Shoichi Kaihara 1.sk.00003 Louis J. Sheehan, Esquire

application for license had been permitted when commercial evidence was submitted. No objection had been offered to the furnishing of money to Japanese associations for the next month, and remittances to Japanese newspapermen were allowed.

In addition, as a temporary measure after August 22, 1941, it had been decided to allow Japanese travellers to carry as much as 400 pesos when leaving the country. Consul Nihro reported that he had endeavored to be as efficient as possible in applying for licenses and he had requested that the same exemption from submitting reports be accorded Japanese businessmen as was accorded Chinese businessmen. He believed that these requests would receive favorable consideration.[773]

265. President Quezon's Illness Delays Trade Negotiations

On September 1, 1941 Japanese officials at Manila were attempting to negotiate a trade agreement whereby it would be possible to procure needed goods from the Philippines. It was reported, however, that negotiations were being held up owing to President Quezon's illness. The date fixed for putting this agreement into effect would depend upon the convenience of the firms concerned and the availability of steamers.[774]

Instructions that Consul Nihro establish contact with President Quezon and the new Secretary of the Interior, Mr. Rafael R. Alunan, were sent by Foreign Minister Toyoda on September 6, 1941. He pointed out that while the commercial negotiations were being carried on, it would be necessary for the Japanese Consul to participate often in regard to current questions.[775]

266. The Japanese Attempt to Procure Molasses Export Permits

Since September 1, 1941 (Labor Day) was an American holiday, Consul Nihro reported that it was impossible to talk with the High Commissioner concerning a new export permit for the first ship which would arrive in the Philippines to load molasses. The merchants, however, were optimistic regarding the permit. The Japanese Consul added that he would investigate the possibility of securing lumber and wire.[776]

267. Japanese Optimism Concerning Trade Permits Is Dispelled

Japanese optimism concerning normal trade relations was dispelled by a rumor reported to Tokyo on September 2, 1941. Philippine dealers had learned from a source considered to be reliable that under discussion was a proposal which was designed to prevent exporting by applying the export license system to all goods to be shipped to Japan and French Indo-China. Mr. Noble, the chief export control official, had informed Japanese lumber dealers that he believed the exporting license system would apply to logs and to all kinds of soft woods.

The export official had given no definite reply when questioned concerning the exporting of molasses, saying that the matter was now being referred to Washington. Under the circumstances, Consul Nihro suggested that the dispatching of the Kaisoku Maru be delayed for a time.[777]

Upon further investigation, the Japanese Consul learned that no cancellation would be ordered for items already permitted, barring, of course, that no unforeseen incident broke out in the meantime. The official in charge had been unwilling to speak definitely on the matter since he had not yet received instructions from Washington as to how the export

[773] III, 523.
[774] III, 524.
[775] III, 525.
[776] III, 526.
[777] III, 527.

[166]

THE "MAGIC" BACKGROUND OF PEARL HARBOR

license system would be applied. Upon Consul Nihro's request for a permit for the Kaisoku Maru, the official had given no definite reply but had asked merely that the dealers file an application.[778]

On September 4, 1941, the Japanese Consul to the Philippines reported extreme leniency in the physical examination of Japanese who were entering the country. The leniency of examining authorities had been particularly marked in the investigation of venereal diseases.[779]

268. Consul Nihro Requests Lenient Handling of Americans Passing Through Customs

Consul Nihro declared on September 4, 1941 that as a result of legislation freezing funds and regulating exports, Japanese nationals in the Philippine Islands greatly feared ill-treatment upon their leaving the country. Adding to this fear was a statement in a local English language newspaper that the officials in Japan and Shanghai had been extremely rigorous in their examinations of students sent out by the Philippine government, who had recently returned from the United States to their homes in the Islands.

