Dispatch S-35 (extracts) TOKYO, 30 March 1941

CONFIDENTIAL

I have the honour to report that articles in the Japanese press in
the past few days show that the Japanese feel greatly flattered by
the reception given to the Minister for Foreign Affairs, Mr.

Matsuoka, in Berlin. [1] The reports of his reception and of the
speeches made by Herr von Ribbentrop [2] and himself have resulted
in a great display of enthusiasm for the Axis cause. Japanese
interests are regarded as essentially bound up with the success of
German policy and a German victory is confidently anticipated. One
of the results of such a victory will, it is considered, be the
establishment of Japanese domination in 'East Asia'. 'East Asia'
is, of course, a flexible term. It includes, according to
circumstances, not only Manchoukuo and the South Eastern part of
Asia as far as Malaya, but also, generally, the Dutch East Indies,
and frequently Australia and the whole of the islands in the
Western part of the Pacific, i.e., New Guinea, New Caledonia, New
Zealand and Fiji. The successful establishment of the East Asia
policy is regarded as involving the disappearance of British
interests from this part of the world.

[matter omitted]

7. It does not, however, follow that the general policy to which I
have referred will be put into operation.

In the first place there is, I am informed, a substantial section
even of the Army which regards the present national policy as
inflated and impossible and unwise, although this section is not
at present in control.

Secondly, the position of the Government is not too secure. The
Premier, Prince Konoye, is admired more for his virtue than for
his intelligence and executive ability. The Government has been
criticised to quite a considerable extent for indecision and
confusion, though this criticism, it must be conceded, has been
confined to internal policy.

Thirdly, the commercial, financial and industrial interests must
be relied upon if Japan engages in any further belligerent
adventures, and when the time for action came their doubts and
hesitations would probably have a certain effect. As against this,
however, it must be remembered that the Japanese Army has a habit
of creating a situation from which the Government finds it
impossible to withdraw, and so in effect the Army, by unauthorised
action, really determines Government policy. Such action is not
regarded as really irregular in Japan because the Army and Navy
are not controlled by or responsible to the Government. They are
controlled by and are responsible to the Emperor.

Fourthly, the actual economic situation in Japan is such that any
responsible Government would, in my opinion, hesitate before
committing the country to any major war. I have recently in my
despatch No. S-27 [3] given some information with respect to the
economic position of the country. As I have said in that despatch,
it is difficult to form an accurate judgment of the position, and
it is of course a commonplace today that under the influence of
war a nation becomes capable of efforts which a priori would be
regarded as quite impossible. But the strain upon the internal
economy of Japan is such that I am sure that it would be very
difficult indeed for Japan, subjected to a long distance blockade
by America, to maintain even a poor standard of feeding for the
people of the country. The rice position is already causing
serious anxiety. If imports of rice and of cereals otherwise than
from the neighbouring parts of the Asiatic continent were
prevented, the food position would become very acute. There are
already queues at the food shops in Tokyo.

Fifthly, if Japan became involved in war with Great Britain or
America, and had not succeeded in adjusting relations with Russia,
there is little doubt that Russia would seize the opportunity to
make some territorial gains in Manchuria and possibly elsewhere.

The fear of Russia is a constant element in the mind of the
Japanese Government, as I have noticed on several occasions in
conversations with Mr. Matsuoka.

Sixthly, the China affair is a very serious drain upon the
military and economic resources of Japan. Any serious belligerent
operation elsewhere would jeopardise the rather precarious gains
which Japan has made in China, and, apart from this consideration,
would increase the already very serious economic strains to which
Japan is subject.

Seventhly, the fear in Japan of aerial bombardment is intense. The
cities are largely built of flimsy wood, and a few incendiary
bombs, especially upon a windy day, would work widespread havoc
and destruction. The destruction would be incomparably greater
than in European cities. Most streets are very narrow, the water
supply is most inadequate, and it is most unlikely that any
effective anti-aircraft defences would be in operation in most of
the cities. Accordingly, an attack by a few bombing aeroplanes
from aircraft carriers might have disastrous and decisive results.

It is impossible to believe that the Japanese military authorities
are not aware of this position. Seven years ago, when I was in
Japan, I became aware of their intense anxiety with respect to the
possibility of air attacks from Vladivostok. The considerable
development of aircraft carriers in recent years will certainly
have increased that anxiety.

