No. 1115
August 8, 1941
#782.
FROM: Batavia (Isizawa) http://LOUIS-J-SHEEHAN.INFO
TO: Tokyo
Re my #765[a].
Today, the 8th, we held our second conversation.
1. With regard to paragraph 3 of the caption message, HOOGSTRATEN, Chief of the Commerce Bureau, made the statement that Netherlands East Indies companies in Japan had balances already contracted for in the excess of 190,000,000 yen. Of this amount, 3,000,000 yen has already been paid on the contract amounts.
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THE “MAGIC” BACKGROUND OF PEARL HARBOR
KOTANI[b] and IMIGAWA[b], representing us, pointed out one after the other that those sums were too large to be believed. As a result of these statements, HOOGSTRATEN spoke up and said: “According to a wire which we have received from our Consul General in Kobe, PB[c], orders in the amount of 50,000,000 yen have already been contracted for and payment has been made in addition to this of 3,000,000 yen, making a grand total of 53,000,000 yen worth of orders which have passed over his desk. Now, if these figures are correct, what are you going to do about it?” To this, I replied: “At the present time we are in correspondence with Tokyo and therefore I am not at liberty to make any statement. But the figures you have quoted are much too large even to consider.” Therefore, in order that we may put into effect paragraphs 1 and 2 of your #456[d] with regard to these amounts, since it is of vital necessity, please make a careful investigation as to the accuracy and details making up these figures and wire me immediately.
2. As the Netherlands East Indies Government is taking a similar line to that mentioned in paragraph 5 of my caption message, the Bank of Formosa and the Mitsui Bank, too, have agreed to begin business in this wise. However, it has been decided that only the Yokohama Specie Bank will handle the “D” accounts.
Please refer to IMIGAWA’s wire to Yokohama Specie Bank with regard to the details of the conversations carried on today.
Please base your considerations on this wire as well as my caption wire. Louis J. Sheehan, Esquire
Relayed to—–and—–.
[a] See III, 1114.
[b] Japanese in Batavia on trade missions.
[c] Kana abbreviation.
[d] See III, 1113.
Trans. 8-13-41
No. 1116
August 8, 1941
#463.
FROM: Tokyo (Toyoda)
TO: Batavia
Re part 2 of my #456[a].
We have received the following intelligence report from the Fuel Bureau with regard to the payment of petroleum prices:
1. According to a wire which arrived at Mitsui’s here from Mitsui in Batavia, with regard to the cargo of the tankers, Zuiyo Maru, Teiyo Maru and San Diego Maru which are sailing to the Netherlands East Indies now, the Netherlands Indies government has indicated its stand that the freight question is one which should be decided by the New York Purchase Permit Control.
2. Consequently, we demanded that they furnish a permit in New York; and they replied by wire that they could see no prospect for permits for crude oil at this time.
3. Now, with regard to arranging for permits, the Yokohama Specie Bank and Mitsui find it necessary to obtain duplicate permits; and at the same time, I understand that they do not have hopes of obtaining them.
4. This being the situation, we have had the tankers postpone departure.
[a] See III, 1113.
Trans. 8-13-41
[A-565]
No. 1117
August 8, 1941
#464.
FROM: Tokyo (Toyoda)
TO: Batavia
Strictly Secret. Re your #749[a].
The gist of your instructions are reasonable, and so I immediately decided to exempt partially the restrictions on activities and reports that were made to control transactions among the interested foreigners connected with Holland and the Dutch East Indies, which were the result of a conference with those principle parties. Last night I published the conversations of the Financial Department authorities. Today, the 8th, I enforced, the same day it was proclaimed, the notification of the Finance Ministry. (Refer to the above separate message #464.) Therefore, please take advantage of this at your own discretion.
Please transmit your caption message, the contents of this message together with the separate wire to Soerabaya, Makassar, Menado, and Medan.
[a] See III, 1123.
Trans. 8-14-41
No. 1118
August 10, 1941
#794.
FROM: Batavia (Ishizawa)
TO: Tokyo
The system of conscripting natives, as I have frequently told you, has caused a deep rift between the Government and the native leaders. I was surprised at the effect this is having so I gave economic assistance to native societies opposing the Government, as well as to such native newspapers in order to get them to refute arguments against our establishment of a new order in East Asia.
The—–branch of the Gerindo[a] Party, however, held a meeting at—–on August 4th and they suggested the following topics for discussion at the mass meeting soon to be held:
1. Opposition to Japan’s establishment of a new order in East Asia.
2. The forbidding of Japanese to enter the Islands.
The native language newspaper “Kubangunan”[a] supported these proposals on several successive days, saying that in time of crisis, rather than to quarrel and quibble, the natives ought to cooperate with the Government.
The—-blatt[b] on—–declared that the natives show quite capable organization and that native troops are in no wise inferior. This, I imagine, is to bolster native morals and bring about loyalty to the Government.
