
United States of America as an aggressor. Press campaigns in both
countries were launched against her and unceasing attacks were
made upon her at the League of Nations. In contrast to the
hostility shown towards Japan by the United Kingdom, the United
States of America and the League of Nations, sympathy and
understanding had been shown towards her by the Axis Powers. He
instanced as an example the attitude of Italy at the Brussels
Conference.

These things had caused grave resentment in Japan but the
Ambassador suggested that notwithstanding this the Japanese, under
great provocation, had been extremely patient. Since the outbreak
of war stringent action had been taken to prevent any supplies
from, or via Japan, reaching the enemy we were fighting, and yet
at the same time we, and the United States of America, were
supplying every form of assistance which we were able to render to
the enemy against whom Japan was fighting.

All these factors rendered the task of holding the Japanese
extremists in check extremely difficult and this became almost
impossible when France collapsed.

The Ambassador referred to the fact that after that collapse the
general impression was that Great Britain would be defeated in the
course of two or three months and even the American Press was
saying so openly. This, the Ambassador said, without giving the
reason why, rendered the position even more difficult. He said
that notwithstanding all these things the Japanese were loath to
enter into any close relations with the Axis Powers and suggested
that two if not three Governments in Japan had fallen in their
attempts to resist the pressure to do so. The pressure, however,
in the end became too strong and last September the Japanese
Government had entered into the arrangement with the Axis Powers.

He stressed that it was not intended that that arrangement should
lead to Japan becoming involved in the war. He, however, did not
make clear what it was, in fact, intended to do. He finished by
emphasising that Japan regards this war as a European war and that
her whole desire is to keep out of it.

The above is a very abbreviated summary of the exposition lasting
quite half an hour which the Ambassador gave me of the causes
which had led Japan to enter into the Axis arrangement but
contains the important points he made.

When the Ambassador had finished I told him I had been most
interested in the very full information he had given me as to the
Japanese point of view and that I was most anxious to be certain I
had understood what he had told me. I would therefore attempt to
summarise it and would ask him if I had got any of it wrong to
correct me.

I then summarised what he had said as follows.-
That Japan had regarded Manchukuo as vital to Japanese security-
they had therefore felt compelled to take action with regard to
Manchukuo, but had contemplated following that up by attempting to
arrive at an understanding with China which would have led to
Sino-Japanese cooperation economically and otherwise. That the
achievement of this understanding had been defeated by Soviet
propaganda, intrigues and communist infiltration into China; that
to protect Japanese vital interests against Soviet action and to
safeguard her economic position, Japan had started her Chinese
adventure. That deep feelings of resentment had been caused in
Japan by the attitude of the British Empire and the United States
of America, and the actions of the League of Nations. That these
feelings had been deepened by the help afforded by the United
Kingdom and the United States of America to China and that this
latter had been intensified by the fact that Japan desired to
liquidate the Chinese adventure but saw no hope of doing so by any
co-operation from the United Kingdom and the United States of
America.

That some hopes of doing so were entertained by Japan as a result
of action by Germany-that these hopes, the Ambassador admitted,
had been illusory as Germany had not the expected power in this
direction-that the situation had become even more difficult
politically in Japan with the collapse of France and the freely
expressed anticipations that the British Empire would rapidly
share France's fate. That a combination of all these circumstances
had led to Japan entering into an arrangement with the Axis
Powers.

The Ambassador indicated his agreement with the summary I had
given him of what he had said to me.

I then said to him that I quite understood what had led to Japan
linking up with the Axis and that it seemed to me there were four
directions from which the pressure had come. I said those four
were.-
(a) The resentment engendered by all the happenings since 1931
which he had recited to me.

(b) The conviction that it was hopeless to expect any help in the
liquidation of the Chinese adventure or any adequate recognition
by the British Empire and the United States of America of Japan's
economic requirements and need of a market for her growing
industrial production.

(c) The feeling that the British Empire was going to be beaten in
the war and that Japan would be well advised to link up with those
who would be responsible for the creation of the new order in the
world.

(d) The conviction in certain Japanese minds that neither the
British Empire could beat Germany, or Germany could beat the
British Empire, with the result that the war would end in a
stalemate and that under these circumstances Japan would be well
advised to grab what she could while the going was good in the
hope that the great Western Powers would be too exhausted when the
struggle finally terminated to take any steps to oust Japan from
what she had seized.

I said that the last of these motives was perhaps not as
respectable as it might be, but that happily our conversations
were so frank that I could mention it. In any event whether it was
respectable or not we both knew human nature well enough to
appreciate that it would be a point of view that would influence
some.

The developments in the position, however, now showed that this
argument was not a sound one, as the war inevitably was going to
be fought to a finish. This point I had talked to him about when
we had last met, stressing that the British Empire would never
give in and America would be forced to come into the war if it
looked as though the British Empire might go down.

At this point the Ambassador rather surprised me by interrupting
to say that he quite recognised that, and adding that even if the
British Isles, contrary to expectations were overwhelmed, the
Dominions would fight on in conjunction with America.

His saying this somewhat startled me, and it certainly encourages
the hope that some of the very frank statements I have made to the
Ambassador have sunk in.