Accordingly, there are many reasons why responsible elements in
Japan, and even the Army itself, would hesitate before running the
risk of further war, and more particularly and especially a war in
which the United States would be an enemy. I emphasise again that
all Japanese fears and apprehensions would be greatly increased if
the position of Soviet Russia were undetermined at the outset of
such a conflict.

8. Although the Government, the press and the publicists of Japan
speak very confidently of a German victory and of the Japanese
CoProsperity Sphere in East Asia, there is, in my opinion, a
considerable element of pretence or bluff in their emphatic
assertions. The extravagant rejoicing over the rather commonplace
efforts of Mr. Matsuoka in the Indo-China-Thailand mediation
indicates something of the real uncertainty which underlies the
bombastic pronouncements of policy to which I have referred.

The clear and definite refusal of the Dutch East Indies to be
included in any Co-Prosperity Sphere under the leadership of Japan
provoked angry recrimination at the outset. The chorus of
objection and resentment however soon died down, and there is now
a recognition that there may be some difficulty in establishing
domination over the Dutch East Indies.

Various steps taken by other powers in February had a very
valuable effect in reducing Japanese exaltation. The movement of
troops to Singapore, the mining of the seas in the neighbourhood
of Singapore, the air reinforcements in Malaya, the Australian
expressions of determination to defend the country against any
attack, and the American pronouncements, with later, the visit of
American war vessels to New Zealand and Australia, all helped to
modify the extravagance of Japanese ambition. It must, however, be
recorded that Mr. Matsuoka's visit to Berlin has lighted the flame
again.

9. The Japanese Government and people will, in my opinion, respect
firmness rather than flattery, provided that the firmness is
associated with frankness and courtesy.

When I have been speaking to Ministers and other Japanese leaders
I have found no resentment at a clear statement of our invincible
opposition to Hitler and to Germany, or of our unity with Great
Britain. No objection has been taken to any step taken by
Australia which is clearly associated with the war, even though
that step may be disadvantageous to Japan.

If, on the other hand, a hesitating or diffident position were
adopted, I am quite sure that the Japanese attitude would become
one of threats and truculence. As I have previously reported, many
people here have obviously been impressed by my description of the
capacity of Australia to defend herself. If the Government of
Australia firmly maintains the position that the country will
defend itself against all attacks from whatever quarter, and will
not submit to any dictated policy, and at the same time emphasises
the unity of interest and of policy between Australia, Great
Britain and other parts of the Empire, I am of opinion that such
an attitude will go far to make Japan hesitate before undertaking
a war against Great Britain.

Australia should, I think, be on her guard against any suggestion
by Japan for a conference for the purpose of solving supposed
problems. Such a proposal can always be presented as an appeal to
reason, but my legal professional experience has provided me with
many examples of cases where a party has no justifiable claim of
any description but, with the pretence of reasonableness, offers
to submit his claim to arbitration in the hope (frequently
justified) that the admission that there is a claim worthy of
consideration will lead to some result in his favour, either by
concession from the other party or by a compromising award of a
weak-minded arbitrator. Thus, for example, it is in my opinion, a
great mistake for any Australian announcement to be made that
Australia is not opposed to 'peaceful change in the Pacific'. Such
statements only invite demands for a change, and make it difficult
to refuse some form of conference or mediation or arbitration upon
claims which can readily be invented from time to time.

It must always be remembered that it is the policy of Japan to
protest that her intentions are peaceful. This means that they are
peaceful as long as they are not opposed. If they are opposed,
then it will be said that a new situation has arisen, and there
will be not the slightest hesitation in resorting to force if it
appears to be likely that the use of force will succeed. Even in
China Japan professes that her intentions are entirely economic
and peaceful in character. The argument is that everything would
be peaceful if only China were sufficiently well advised and
sufficiently 'sincere' to abstain from opposing Japanese aims.

In February last several public statements were made on behalf of
the Government and of the War Council with respect to the
situation in the Pacific. These statements expressed a desire for
peace and friendship, but a determination to resist any aggression
or dictation. In my opinion, Australia should have not the
slightest hesitation in pursuing this policy firmly. I think that
such a policy, expressed without apology or diffidence but with
courtesy and a frank association of the policy with the vital
interests of Australia, combined with an active prosecution of
defensive preparations to which a certain amount of wise publicity
is given, will be the best means available to Australia of
preventing war with Japan.

10. I am sending copies of this despatch to the Australian
Minister in Washington [4] and the Australian High Commissioners
in London [5] and Ottawa. [6]

J. G. LATHAM