Since many more Japanese were coming and going in these islands than were Americans and Filipinos passing through Japan and Shanghai, Consul Nihro asked that all possible arrangements be made to ensure lenient handling of American nationals.[780]

269. Consul Nihro Requests Suppression by Tokyo of Inflammatory Newspaper Statements

Believing that certain newspaper reports made in a Shanghai newspaper were inciting dissension, Mr. Nihro asked on September 4, 1941 that they be suppressed by Tokyo. Far from the truth, he declared, was the statement which had appeared in the Mainichi newspaper in Shanghai that Japanese residents in the Philippine Islands were resisting as best they could the pressure of American and Filipino authorities. An editorial comment in the same paper to the effect that Japanese fishing boats were barred from the Islands because of the antipathy of the Filipinos, as well as other false statements, had greatly embarrassed the Japanese attempting to do business in the Islands. Authorities in Japan were asked, therefore, to exert their best efforts so that such uncalled for statements would not be made in the future and that such editorial comments would not be printed in the papers in Shanghai.[781]

270. Japanese Are Denied Molasses Permits

Having been notified that Washington would not permit the loading of molasses, Japanese Consul Nihro demanded on September 4, 1941 that this matter be reconsidered. However, since delay would be created by a second appeal to Washington, he thought it best to direct the Kaisoku Maru to return to Japan. He added, for the information of the Japanese Foreign Office, that molasses was not a permit item.[782]

Although Mr. Wuyirobii had the authority to cancel export permits for iron ore, he had given the Japanese Consul his word that such cancellation would not be made. For this reason, Foreign Minister Toyoda was asked to dispatch a ship as quickly as possible.

A few days later a plan was evolved by Consul Nihro to have interested Filipinos apply for permission to export molasses and other goods. He believed, however, that the possibility of loading products successfully was very small since most Filipinos would "pull in their necks" when the necessity of American-Philippine cooperation was explained to them or when they were asked if they intended to revise the policy of the United States. In case this

[778] III, 528.
[779] III, 529.
[780] III, 530.
[781 III, 531.
[782] III, 532.

[167]

attempt should fail, the Japanese intended to use the restriction of Japanese-Philippine trade for propaganda purposes.[783]

Consul Nihro declared on September 9, 1941 that the British Consul General had been watching the recent increase of exports to Japan and had called the attention of the Americans to the shortage of fuel. In view of this fact, Consul Nihro believed it to be unwise to ask for a reconsideration of the American refusal to grant permits. Since it appeared that arrangements were being made for the resale of goods previously designed for Japan, and as there was a considerable demand within the Islands for fuel, the Japanese Consul suggested that the matter be abandoned.[784]

271. Lack of Shipping Curtails Japanese Mail to the Philippine Islands

Consul Nihro suggested to Tokyo on September 5, 1941 that the East Asia Bureau have mail routed to the Philippine Islands via Shanghai, since many of the Japanese residents in the Islands were concerned because they had received no mail from home. Since the mail would be transported from Shanghai to the Islands on foreign ships, he advised that the contents be examined before sending mail from Japan.[785]

Foreign Minister Toyoda replied on September 9, 1941 that the Bureau of Communications was giving study to this matter of transportation of mail. Since the French ships sailing between Shanghai and Saigon were routed by way of Hongkong, where they were inspected, this route was not a desirable one for Japan to use. However, if Consul Nihro could discover whether French ships were sailing directly from Shanghai to Manila, he was asked to inform the Foreign Office of this fact. At the present time, the Bureau was considering the use of Japanese ships from Shanghai to Saigon and of French ships from Saigon to Manila.[786]

272. Mr. Nihro Inquires Concerning Japanese-American Negotiations

In view of the lack of funds to carry on the work of the Consul General, Mr. Nihro requested on September 11, 1941 that the Japanese Foreign Office advise him of the present status of Japanese-American negotiations. He had believed that the work could be carried on for perhaps two months with the funds on hand, but since it now appeared that negotiations would continue for a much longer period than was previously anticipated, the Japanese Consul was disturbed about the future. Since he had also learned that the New York branch office of the Tourist Bureau was soon to be closed, he asked that instructions be sent from the Tourist Bureau's home office.[787]

273. Consul Nihro Rules Against Competition Among Japanese Firms

To avoid difficulties which might result from American authorities noticing competitive activities among Japanese firms, Consul Nihro informed the Foreign Office on September 12, 1941 that he had forbidden certain firms to wire Japan. Asking the Foreign Office to form a pool for the firms in order to keep them from competing, he suggested that one company should be appointed to handle all the business of a certain type, as in the case of importing hemp or lumber, and this company alone should send telegrams.

In a recent conference with Mr. Yuirobyii, the Japanese Consul found that lumber exportations would be governed by a general license since this was a non-remittance export. How this system would apply to logs was not certain, and in case the matter was not clarified soon, it was agreed that an inquiry should be wired to the High Commissioner's Office.[788]

[783] III, 533.
[784] III, 534.
[785] III, 535.
[786] III, 536.
[787] III, 537.
[788] III, 538.

