19 FEBRUARY 1937, Page 2

Army and Diet in Japan General Hayashi's new Cabinet in

Japan, formed with the approval of the military authorities who had laid their ban on General Ugaki's proposed administration, is in being, but no one is likely to rate its survival-value very high. The Diet was adjourned for ten days to allow the new Cabinet to frame a policy, and it has to be recorded in favour of the Finance Minister, M. Yuki, that he has succeeded in reducing the naval and military estimates, not indeed to anywhere like last year's level, high as that was, but to something at any rate a little less than this year's original figures. But the Diet, when it did meet on Monday, evinced, through the speeches of party leaders, considerable restiveness at the military domination, and though General Hayashi outlined a moderate compromise policy, which pcstulated friendship with both Great Britain and the United States, the political atmosphere remains very uncertain and a further suspension of the Diet would not be surprising. And the dominating problem remains ; no Finance Minister can satisfy the demands of the fighting services without borrowing on a scale which will soon be beyond the capacity of the market.