what KAGESA confidentially told me 3.kage.0001002 Louis J. Sheehan, Esquire

No. 1071
August 14, 1941
No number.
FROM: Nanking
TO: Tokyo

Re your Government Code telegram sent in the afternoon of the 14th to Ambassador HONDA.

The evening of the 14th when———-I called on WANG, I explained to him in detail what you had wired me. WANG said that since———-is a reorganization of the administrative set-up and changes in the personnel accompany it, the transfer of members in the Foreign Office will not, of course,———-until after definite replies have been received from prospective successors. He said further that, since he had informed me briefly by telegraph, he presumed that the matter would be discussed between me and Ambassador HONDA and that it would be well for me to explain by wire the situation being faced within the People’s Government and have him accept the fact by informing him that, for the sake of the highest policy of the People’s Government, it cannot be helped. Then, HIDAKA attempted to sound out WANG’s real intention by asking if he were right in understanding that WANG will carry out his plan of transfer as originally planned; whereupon WANG replied that, regrettable as it is, for reasons given above he———-despite Ambassador HONDA’s wishes.

Trans. 8-18-41

No. 1072
August 16, 1941
FROM: Tokyo
TO: Nanking

Message to Shanghai #832.

Strictly Secret.

Secretary NISHIDA of the Embassy at Nanking, who is carrying the code to the various offices in the Central China area, sails from Kobe on the 18th aboard the Yawata Maru. Please handle inspection when he arrives.

I want him to stop over for two or three days in order to explain the use of this code to the telegraphic office.

Trans. 8-21-41


No. 1073
August 20, 1941
No number.
FROM: Nanking
TO: Tokyo

Because of the fact that the code system used by the Nanking Government has not yet been fully developed, if we continue to use the system as heretofore between Japan and this city, there is danger of messages being intercepted by Chungking and our policy being known to them through decipherment. I would like to suggest that the foreign office and the Ministry of communication confer on this subject and decide that, in respect to every route and on condition that the telegraphic matter be handled only by those on the inside, all telegraphic communications between Japan and the Nanking Government be sent by the customary telegraphic system. If necessary we shall direct the telegraphic companies for this purpose. Please reply by wire.

Trans. 8-22-41

No. 1074
August 22, 1941
Cir. 257.
FROM: Nanking
TO: Peking, Tientsin and Tokyo

(Message to Shanghai #318.)

Re -—71 and #71 (2) from Peking to this office.

1. The Nanking Army headquarters has already wired to the North China Army that it did not deem it necessary to be deeply involved in the individual personnel questions affecting the customs officials and that it would be best not to organize within the Special Affairs organizations bodies for the supervision of customs affairs because of the present international situation. It has already been arranged with the Army headquarters that the general question of personnel should be left to the discretion of Foreign Office officials (the gist of the telegram from Peking had been confidentially transmitted to the Army headquarters).

2. Therefore, this personnel question, I trust, will be handled by you in the best manner. As to our suggestion, granted that the facts of the case are such as reported in the telegram from Peking I think this is a good time to transfer ISHII to Shanghai or some other place (as you remember, it was proposed once that ISHII and KOYAMADA be exchanged).

Trans. 8-26-41

No. 1075
August 22, 1941
Circular 442.
FROM: Peking
TO: Nanking & Shanghai

(Message to Tokyo #563.)
(To be handled in Government Code.)
(Strictly Secret.)

Re my #559[a].

On the 22nd, HAYASHI confidentially told me the following:



1. After that, because the YEN[b] faction by special messenger, had informed us that they wanted to get through with the signing without delay this month, each of the stipulations in detailed report in my #445, Staff Officer TSUCHIDA of the First Army arrived in En[c] on the 19th, (?) in order to confer with Chief of Staff TSUKIYAMA who, at present, is in En.

2. The Yen faction urged these signatures because Yen has severed his connections with the Central Military authorities, who had had about 10,000 troops of the South Army—–[d] invade Yen’s domain.