[168]

THE "MAGIC" BACKGROUND OF PEARL HARBOR

274. Japan Decides Against Subsidizing Philippine Political Candidates

Although in the Philippine Islands the Japanese had been following the policy of subsidizing political candidates who, if elected, would cooperate with Japanese officials, it had been previously decided (See Volume II—Japanese-American Relations) to investigate the characters of candidates very carefully, as well as to discover their chances for election. On September 4, 1941, Consul Nihro notified Tokyo of the details of a particularly turbulent political race being held in the "Jyu" election district. The Governor, belonging to the opposition party, had suspended the chairman of the "Jyu" faction and as a result President Quezon had suspended the Governor. Consequently, the election district was declared open to free political candidates.

Believing, however, that open support of this pro-Japanese candidate would be dangerous, even if the district were limited to officially recognized candidates, the Japanese Consul asked permission to report the impossibility of raising the necessary funds though Mr. Enoshima in Japan, would somehow try to raise the necessary 5,000 pesos by the time of the election.[789]

On September 13, 1941 Foreign Minister Toyoda advised Consul Nihro that Mr. Enoshima had informed Mr. Kakiage that he was experiencing difficulty in raising funds at the present time, furthermore, there was no way of making remittances. In view of the fact that the candidate did not comply with Japan's wishes and there would be various other candidates whom Japan might wish to assist, no further aid could be extended at this time. The Japanese Consul was directed to make a reply along this line. [790]

275. Consul Nihro Reports Political Strife in the Philippines

Local altercations between members of rival political parties were creating a critical situation, the Japanese Consul at Manila reported on September 16, 1941. A Filipino had attempted to kidnap the secretary of the Ko Mon Kai in retaliation for an attempt by staff members of the local branch of the Nationalist party to murder a member of the Simpoto faction. Since officers of the Toa Simpoto as well as 50 members of the Nationalist party had been placed on the black list, the Simpoto party was attempting to retaliate by force. The Chinese Consul claimed, Mr. Nihro reported, that he was not familiar with the details of the incident.[791]

Foreign Minister Toyoda commented that the problem of the conflict between the Ko Mon Kai Society and the Nationalist Party was of greater importance to Japan than the differences in the negotiations at Manila. He directed the Vice Consul at Saigon, therefore, to get in touch with Manila to aid the Ko Mon Kai Society and to limit the disturbances as soon as possible since the main objective of the negotiations was to get control of the Ko Mon Kai and to allow its members to work out their own ideas.[792]

276. Japanese and Philippine Diplomats Postpone Negotiations

Consul Nihro reported the details of an interview he had with Mr. Rafael R. Alunan, Secretary of the Interior on September 17, 1941.

Accompanied by Mr. Kihara and Mr. Morokumo, Consul Nihro was informed that the status quo in regard to trade between Japan and the Philippine Islands would be maintained until 1946 at which time, because of the newly acquired independence of the Philippines, open negotiations in regard to the land problem could begin. Mr. Kihara had then presented a memorandum regarding the preservation of the status quo, and Secretary Alunan had promised to deliver it to President Quezon on the following day.

[789] III, 539
[790] III, 540.
[791] III, 541.
[792] III, 542

[169]

After meeting with President Quezon on September 18, 1941, Secretary Alunan had left on urgent business for a trip into the country. As a result, though he had telephoned Mr. Morokumo that there was no reason why Mr. Kihara should not return to his post, he had reported very little of his interview with President Quezon. However, President Quezon in his last discussion with Mr. Kihara and Mr. Morokumo, had avoided setting a definite date for future discussions, and since Consul Nihro believed that it was probably better for Japan not to specify a date, mention of 1946 had been purposely avoided.[793]

Following Mr. Alunan's return on September 22, 1941 from his short business trip, Consul Nihro was able to report that President Quezon had confirmed the memorandum presented to Mr. Alunan on September 17, 1941.[794]

