JAPAN FACES CRISIS
Commonwealth and Foreign
By GUENTHER STEIN •
Tokyo, December 23rd.
'EVER has Japan's Parliament been faced with a more critical situation than the one which it will have to discuss in its forthcoming seventieth session—the first to be held in its
new permanent quarters, that white towering building in the centre of Tokyo which it took decades to plan, another decade to build and half a decade to furnish. Japan's " national emergency of 1986-37," long heralded by the military, was finally brought to full maturity with the advent of that ominous time. But it has turned out somewhat differ- ently from that crisis which the military had envisaged ; less heroic and clear-cut in its character, less glorious and profitable
in its prospects of solution ; and provoked less by the force majeure of foreign envy than by the very policy which the Japanese military had designed in order to meet it.
In the " diplomatic mess," as the Japanese Press unanimously calls the international aspect of this emergency, the German-Japanese pact stands out as an outward sign of the impasse that the country's foreign policy has finally reached on the path it has pursued since the " Manchurian Incident." The pact with Berlin once more increased friction between Tokyo and Moscow at a moment when the chances for a Soviet-Japanese rapprochement had seemed better than they were for a long time ; when Press and people had enthusiastically welcomed the statement of Japan's last ambassador to Moscow, Mr. Tamekichi Ohta, that the Soviet Union harboured no aggressive designs against Japan, and that it was advisable to accept the Soviet's long-standing offer for the conclusion of a non-aggression pact. But now Soviet suspicion has again been aroused and the Far Eastern armament race has acquired a new stimulus. Pig-iron supplies from the Soviet Union have stopped, increasing the acute iron famine in Japan. Moscow refused ratification of the newly concluded agreement about Japanese fisheries in Soviet waters, which was the only achievement of Foreign Minister Haehiro Arita's foreign policy, thus creating a situation that may still cost the Foreign Minister his office, or even cause all the Hirota Cabinet to resign.
The blunders of Japanese diplomacy in relation to China became just as obvious. What the new adventures of Manchukuo-Japan in the Inner Mongolian province of Suiyuan and the persistent smuggling of Japanese goods into North China had not done to make an unprecedented failure of three months of negotiations for the " fundamental settlement of all outstanding Sino-Japanese questions," was done by the overbearing character of Japan's demands and, finally, by the suspicions that the Berlin-Tokyo pact aroused in China, which feared it was to be pressed into a dangerous anti- Soviet alliance. The Hirota Cabinet would hardly have survived the loss of face involved in the Nanking breakdown had not the sudden relapse of China into a major domestic crisis given it at least some breathing space.
Not less of a failure is Japan's recent diplomacy with regard to Britain and the United States considered to be. All the Government's pleas that the pact with Germany, the agreement with Italy, the cultural understanding with Poland, and its general anti-Communist femcnir do not mean that Japan has taken sides with the " Fascist bloc" and turned away from the idea of co-operation with Britain and America, have carried very little conviction. Half-heartedness in all her former attempts really to co-operate with the Western democracies, failure to achieve anything of the sort, and her recent, half-convinced flight from international isolation into the camp of two other isolated powers which are unable to help her—these are the grounds on which Japanese diplomacy is being reproached by its huge number of critics at home. They accuse the Government of having lost its bearings, and demand the establishment of a clear-cut and reasonable foreign policy which would give Japan a last chance to get out of the present impasse.
In the domestic field, too, the German-Japanese pact, or what it is considered to stand for by its opponents, takes a prominent place. The political parties of Japan and a majority of the people at large are afraid that the Pact indicates, or at least will cause, a new strengthening of those domestic powers which are trying to convert Japan into
a fully-fledged totalitarian State. The Minister of,Wari General
Terauchi, confronted the Cabinet recently with a project for " administrative reform," which would have amounted to the establishment of a powerful Economic General Staff on something like military lines, and to a marked reduction of the powers of Cabinet Ministers. A little later, the Army was said to be planning a fundamental change in the Diet system, so as to cleanse it from all influence of Western democracy which, the Army maintains, runs counter to the essentials of the true Japanese spirit. Finally, the Minister of Finance, Dr. Eiichi Baba, a strong henchman of the military, warned the public that Japan must submit to: the
necessities of " War Economy ?' if it is to weather the present crisis and that, therefore, he would have to ask for legis- lation that would vest him with all the powers that State control of the financial and economic life of the country could give. But all these announcements aroused so much antagonism that the War Minister's quest for administrative reform was shelved " until after the Diet session." His plans for a reform of the Diet were explained away after a. minor Cabinet crisis. And the Minister of, Finance an- nounced that he would abandon his request for central business control " for the time being."
The new record Budget that the Diet will, at least formally, have to approve is another target of general criticism. Total expenditure in 1937-38 will be slightly above three billion yen, i.e., one-third more than in the current year, or con- siderably more than twice the amount that used to ke spent before Japan marched into Manchuria and started., that " soaring career 7 which today culminates in an emergency of a diplomatic as well as a political and economic nature. Almost half-that amount will .go into, armaments which are to absorb three times as much as they did .before• the " Man- churian Incident," or one-third more than in the 'present fiscal year. If to these armament expenses are added those on the loan service for the rapidly rising national .debt, it appears that not a single yen from the nation's ordinary revenue remains for purposes of general administration. The deficit of very nearly one billion yen has to be made up by a new increase in the national debt which, by the end of the new fiscal year, will be fully twice as high as it was before the Manchurian event. Even now, however, the placing of new debts grows ever more difficult.
But at the same time taxes, customs duties, monopoly prices, and postage will have to be increased to an unp,re- cedented extent. Corporations will have to. carry .a burden almost twice as heavy as it was before.. Three million people will be added to the several hundred thousand who, so far, had been considered able to pay income tax. Indirect taxa- tion, at the expense of the masses, will be scaled up. Prices are bound to rise further, and the real wages of workers as well as the net incomes of the peasantry, both already so lamentably low, will keep on falling. All the high-sounding promises as to " a fundamental improvement of the people's livelihood " which were just as prominent in the initial pledges of the Hirota Government as in the motives of the military rebels of February 26th, 1936, have definitely come to naught. In whatever direction, therefore, the Imperial Diet will trace the course of national politics, it will find them in an impasse. Or have the recent events in China suddenly opened up a way of escape for Japan ? If China's national resistance should really break down in consequence of the Sian-fu revolt —a rather unlikely outcome—would not at least North China finally be at the mercy of Japan, providing her with new chances for unchallenged action, for economic salvation, and for a timely diversion of popular attention to a more heroic kind of national emergency than the present one is. proving to be in the mind of the Japanese people ? The military seem to hope so; lint civilian elements do net forget, that it was that promising victory over wealthy Manchuria which paved the way to the impasse in which Japan finis herself today,,
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