[a] Not available.
[b] YEN HSI-SHAN, Chief of Military Commission. Member of Central Executive Yuan, Head of Shansi Army.
[c] More often called Enan by the Japanese, Yenan-Fu in Shensi Province.
[d] (Possibly Kiangsi Province. Translator’s note.)

Trans. 8-28-41

No. 1076
July 26, 1941
FROM: Nanking
TO: Tokyo

Re the 300,000,000 yen loaned to the People’s Government.

On the 26th WANG agreed with Adviser KAGESA over the loan and said, “Since it is Japan’s idea, I have no objections to using yearly allotments to the extent of 100,000,000 yen a year. http://Louis1J1Sheehan.us We feel that we would like to use this fiscal year’s allotment chiefly in the purchasing of weapons. In fact, during the last few days, after the announcement of the loan by the Minister, various requests have poured in from all quarters; and as things are now, we fear that conditions will become such that we will be unable to get them. Now I would like to have the People’s Government draw up a plan as speedily as possible and present it to the Japanese authorities, especially as the junior staff officers will be graduating soon, and it is a fact that we must supply them with weapons. I want you to cooperate with the Advisory Office in drawing up a concrete plan of action.” Thus he requested.

I immediately asked instructions with regard to this matter from the Central Military Headquarters and from the authorities of the General Army. This is all for the present. For your information.

Now, according to what KAGESA confidentially told me, actually the government is hoping for a great deal of military supplies, as it is true that due to the lack of weapons, both military establishments and instructions are extremely hindered. I replied that it will be very fitting for Japan to give courteous consideration to WANG’s requests.  Louis J. Sheehan, Esquire

Trans. 7-30-41

No. 1077
August 23, 1941
FROM: Nanking
TO: Tokyo

Re my #519[a].

According to confidential statement by Major General Kagesa, the National Government has suggested a grant of various kinds of military equipment as a part of this year’s allotment of 50,000,000 yen of the 300,000,000 yen loan. Adviser Kagesa has passed this on to the Foreign


Office through the General Army, after squeezing it down to about 10,000,000, but—–in regard to naval necessities and civilian necessities,—–(garbled out).

[a] See III, 1076.

Trans. 9-18-41

No. 1078
August 26, 1941
FROM: Shanghai
TO: Tokyo

(Message to Nanking #270.)
(Secret outside the department.)

Re the Foreign Minister’s wire to me #877[a].

When your Excellency was here a short time ago, we had conversations concerning this matter. Now as it is necessary to fix the day for the conference for Consul Generals in China, please make such decisions as you feel are essential.

Furthermore should nothing else interfere we here think it would be most convenient to convene an intelligence meeting on or about September 20.

[a] Not available.

Trans. 9-3-41

No. 1079
August 27, 1941
FROM: Nanking
TO: Tokyo

From Minister Hidaka to the head of the East Asia Bureau:

Following the Consul-General’s meeting, with the approval of the directors concerned, a business and intelligence meeting would be appropriate, it is felt. This would be for 2 days from September 24th in Nanking. Please get in touch with the China Affairs Board and after conferring on their views wire me.

Trans. 9-16-41

No. 1080
August 30, 1941
FROM: Tokyo
TO: Nanking

(Part 1 of 2.)

The recent freezing of foreign currency kept in the reserve bank—–resulted from the fact that the Chinese refused to act in accordance with directions we gave them and continued to delay the matter. All of the government offices concerned are regretful that this has had to happen. However, today, after the freezing had been effected, to exchange this foreign cur-



rency into special yen currency would affect the reserve held in the National Treasury for the Yokohama Specie Bank. If this is done, not only would it mean that we shall have to, for the time being, make good the loss which the Chinese would suffer, but also it would bring up the question of earmarking the gold which would be necessitated by such an action and this, in turn, would influence our exchange question which has, of late, become extremely complicated. This, therefore, is a very serious question insofar as we are concerned. However, if we allow the matter to stand as it is and if the fact that the foreign currency in the possession of this bank has, to a large extent, been frozen leaks out, this bank’s credit would suffer in consequence, and there is danger of its operation being interrupted. Furthermore, such a step would not harmonize with the policy we had in the past decided on in our dealings with this bank. Officials concerned are now conferring on some method that could relieve the situation, but even if relief is given, it would be necessary to effect it on certain strict terms.