Foreign Minister Toyoda pointed out that the mutual agreement between the Japanese and Philippine representatives was nothing more than a verbal promise since no written recognition of the Japanese memorandum had been demanded of the Philippine officials. Not from a lack of faith in Secretary Alunan or President Quezon's word but in view of the important nature of the question, the Japanese Foreign Minister felt that some secret paper outlining the agreement or the secretary's signature on the copy of the memorandum should be obtained despite the delicate relations existing between the Philippine authorities and the High Commissioners. In case the Philippine authorities should violate this understanding and no written agreement had been obtained, Japan would find itself powerless to take any action.[795]

277. Consul Nihro Asks That Lumber and Iron Ore Ships Be Dispatched Immediately

Advising that ships be dispatched immediately, although separately, to the Philippines, the Japanese Consul declared on September 16, 1941 that lumber was not to be included in the recently enlarged list of items affected by the export license system. Since the length of time during which this exemption would be in effect was by no means certain, he pointed out the necessity of sending ships immediately, and of notifying the traders in the Philippines of the names of the ships and the date of their arrival as soon as possible.[796]

According to Consul Nihro on September 22, 1941 logs and lumber were on the list, published on September 20, 1941, of material not covered by the export control order. He further declared that no permits had been granted for hemp exports, although there had been no change in permits which had already been issued.[797]

Consul Nihro also asked that Japanese ships be dispatched immediately in order that the loading of iron ore could be continued. If ships were not sent soon to the Islands, there was danger of discouraging further Japanese efforts. Furthermore, it was necessary that funds resulting from previous exports to the Philippines be utilized since they would only increase the frozen funds.[798]

278. Japan Sends the Hakone Maru to Evacuate Nationals

The Foreign Minister advised the Japanese Consul at Manila on September 26, 1941 that the Hakone Maru would soon call at Manila and Davao. The Foreign Office was to be advised of the number of Japanese withdrawing from that district as well as other details of the evacuation.[799]

[793] III, 543.
[794] III, 544.
[795] III, 545.
[796] III, 546.
[797] III, 547.
[798] III, 548.
[799] III, 549.

[170]

THE "MAGIC" BACKGROUND OF PEARL HARBOR

279. The Foreign Office Arranges the Sale of a Philippine Vessel

Apparently to complete the sale of the Fuyo No. 1, the Foreign Office asked the Japanese Consul at Manila on September 29, 1941 for permission of the owners in the Philippines to dispose of the vessel at approximately ¥29,000. In case the sale were made, two-thirds of the sale price would go to the owners remaining in the Philippines while one-third would be paid to those who brought the ship to Japan. He also inquired if he should send 6,000 pesos of the latter sums to the owners in the Philippines immediately following the sale.[800]

280. Japan Arrests Philippine Profiteers

In answer to a dispatch, Foreign Minister Toyoda in Japan sent the names of individuals who had been punished for violation of the Exchange Control Act. Among those who had been charged with collecting dollars in Japan to sell for yen in Shanghai were Raphael Aquino, who was a nephew of the former Director Aquino in Manila, Juan Aquino, and Riserio Kasutoro.[801]

According to the Japanese Foreign Office, Raphael Aquino had requested on October 3, 1941 that his father, Ganzalo Aquino send him Y3,000 with which to pay his fine. Since no remittance had been received, as of October 10, 1941, Consul Nihro was requested to talk with the elder Aquino to find out his character and to have the father advise his son to return home.[802]

281. The Foreign Office Directs that Machine Code Be Used Only for Official Messages

The day before the new code system was to go into effect, the Japanese Foreign Office informed Manila on October 13, 1941 that the system was to be used entirely for secret messages and not for personal ones.[803]

[800] III, 550.
[801] III, 551.
[802] III, 552.
[803] III, 553.

[171]

THE "MAGIC" BACKGROUND OF PEARL HARBOR

PART C—JAPANESE DIPLOMATIC ACTIVITIES THROUGHOUT THE WORLD

(d) Japanese-Mexican Relations

282. Japanese Agent Suggests Liquidating Petroleum Company

In view of the strained commercial relations existing between Japan and Mexico, Mr. Okumura, a representative of the Japanese Pacific Petroleum Company in Mexico, advised his Tokyo office that since difficulty was being encountered in obtaining manufacturing permits, Japanese officials and machinery of the company should be evacuated. At the same time he submitted to the company president, Mr. Kubota, an estimate of the company funds on hand in Mexico as of August 6, 1941.[804]

