2l8 CHINA INCIDENT

WHY FOREIGN MINISTER HIROTA LOST HIS JOB

July 21, 1938

A prominent member of the Japanese Government, speaking with
full knowledge of the situation, has given the following picture of
the purposes of the recent change in the cabinet and the intentions
of the Government as they shape up at present. Prince Konoye
and other members of the Government realized that if progress were
to be made in consolidating Japan's position in China and in avoid-
ing serious friction with Great Britain and the United States the
conduct of everything except purely military affairs must be taken
out of the hands of the Army and lodged in the civil part of the
Government. Hirota had fallen because he was too weak in opposing
the Army while at the same time insisting that the Foreign Office
has control of Japan's foreign relations in China. This the Army
would not tolerate, and it was for this reason that they were now
setting up the so-called " China Organ " to deal exclusively with
questions relating to China.

General Ugaki and Finance Minister Ikeda had accepted office
only on condition that political and economic affairs in China
should be taken out of the hands of the military, and this explains
the appointment of General Itagaki as Minister of War, because
he has the confidence of the younger officers in the Army and at
the same time believes that the Army should stay out of politics
and should limit itself to its duties as an efficient fighting machine.
Both Ugaki and Ikeda realize that the solution of Japan's problem
in China will be impossible unless good relations are maintained
with Great Britain and the United States and Ugaki therefore pro-
poses to do everything possible to see that their respective interests
are protected. Obviously it is not going to be easy to take these
matters out of the hands of the military and to persuade them to
follow policies laid down by the civil elements in the Government,
and whether they can succeed is an open question. At the same time
the purpose of setting up the North China Development Company
and the Central China Renovation Company is to take economic
affairs in China out of the hands of the Army. In all these questions
" the Big Five " see eye to eye. The foregoing statement of the
Government's position " came straight from the horse's mouth?>
and is considered entirely reliable.

THE CHINA INCIDENT BECOMES THE CHINA WAR

July i, 1938

June brought chiefly the fearful bombings of Canton and Japanese,
preparations to advance on Hankow, which had to be materially
altered owing to the cutting of the dikes by the Chinese and the