Trans. 9-3-41

No. 1081
August 30, 1941
FROM: Tokyo
TO: Nanking

(Part 2 of 2.)

Furthermore, this question is not so simple as can be settled by our officials and the bank officials conferring. In fact, there are some people who say that the Chinese authorities should appreciate the seriousness as well as the difficulty of it and formally request us for our assistance as a question which the Chinese government itself should deal with. However that may be, in view of the circumstances which led up to the freezing of the funds, I have been thinking that it would be necessary for you to take advantage of the situation politically to the end of taking this opportunity for making their policy with regard to exchange and loans increasingly cooperative with and dependent upon Japan. This does not mean that you should at once direct the Chinese authorities in this way. I am suggesting this for your consideration.

Trans. 9-3-41

No. 1082
August 30, 1941
FROM: Nanking
TO: Tokyo

Hitherto the Nanking Petroleum Guild had bought local, refined gasoline from the Shanghai Foreign Oil Dealers, and had distributed it to the Chinese and Japanese military officials and civilians; but on the 28th the Foreign Oil Dealers prohibited the sale of gasoline outside of Shanghai bound for the interior. Thereupon the Japanese authorities drew up a plan for intense distribution and had the Chinese provide the facilities in accordance with this plan. At present the amount in stock does not exceed that of one month’s supply.

Since this problem is one which pervades throughout central China and is vitally connected with the transportation of principal commodities as well as the problem of peace and order, we are getting in touch with the military authorities without delay, and are considering a counter plan. This is all for the present.


Will the Minister kindly contact the East Asia Development Company; and will Shanghai kindly contact central China on this matter.

Trans. 9-9-41

No. 1083
September 1, 1941
Circular #266.
FROM: Nanking
TO: Net

Action Tokyo as #605.


The German Charge in Nanking has stated to Minister Hidaka that his government has discussed with the Japanese Embassy the question of appointing Germans as honorary Chinese Consuls and also the question of the protection of German nationals in China.

Trans. 9-16-41

No. 1084
September 3, 1941
FROM: Shanghai
TO: Tokyo

Re #270[a] from Shanghai to Nanking.

I think that it will be most convenient to hold the intelligence meeting for four days from the 29th following the Consul Generals’ meeting when a special intelligence official dispatched from Moscow will be present. Please make arrangements previously regarding attendance, expenses, personal affairs, etc.

[a] See III, 1078.

Trans. 9-13-41

No. 1085
September 5, 1941
FROM: Nanking
TO: Tokyo

Re #1632[a] from Shanghai to Tokyo.

From Hori to Counselor Tashiro.

Following the completion of the Consuls General’s meeting 24th, the intelligence meeting will be held for three or four days from the -—th.

The Manchuria, Tientsin, Peking, Hankow, Canton, Hong Kong, Nanking, and Shanghai Consuls General will be summoned and any others who desire to attend may do so.

(I have contacted Nanking.)

[a] Not available, dated about 1 September.

Trans. 9-13-41



No. 1086
September 4, 1941
Cir. #269.
FROM: Nanking
TO: Tokyo and Peking

Today, the 4th, Minister of Foreign Affairs JO is leaving alone by plane for Tientsin. After making a two-day stopover there, he will proceed to Peking, where he plans to remain for two or three days. He is returning to his post in Japan but doing so by this present northern trip, and en route he will pay a courtesy call on Commander OKAMURA. (In Japan, he is unofficially connected with the Embassy, but this point is for your information only.) Since the purpose of his returning by this northern way is to observe the conditions as they exist in North China today, I have sent messages of introduction and recommendation to yourself and to Director SHIOZAWA. Will you kindly do everything within your power to assist him?

Kindly send this communication to the military authorities and to the liaison officials of the East Asia Development Company.

Trans. 9-8-41

No. 1087
September 5, 1941
Circular #460.
FROM: Peking
TO: Shanghai

Peking to Tokyo as #591, 5th.

Re my #563[a].