After this interruption I followed up the argument I was
developing by saying that I wanted to put to the Ambassador the
position as I imagined I would see it if I were a Japanese and
recognised the fact that no compromise settlement was possible but
that the war was going to be fought to a finish.

I suggested to him that in doing so I would have the background
that in the past I had shown some appreciation of the Japanese
point of view and some understanding of, and sympathy with, the
Japanese attitude as to the frustration they felt they had been
subjected to in safeguarding their vital interests both as to
their security and economic and industrial requirements.

I then put it to him that my first thought as a Japanese would be
to consider what policy would best serve my country-
(a) during the continuance of the war and
(b) after the war was over.

With regard to (a) I would feel the thing I desired to achieve
would be to keep my country out of becoming involved in the
struggle unless I could see some great advantage flowing to it
from joining in.

I would also have in mind the desirability of liquidating the
Chinese war and ensuring my country the necessary supplies to keep
her economic life going.

I would feel that an increasingly close co-operation with the Axis
Powers would eventually land me in the war on their side. Even if
it did not take me quite as far as that I would feel that it would
mean an increasing measure of help to China by the British Empire
and the United States of America, and an increasing exercise of
economic pressure by these Powers against my country. When I
looked forward and visualised the effect of that increasing help
to China and increasing economic pressure I would feel
considerable anxiety and would at the same time recognise that my
Axis friends would be in no position to help me in respect of
either of these matters.

On the other hand I would feel that if I took a restrained
attitude towards the Axis and worked for a better understanding
with the British Empire and the United States of America it might
be possible to improve my position both with regard to China and
economically.

With regard to (b)-post war period-I said I would feel I had to
face the alternatives of a British Empire victory, or a German
victory.

In the event of the former I should have some anxieties as to
whether the British Empire and the United States of America would
show a greater understanding of my vital interests and
requirements than they had in the past.

I would, however, have some hopes that they would and would be
encouraged in this hope by the many signs there are of a growing
appreciation of the necessity of a new order after the war which
will afford increased opportunities both to Nations and
individuals.

I would also weigh up the assurances that Hitler would be prepared
to give, such as recognition of Japan's leadership in the Far East
and full economic opportunities.

After weighing up these assurances I would cast them aside as
worthless knowing, apart from Hitler's past record of repudiated
undertakings, that if Germany were triumphant she would be so
powerful that she could force her will upon the whole world and
would impose her Nazi domination as ruthlessly and as effectively
in the Far East as she would impose it upon Europe.

Weighing the whole position up I would come to the conclusion that
my wiser course was to trust the British Empire and the United
States of America to show more vision and understanding after the
war than they had in the past, and to give my country a fair deal.

I would be reinforced as to the wisdom of this view when I
remembered that if the Allies won and my country had thrown in its
lot with the Axis, public resentment in the Allied countries would
overrule wiser statesmanship and this hostile feeling would result
in a settlement disadvantageous to the interests of my country.

On the other hand I would be certain that with Germany triumphant,
Hitler would show no gratitude to Japan, even if she had
contributed materially towards his winning the war, but would
impose his will ruthlessly upon her.

I said, after weighing all these considerations up my considered
judgment would be that Japan's best course would be to trust the
Allies and keep out of the war.

I added that I felt an even better course would be to trust the
Allies and come in on their side, but that, for the moment, was
perhaps going too far, although the situation might develop to the
point where that became a practical possibility.

I said that if Japan definitely decided upon a policy such as I
had indicated, I was quite sure that the British Empire and
America would be prepared to talk frankly with her during the war
and give assurances as to their attitude after the war.

I told the Ambassador that the more I thought of the Far Eastern
situation the more I felt that however right from Japan's point of
view the arrangement with the Axis last September might have been,
it had now become, owing to the certainty of the war being a fight
to a finish, with America a participant if necessary, an
unfortunate commitment. For that reason I reiterated my deep
regrets at Mr. Matsuoka's forthcoming visit to the Soviet and
Germany.

The Ambassador took this somewhat unconventional outburst of mine
quite calmly and in reply to the point I had been working up to,
namely, Matsuoka's visit to Berlin, reiterated that I was
attaching too much importance to it and its effect. He insisted
that the visit was partly courtesy and partly to let Mr. Matsuoka
obtain his own first hand impressions of the position in Europe.

We then went on to discuss what practical steps could be taken to
ease the situation. The Ambassador made it clear that in his view
the greatest necessity was to bring about here a better
understanding of Japan's position and thus create a better
atmosphere for handling the difficulties which exist and will
arise in the future.

When discussing this point I discovered that the Ambassador had
been in close touch with George Lloyd [4] before he died and is, I
think at the moment, in contact with Hankey. [5] This I will check
up. He also clearly thinks something can be done with the
Dominions and at this stage I left no doubts in his mind that we
are absolutely at one with the United Kingdom and the appointment
of Latham [6] in no way indicated our taking a diverging line, but
was to ensure the closest possible co-operation between the United
Kingdom and Australia on all Far Eastern questions.

Towards the end of our conversation, I got the impression the
Ambassador was working up to suggesting his seeing the Prime
Minister. [7] As I saw some embarrassments in this I rode him off
and he did not do so. Whether it was only my impression or he
actually had it in mind I am not sure.

As usual we parted most amicably and with the idea that we should
have another 'tea party'. [8]