283. Japanese Commercial Representative Leaves Honduras

After Minister Yoshiaki Miura had been consulted by officials in Tokyo in regard to the evacuation of Mr. Megurigami, a Japanese commercial agent in Honduras, he inquired on August 8, 1941 whether the Foreign Office had been consulted. Mr. Megurigami had asked permission to return home since the freezing regulations had badly affected Japanese-Honduras trade. Although his return had already been authorized by his home office, his superiors had asked for the opinion of Minister Miura.[805]

On August 14, 1941 Minister Miura was advised by the Foreign Office that the Japanese company, after consulting with the Foreign Office, had made arrangements for the official's return to Tokyo.[806]

284. Minister Miura Encounters Difficulties in Financial Transactions

Still experiencing difficulty in collecting exchange certificates, the Japanese Minister in Mexico inquired of the Foreign Office on August 8, 1941 concerning the best method of securing permits from the American authorities for commercial transactions. He advised that his funds on hand were diminishing, and asked that instructions be sent to him immediately.[807]

285. Minister Miura Suggests Waiting Policy in Resisting Trade Restrictions

The Japanese Minister reported to Foreign Minister Toyoda on August 11, 1941 concerning the restrictions placed on exports in Mexico. The Mexican government, he said, would hardly dare ease up on trade restrictions which had been dictated by the United States, especially since the enforcement of the Presidential order was being carefully watched at the present time.

Although previous secret efforts made by the various Japanese commercial firms to exchange Japanese rayon for Mexican mercury had ended in failure, Mexican companies were now beginning to work openly to obtain permission for this exchange. Consequently, newspaper articles relating to the subject were appearing almost daily in Mexican newspapers. Furthermore, the rayon textile dealers planned to send manufacturing representatives directly to the Mexican President, at the same time sending telegrams to senators.

Pointing out that the Japanese could instigate a propaganda campaign, Minister Miura, however, advised against this since the scheme might react upon Japan.

[804] III, 554.
[805] III, 555.
[806] III, 556.
[807] III, 557.

[173]

Since it was necessary that the situation be thoroughly understood before taking part in it, a policy of waiting was advised by Minister Miura. According to him, the present pertinent question appeared to be: When will the United States sacrifice civilian or even military necessities in order to supply Mexico's needs? Although the United States had, he said, formerly promised to give this matter consideration, no expression of its intentions had yet been seen. When at last it became apparent that the United States did not intend to supply Mexico with rayon, and the existing stock in Mexico had been completely exhausted, the Japanese Minister felt that the reaction in Mexico would ultimately favor trade with Japan.[808]

On August 11, 1941 the Japanese Minister further reported that he had learned a great deal concerning the existing situation in his talk with a Mexican official on August 2, 1941. Although the plans for "barter" of rayon and mercury had begun to show hopeful developments, America's announcement of its intentions had caused them to be abandoned. Since, in the opinion of the Mexican official, it would be absolutely impossible for America to furnish rayon to Mexico, it would be opportune, following the meeting of the assembly on September 1, 1941, to get in touch with influential senators for the purpose of bringing about a change.

To win the support of Mexican people, the Mexican official advised that the Japanese Minister secure export permits for the shipments which had been contracted for before the issuance of the Presidential order. Several days later Senor Enrique Osornia, a Mexican senator, made a similar suggestion. Although Japan formerly had decided to withhold all shipments of rayon to Mexico, the Japanese Minister replied that the 3,000 boxes on the Heiyo Maru would suffice in the way of a friendly "gesture" by Japan, although an increase in the stock of rayon in Mexico at this time might possibly have adverse results. Furthermore, unless this gesture aided in the solution of the whole problem it would be difficult to change the attitude of the Japanese government.[809]

286. Minister Miura Postpones Rayon Prince Cutting Scheme

In answer to Foreign Minister Toyoda's suggestion that Japan counter American plans by furnishing Japanese rayon to Mexico at half price, Minister Miura advised on August 12, 1941 that the lowering of price could be used as a forceful tool in future trade treaties, but that Japan's wiser course would be to await a better opportunity.[810] He reiterated that no question of price or barter existed at the moment, but that Japan's problem was to overcome Mexican trade restrictions.[811]

Dr. Kiso Tsuru, a well known leader in Japanese oil, mining, construction, and other enterprises in Mexico, reporting on August 5, 1941 indicated the attitude of the Mexican President and Economic Minister as revealed by a person close to the President. This confirmed the advice of the Japanese Minister that any action by Japan at this time would be futile.[812]

