138 THREE YEARS OF CALM BEFORE THE STORM

and the prime importance of American national preparedness to
meet it. As a nation we have taken the lead in international efforts
towards the restriction and reduction of armaments. We have had
hopes that the movement would be progressive, but the conditions
of world affairs as they have developed during the past twelve years
since the Washington Conference have not afforded fruitful ground
for such progress. Unless we are prepared to subscribe to a
Pax Japonica in the Far East, with all that this movement, as con-
ceived and interpreted by Japan, is bound to entail, we should rapidly
build up our Navy to treaty strength, and if and when the
Washington Naval Treaty expires we should continue to maintain
the present ratio with Japan regardless of cost, a peace-time insurance
both to cover and to reduce the risk of war. In the meantime every
proper step should be taken to avoid or to offset the belligerent
utterances of jingoes no less than the defeatist statements of pacifists
in the United States, many of which find their way into the
Japanese press, because the utterances of the former tend to inflame
public sentiment against our country, while the statements of the
latter convey an impression of American weakness, irresolution,
and bluff.

My own opinion, although it can be but guesswork, is that Japan
will under no circumstances invite a race in 'naval armaments, and
that having found our position on the ratios to be adamant, further
propositions will be forthcoming within the next two years before
the Washington Treaty expires, or before our present building
programme is fully completed. When the United States has actually
completed its naval-building programme to treaty limits, then, it is
believed, and probably not before then, Japan will realize that-we
are in earnest and will seek a compromise. We believe that Japan's
naval policy has been formulated on the premises that the United
States would never'build up to treaty strength, a premise which
has been strengthened in the past by the naval policy of the past
two administrations, by the apparent strength of the pacifist element
in the United States, and more recently by the effects of the
depression.

While it is true that Japan, by sedulously forming and stimulating
public opinion to demand parity with the United States in principle
if not in fact, has burned her bridges behind her, nevertheless
the Japanese leaders are past masters at remoulding public
opinion in the country by skilful propaganda to suit new conditions.
Once Japan is convinced that parity is impossible, it is difficult
to believe that she will allow matters to come to a point where com-
petitive building becomes unavoidable. With a national budget
for 1935-36-totalling 2,193,414,289 yen, of which about 47 per cent
is for the Army and Navy, and with an estimated national debt in
1936 of 9,880,000,000 yen, nearly equal to the Cabinet Bureau of
Statistics estimate of the national income for 1930, namely,
10,635,000,000 yen; with her vast outlay in Manchuria,