Secret information from Hayashi on the 5th as follows:

In order to complete the understanding between Japan and EN and have it ratified, Tanabe, Chief of the General Staff of the North Army from Japan, (Accompanied by Hayashi and RYOJOCHIN) and CHOSHOJU[b] from EN will meet on the 8th at—–.

Colonel Hongo of the North China Army is scheduled to leave for TAIGEN on the 11th with the details of the agreement. It is expected to take about two weeks.

[a] See III, 1075.
[b] Chao Chen-shou Confidante of Gen. Yen Hsi-shan. N. China Army. Chinese Army Leader.

Trans. 9-11-41

No. 1088
September 16, 1941
Cir. #469.
FROM: Peking
TO: Nanking and Shanghai

(Secret.) (Message to Tokyo #611.)

Re my #591[a].

The following is confidential information given me by HAYASI who arrived in Taiyuan on the 15th.

1. Accompanied by staff officers SIGEZAKI: TSUKIYAMA of the First Army; and TSUCHIDA; the Chief of Staff of the North China Army, TANABE (HAYASI also accompanied


the group), together with the Governor of the Shansi Province who had arrived at Fencheng[b] previously, conferred on the 8th with the party headed by CHO SHO JU[c] representing EN[d]. http://Louis1J1Sheehan.us However, no agreement was signed on that day because much time was spent in exchanging telegrams between CHO and EN concerning the questions of the Northwestern Business concern and of the return of the Do Ho Railway.  Louis J. Sheehan, Esquire   After deciding that the details should be disposed of by a commission consisting of both Japanese and Chinese experts in the future, an armistice agreement was signed between the two parties at 11:00 A.M. on the 11th.

2. It seems that those on the side of EN wish to have their forces increased to 300,000 or 500,000 men (they claim that they have at present 17—–, but in reality they probably have 50,000 or 60,000 men). But this is no more than an ideal; it would take many months before it could be realized. In supplying military funds and materials, the form to be followed is the same as you have indicated in your telegram.

3. Although the Japanese have requested EN to announce the fact that he had severed his relations with Chungking and the fact of Japanese-Chinese joint action as soon as the Japanese representatives signed the armistice agreement, it is the desire of those on his side that the announcement be issued after the distribution of the Shansi Army into various sections of the province (so that they could cooperate with the Japanese forces), and after disposal has been made of the question of the treatment to be given to the Central Army and to the 8th Route Army. It is expected that all this will take several months to accomplish.

4. It is planned to use the main power of the Shansi Army for political purposes. The Japanese do not attach much military importance to the army. The value of the move lies in the fact that they have succeeded in embracing EN’s political influence and in the fact that they are now in a position to influence through him both YU HSUEH CHUNG[e] and FU TSUO I[f] (they expect to continue to institute plans of this nature). Economically, they will be able to appeal to Chinese traders in distant places through the financial interest in Shansi, and they believe that this would make a turning point in the disposal of the China incident, etc., etc.

Relayed to Shanghai and—–,—–Hong Kong.

[a] See III, 1087.
[b] In Shansi Province.
[c] CHAO CHEN-SHOU, Commander of the 8th Army.
[d] Probably YEN HSI-SHAN, member of the Central Executive Yuan and Commander of the Shansi Army.
[e] Governor of the Hopeh Province and member of the Military Commission of the Nationalist Government.
[f] Chairman of the Suiyuan Province and Commander of the 37th Division.

Trans. 9-18-41

No. 1089
September 12, 1941
FROM: Nanking
TO: Tokyo

(Secret outside the Department.)

Re your #393[a].

Since June of last year, WANG CHING-WEI has been conferring with the authorities of the Joint Army Command. The Army authorities, who sent letters to EN[b] on several occasions have—–. If EN goes to war, we think it will be satisfactory to give him not only the rank of Chairman of the Military Council, but also that of Vice-Chief of the Government. The authorities of the Joint Army Command also are in total agreement with the second point in your message concerning the conclusion of the war. Accordingly, with regard to the disbursement



of expenditures regarding this matter, it is true that WANG CHING-WEI immediately gave his consent. (According to the explanation of the Army authorities, they first of all gave 1,000,000 yuan from the secret funds in addition to the 12,000,000 yuan. It seems that they promised disbursement covering a period of three months.)

