My telegram No. 482 and preceding telegrams. [1]

Following is an appreciation of the position formed after
discussing the situation with the best informed of my colleagues:

New Ministry is both peace and war ministry. Its outstanding
features are:

(a) At its head is a Prime Minister who holds both key portfolios
of Army and Interior and so is virtually dictator.

(b) Its predominant feature is the presence in it of men who stand
for State development and control of the industry etc. of the
country and who have already worked out their ideas in the testing
ground of Manchukuo.

(c) It has declared itself for continuance of conversations with
United States.

(d) Should its peace efforts fail it can very easily become a war
Ministry by dropping the Minister of Foreign Affairs [2] and
taking in some more extreme leaders. Whether it does so depends on
success or failure of its discussions with United States, probably
within the next two months.

(e) Meanwhile by the calling of the Diet and by having pro [sic]
active army officers at its head it is working to unite behind
[it] the whole country, civil and military, and will employ the
time immediately ahead for pushing on with the placing of the
country on a war footing.

(f) It has pledged itself to secure the settlement of the China
Incident and establish East Asiatic co-prosperity sphere, and so
made it difficult to give way much to United States to secure
agreement.

2. Yesterday British Ambassador saw Minister for Foreign Affairs.

In general discussion the latter expressed surprise that His
Majesty's Government were taking no part in United States-Japanese
discussions, emphasized short time available and importance of
removing causes of possible clash and repeated all the old
arguments regarding security and economic necessity why Japan had
gone into South Indo-China. Craigie was left with uneasy feeling
that further move southward or into Thailand is being planned and
that the Minister for Foreign Affairs is struggling against it.

OFFICER