yo THE ASSASSIN'S SHADOW LIES ACROSS JAPAN

ferred, and his political ally, Kaku Mori, the Seiyukai 1 schemer, is
ill and temporarily out of the picture. Shiratori has been singing
on a much lower note in his press conferences. In my telegram of
November 28, I gave further reasons for the present quiescence of
the anti-American feeling in the country. But of course this feeling
is always present and would rapidly be fanned into flame by any
untoward incident.

With regard to the forthcoming meeting of the Assembly in Geneva,
after talking with many diplomatic colleagues, foreign press cor-
respondents, and American residents who know Japan, I find no
one who believes that Japan will make substantial concessions,
certainly none that would alter or modify Japan's recognition of
Manchukuo. On the other hand, I think it possible that Japan
may have something in reserve to bring forward at the last
moment.

I base my supposition on three reasons. One is the unlikelihood
that Japan will be so rash as to attempt to face the moral condemnation
of the whole world, in spite of all the brave talk which is now taking
place. It seems possible that they may have some plan by which they
hope to forestall a vote of censure. The second is that Japan is arguing
its case at Geneva. If the nation is as sure of its ground as it claims,
why argue ? In the third place it is becoming increasingly evident
that the recent drastic decline in the yen exchange and consequent
further impairment of the country's credit abroad are to be traced
largely to a lack of confidence in Japan's political relations with the
' world at large. Until this feeling is liquidated, the danger of financial
and social dislocation through the collapse of the currency is ever
present, while foreign capital markets cannot be counted on to come
to her aid.

It seems to me that the Japanese are trying to ameliorate the feeling
aroused by the Lytton Report against their actions, and that having
put the best face possible on their behaviour they may possibly come
forward at the last moment,, before any action is taken against them,
with some suggestions looking towards an eventual settlement some
years hence. I do not for a moment believe, however, that any
suggestions which they may make will contemplate the relinquish-
ment of their recognition of Manchukuo as an " independent state."
The members of my staff and I have been endeavouring for the past
week to obtain some inkling of what the suggestions, if any, will
, consist of, but we have had no success. It is probable that the discus-
! sions in the Assembly of the League will continue for some time, and
if I succeed in obtaining any idea as to Japan's intentions, I shall
inform you immediately by cable.

In my cablegram of November 28, I suggested that restraint be
exercised in handling the Sino-Japanese dispute, because coercive
measures would undoubtedly result in more firmly welding the

Pft1 The more conservative of the two chief political parties in Japan, the Minseilo
being the more liberal,