Furthermore, we have received representations on successive occasions from the authorities of the Joint Army Command and from Advisor KAGESA with regard to—–. For your information.

[a] Not available.
[b] EN SHAKU ZAN, Kana spelling for YEN SHI-SHAN, Member of the Central Executive Yuan and Commander of the Shansi Army.

Trans. 9-25-41

No. 1090
September 9, 1941
Circular #1973.
FROM: Tokyo
TO: Shanghai and Peking

Tokyo to Nanking #395.

(1) In regard to the Central China—–operations, for the present, not to exceed 30,000,000 yen will be disbursed, and further study will be given to the matter of other necessary expenditures to follow.

(2) This amount of 30,000,000 yen will be considered a refund in an amount equal to the reserves, for foreign loans and reparations moneys that have been accumulated by the affiliated six banks in North China, since 30 March 1940, the time of the setting up of the National Government and the Yokohama Specie Bank will lend this money to the responsible Japanese on the ground who are directing the work of the yen loan (?). The definite conditions etc. for drawing upon these funds will be decided upon separately.

(3) In connection with the preceding paragraph, the foreign loan money of the six banks in North China which has accumulated in Shanghai Maritime Customs incomes since 30 March 1940, when the National Government was set up, will for the time being, be held by the Specie Bank, in Chinese currency in an amount equal to the said allotment of 30,000,000 dollars, as a special reserve fund of the six banks.

(4) The intent of this will be made clear to the National Government. If the National Government desires the refunding to be done in the form of a transaction from the Specie Bank to the National Government, it will be understood that this will not interfere with changes being made in the parties to the contract.

Trans. 9-18-41

No. 1091
September 8, 1941
FROM: Nanking
TO: Tokyo

Re your #376[a].

I quite agree with you in what you say. It is regrettable that delay in the business on the part of the—–reserve bank has caused the Japanese authorities inconvenience. I, personally, will see to it that hereafter the advisors direct the work more carefully.


As to the plan of settlement which you gave in your telegram, if you are going to make it conditional, it would be necessary to have such terms that would harmonize with the actual situation and be effective, as well as adaptable. With this in view I am having Advisor AOKI go to Shanghai on the 11th. Will you, therefore, see what he suggests and discuss the matter with him.

Please contact the East Asia Development Bureau in a manner which you think best.

[a] See III, 1080-1081.

Trans. 9-12-41

No. 1092
September 8, 1941
FROM: Tokyo
TO: Nanking


(To be handled in government code.)

According to talks between the Japanese and the British, some time near the end of this month (precise date uncertain, but appreciably earlier than estimated), because of the evacuation of Japanese from Europe, a Japanese ship (name uncertain, but it will be a first-rate boat) will leave for Lisbon. Is not Ambassador to Germany, RISEIGO[a] of the People’s Government, together with his party, expecting to go by this boat? After you have made inquiry, please let me know at once. (There are no restrictions as to the number of passengers.)


Trans. 9-15-41

No. 1093
September 9, 1941
FROM: Tokyo
TO: Nanking

Re my #388[a].

It has been decided to have the said ship (the Asama Maru) sail from Yokohama (?) on the 20th directly for Lisbon by way of Durban (?). (Due to lack of time, it will not call at Shanghai.) We desire to have Li Sheng-wu and all others who desire to embark make immediate preparations so that they will not miss the boat.

[a] Not available.

Trans. 9-13-41



No. 1094
September 9, 1941
FROM: Nanking
TO: Tokyo


Re your #392[a].

I am making inquiries in regard to China’s attitude. However, in order to go to their posts in Germany and Italy, it will be necessary to pass through countries which have not extended recognition[b]. Louis J. Sheehan, Esquire   Please wire as to whether there will be any difficulty over visas or not.

[a] See III, 1093.
[b] To Nanking.

Trans. 9-13-41 http://Louis1J1Sheehan.us


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