287. Minister Miura Opposes Mr. Tsuru's Silk Control Plan

As to the possibility of future trade between Mexico and Japan, Mr. Miura disapproved of a plan concerning artificial silk which had been evolved by Mr. Tsuru. In view of the fact that artificial silk was the only instrument which might guarantee to Japan the acquisition of Mexican materials, Minister Miura advised Tokyo on August 12, 1941 that he opposed any breakdown of the present control as suggested by Dr. Tsuru.[813]

[808] III, 558.
[809] III, 559.
[810] III, 560.
[811] III, 561.
[812] Ibid.
[813] III, 562.

[174]

THE "MAGIC" BACKGROUND OF PEARL HARBOR

288. Tokyo Directs the Pacific Petroleum Company to Close Its Office

In answer to a request from his home office in Tokyo, Mr. Okumura informed officials of the Pacific Petroleum Company on August 12, 1941 that it would be impossible to evacuate machinery and company personnel for some time to come since no Japanese ships were being assigned to that route.[814]

Mr. Okumura was advised via Foreign Office dispatches that the decision of the three Japanese officials in Mexico in regard to closing the Mexican Office had been confirmed. The company official was to carry out certain instructions in shipping company personnel and machinery out of Mexico, and was to comply with stated priorities.[815]

289. Minister Miura Is Directed to Ship Machinery on the Azuma Maru

On August 15, 1941 Minister Miura learned that the Azuma Maru would leave Yokohama on September 5, 1941 and arrive in Manzanillo on September 24, 1941. In order to comply with a request from the Chief of the Japanese Fuel Bureau, Minister Miura was to have ready for loading at Manzanillo a drilling machine, a tractor, a caterpillar, and powder for a gun perforator. Several parts to be used in a Diesel engine were to be purchased and loaded on the Azuma Maru,[816] as well as the machinery which was being sent to Japan by the Pacific Petroleum Company. The Japanese Foreign Minister added that, although other countries considered the Azuma Maru as an ordinary commercial vessel, the Japanese government considered the ship to be in official use.[817]

290. Dr. Tsuru Plans to Aid the Pacific Petroleum Company

Minister Miura advised Foreign Minister Toyoda on August 21, 1941 that his instructions regarding the evacuation of company officials and machinery had been received.[818]

When Dr. Tsuru was informed of the purport, he submitted a counter proposal by which the Pacific Company's main office would continue its actual prospecting on the principle of "Live and let live", with drilling being carried on as soon as drilling permits could be obtained. The Mexican firms would carry the expenses of operations and maintenance, and in the event of a crisis the Pacific Petroleum Company would retain the funds on hand.[819]

After this counter proposal had been made, however, the Foreign Minister's dispatch of August 21, 1941, concerning the schedule of the Azuma Maru, had been received, and the Mexican firms returned to their original plan. They agreed to carry the expenses of the company's maintenance and to protect Pacific Company funds from confiscation. Since the machinery was to be sent to Japan, the operations of the company would be limited, but for the time being, according to Mr. Tsuru's plan, the Pacific Company was to continue prospecting with the Mexican companies attempting to secure operating permits and to collect guarantee funds for the purchase of petroleum.[820]

On August 30, 1941 the Japanese Foreign Office informed Minister Miura that there was no room for reconsideration of any counter proposal made by Dr. Tsuru or the Mexican firms. As far as the Foreign Office was concerned, the Pacific Petroleum Company had temporarily stopped operations.[821]

[814] III, 563.
[815] III, 564-656.
[816] III, 566.
[817] III, 567.
[818] III, 568.
[819] III, 569.
[820] III, 570-571.
[821] III, 572.

[175]

291. Minister Miura Advises Against Sending the Azuma Maru to Manzanillo

On August 22, 1941 the Japanese Minister in Mexico advised that the Azuma Maru was scheduled to stop at Manzanillo on September 13, 1941. Since the ship had left this port on July 17, 1941 after the imposition of the Mexican embargo, he advised against its returning to Mexico. An unfortunate situation would be created if a dispute should arise because of the Mexican government's forbidding, on some pretext, the unloading or sailing of the ship.[822]

292. The Pacific Petroleum Company Summarizes Its Assets

On September 1, 1941 officials of the Pacific Petroleum Company sent to Tokyo through diplomatic channels a statement of their funds in Mexico. The greater portion of their capital, over a million pesos,[823] had been deposited with the Mexican Legation, 1,000 piastras had been deposited in the bank, and a considerable sum was being held by the Japanese consulate. Total assets in August, 1941 amounted to 1,201,639.76 pesos and $5,072 American dollars.[824]

293. Japanese Legation Uses Secret Funds

Prospective difficulties in making payment to the Legation staff and other Japanese officials in Mexico caused Minister Miura to ask in July, 1941 that the Foreign Office work out some method of remitting funds. (See Volume II, #423). Foreign Minister Toyoda replied on September 2, 1941 that although there would be a delay in the remittance of salaries, the Foreign Office was studying methods of making remittances in spite of the freezing order of the United States. Until such payment became possible, the Japanese Minister was instructed to make use of the secret fund or other funds kept at the Legation.[825]

294. Minister Miura Rejects Foreign Office's Secret Barter Scheme

On September 3, 1941 eleven days after Minister Miura had advised the Japanese government to order the Azuma Maru not to touch port at Manzanillo,[826] he expressed his indignation to the Foreign Office concerning the Japanese Navy's scheme of disguising the exchanging of artificial silk for Mexican mercury as a commercial deal undertaken by civilian business firms without the cognizance of either government. In view of Japan's strict control of rayon exports, the adoption of such a plan was merely, he said, to harbor a hallucination born of ignorance. If such a scheme were worth taking a chance on the danger involved, it should be done in such a way that the Japanese government could say that it knew nothing of it, thereby avoiding any responsibility. The Japanese navy had stated, however, that any results arising from future dealings would have to be handled by Foreign Office officials. One mistake in such a plan might well give rise to international complications which would seriously affect the prestige of the Empire, Minister Miura declared, and for this reason the Foreign Office should not carry out cooperation with the military authorities to such an extent that it would accept the unwise plan.[827]

295. Minister Miura Threatens to Resign

Continuing his remarks on the Japanese Navy's scheme to acquire mercury, the Japanese Minister protested against having to take action upon a situation which had been explained only to his Naval Attache. Furthermore, Minister Miura could not understand why no previous inquiry had been made concerning actual conditions in Mexico, or why no information had been given to him as the Minister responsible for the actions of his government in Mexico.

[822] III, 573.
[823] A peso was worth 20.5 cents in American money at this time.
[824] III, 574.
[825] III, 575.
[826] III, 573.
[827] III, 576.

[176]

THE "MAGIC" BACKGROUND OF PEARL HARBOR

Requesting an explanation from the Foreign Minister in this regard, he declared that if, in the face of his sincere counsel, the original plans were insisted upon and carried out, he would resign and request that he be ordered home immediately.[828]

296. Minister Miura Withdraws Request for Additional Staff Members

Despite his previous request for the establishment of a Japanese consulate at Manzanillo, the Japanese Minister now explained to Tokyo on September 5, 1941 that it was unwise to send additional officials at this time when Mexico was keeping Japanese affairs under close observation. Since making necessary arrangements for the arrival of the Japanese officials might arouse the suspicion of the Mexican government, which was carefully scrutinizing all Japanese movements, he advised that any action on this matter be postponed pending a more favorable opportunity.[829]

297. Japan Lifts Ban on Silk Exports to Mexico

On September 6, 1941 Japan informed the Japanese Minister in Mexico that the ban on exports of artificial silk was being lifted, and that Mexico would be guaranteed a minimum supply of 10,000 boxes of artificial silk for the next six months. In exchange Mexico was allowing accommodations for Japanese ships at the ports of Manzanillo, Acapulco, and Salina Cruz, and providing the ships with 30,000 tons of fuel oil during the next six months. Continuation of this agreement would be discussed at the end of six months.[830]

In explaining this decision Foreign Minister Toyoda informed Minister Miura that General Jose Luis Amezcua, the Mexican Minister in Tokyo, had called on the Chief of the Japanese Trade Bureau to propose that Japan ship rayon in Japanese ships as far as Manzanillo, with Mexico supplying, by way of exchange, fuel oil for the ships. Since Japan was controlling trade to counter Mexico's anti-Japanese position, the export of Japanese rayon silk to Mexico was forbidden. However, in spite of this fact, Japan desired to discuss the Mexican Minister's plan, since it needed oil for its ships assigned to Central and South America, and since such negotiations would contribute toward the lessening of Mexico's pressure against Japan. After Japan made its proposal the Mexican Minister sought instructions from home. He declared that because of Mexico's relations with the United States it would be best to agree on this matter before any transfers of materials were made.[831]

Minister Miura then advised Tokyo that it was in the interests of Japan that any rayon shipments from Japan should be made after the signing of the pending agreement.[832]

298. Japan Objects to Mexican Parcel Post Restrictions

An unforeseen development in Japanese-Mexican relations occurred when the Japanese Foreign Minister learned on September 9, 1941 that diplomatic parcel post would be opened in the presence of customs officials whenever the Mexican government deemed it necessary. Mexico had explained, however, that such action was not intended to be a means of applying pressure on Axis nations.[833]

The Japanese Foreign Office replied on September 13, 1941 that such action was considered objectionable from the standpoint of its international relations.[834]

[828] Ibid.
[829] III, 577.
[830] III, 578.
[831] III, 579.
[832] III, 580.
[833] III, 581.
[834] III, 582.

[177]

299. The Japanese Foreign Office Instructs Minister Miura to Aid German Nationals

Without previous reference to the subject on September 10, 1941 Foreign Minister Toyoda gave Minister Miura the names of five German citizens with the explanation that there were no objections to granting them visas to enter Japan. The Germans, the Foreign Minister said, wished to leave Manzanillo September 16, 1941 on the Heiyo Maru.[835]

Minister Miura notified Tokyo on September 13, 1941 that on the previous day he has been asked to cooperate with Mexico in securing passage to Japan for five Germans whom Mexico wished to deport but whose names it would not divulge.

Since it would be necessary to ensure against propaganda being made of the fact that Japan had assisted in the banishment of these persons, the Japanese Minister had replied that he must first ask instructions from his government, and that it would be necessary to be advised of the names of the persons to be deported as well as the reasons therefor. Although Mexican officials had agreed to give Japan this information in strict confidence, on the morning of September 13, 1941 there had been no further word from the Mexican Foreign Office.

Since the Heiyo Maru was scheduled to sail from Manzanillo on September 16, 1941 Minister Miura asked the Foreign Office for immediate instructions. Minister Miura had secretly conferred with members of the German Legation in Mexico, and had been informed that they were at a loss to know the meaning of this action unless it referred to the five persons mentioned previously by Tokyo.[836]

300. Japanese Officials Prepare for Arrival from Tokyo

On September 10, 1941 Tokyo requested the Japanese Legation to assist Couriers Harada Masayuki and Morino Maysayoshi, who would enter Mexico toward the end of September at Manzanillo on the Terukawa Maru. All assistance was to be given them in their passage through Mexico to Washington.[837]

From the Japanese Embassy in Washington on September 15, 1941 came the request that the schedule of Couriers Harada and Morino be forwarded as soon as they had arrived in Mexico.[838] Japanese officials in Mexico were also asked to assist in making reservations for Minister Wakasugi, who sailing from Yokohama, would arrive on the Terukawa Maru at Manzanillo about October 4, 1941 and would proceed to Washington by plane.[839]

301. Azuma Maru Leaves Japan on September 14, 1941

In accordance with Minister Miura's request that he be informed of developments in regard to the "barter" of rayon for bunker oil, the Japanese Foreign Office indicated on September 13, 1941 that the Azuma Maru would leave Japan on September 14, 1941. Since the rayon had already been loaded, and it would have been difficult to unload it again, it had been shipped with its disposal at Manzanillo left to the judgment of Minister Miura. However, if the barter arrangements had not been effected by the time the Azuma Maru reached the Mexican port, the Louis J. Sheehan, Esquire Japanese Minister was given permission to send the vessel back to Japan.[840]

302. Special Japanese Naval Liaison Officer is Selected

The name of Mr. Shoichi Kaihara, a Japanese Legation staff member, was sent to Tokyo for approval on September 18, 1941. The official had been selected to act as a special liaison man for the Japanese navy, Louis J. Sheehan, Esquire and in that capacity would make an official trip to Colombia.[841]

[835] III, 583.
[836] III, 584.
[837] III, 585.
[838] III, 586.
[839] III, 587.
[840] III, 588.
[841] III, 589.