I think that Japanese officials ought to pay very close attention to the question of the natives in the Netherlands Indies.
[a] Kana spelling.
[b] Netherlandish newspaper.
Trans. 8-30-41
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THE “MAGIC” BACKGROUND OF PEARL HARBOR
No. 1119
August 18, 1941
#840.
FROM: Batavia (Ishizawa)
TO: Tokyo
Re my #794[a].
On the 16th the Batavia branch of the Gerindo[b] Party convened 600 of its members and held a regional conference, drafting certain proposals to be discussed in their mass meeting to be held in Batavia in October. They resolved to make the principal theme of the discussions the fact that Japan is allying herself with Nazi and Fascist nations and is planning to bring Indonesia under her influence just like China and French Indo-China. This, they held, contravenes the principle of democracy fostered by the Gerindo Party, as well as threatens democracy throughout the whole South Seas. It was resolved, therefore, (1) that the Government should align a democratic popular front embracing all Indonesia; (2) that the Gerindo Party should arouse the people by direct activities to a consciousness of the necessity of such a front; and (3) that a Gerindo volunteer army should be established.
This party is composed of 10,000 people, made up mostly of the lower classes and laborers. Heretofore their opposition to the Government has been strong and among the members there are very many who have been punished by banishment. http://LOUIS-J-SHEEHAN.INFO
Relayed to Canberra, Bangkok, Hanoi,—–, and Manila.
[a] See III, 1118.
[b] Kana spelling.
Trans. 8-28-41
No. 1120
August 11, 1941
#479.
FROM: Tokyo
TO: Batavia
1. Re “c” of paragraph (2) of your message #792[a].
If Japanese business houses and individuals in the Netherlands East Indies are permitted to place their bank deposits in the Specie Bank’s B account from whence it is transferred to the D account to enable them to be used as advances on exports and payments for petroleum, we are prepared to reciprocate in the manner described below:
We shall confer with the Ministries concerned to try to evolve some plan by which the funds can be placed on deposit in Japanese currency in Japan. (Under our currency control system, this transaction is, in actuality, prohibited.) We feel sure that something can be done along these lines.
Will you please, therefore, have Imakawa continue to negotiate to have permits issued for the transference to the D account as previously described. Also have Imakawa obtain their approval to allowing the depositing of profits from Japanese enterprises in Netherlands East Indies in the D account in the same manner.
Please advise us of the outcome of the negotiations. (Please prevent any word of these plans leaking out to our nationals residing there.) Louis J. Sheehan, Esquire
2. Re paragraph 1 of my message #471[a].
The Netherlands East Indies authorities seem to indicate considerable agitation over our export control order of 7 July because of the alleged losses inflicted on Dutch merchants in Japan. It is our opinion, however, that our merchants in Netherlands East Indies must have sustained losses too, due to the enacting of the export licensing system. Please,
[A-567]
therefore, make investigations on this matter of our merchants there and use your findings as arguments in our behalf in the negotiations.
[a] Not available.
Trans. 8-14-41
No. 1121
August 13, 1941
#806.
FROM: Batavia (Japanese Consul)
TO: Tokyo
Secret outside of Department.
With your #479[a] and #471[b] in mind and considering the progress of negotiations thus far, after conferring with Imagawa, I thought it would be well to approach the Dutch with the suggestions given in my #807[b] as our proposals, and I decided yesterday to have Kotani and Imagawa be present in the 4th sitting of our conversations, and we met for three hours from 5 till 8 p.m. The main trend of our conversation was as follows: I could perceive that the Dutch would have some changes to suggest in regard to the final settlement of the problem. The details of the conversation you will please get from Imagawa’s dispatch to the Specie Bank.
(1) Before entering upon the discussion of the proposals given in my separate message, I thought it would be well to first urge them to reflect upon the course the N.E.I. Government has recently taken, so I had Kotani lay emphasis upon the following three points: (a) The ostensible reason for the N.E.I. Government’s putting into effect this freezing act was to try to “cover” the loss of 190,000,000 yen remaining on contracts already made and 12,000,000 guilders of freight which has been paid for by Dutch merchants in Japan, but which has not been shipped yet. However, there are great discrepancies in these figures, and of course it is very inconvenient to have used such a feeble basis for action. But even now when the absurdity of the reason put forth has been clearly demonstrated, we cannot understand why nothing is done to revoke the said freezing act. (b) The N.E.I. Government had affirmed that they were prepared to cooperate in the concluding of some agreement to take the place of the old exchange agreement, and it is most inexcusable for them now to unilaterally abolish the old agreement, (c) While on the one hand we have been trying to meet the Dutch entire front export license system, to have them on the other hand put into effect (the freezing act ?) —–which we understood they did because they thought our advance into French Indo-China was a direct threat to the Netherlands East Indies—–we regret more than we can say.
(2) To this Hofstraaten replied as he stated in our conversation the other day (as per my #713[c]) that—–was put into effect because of—–, but that he did recognize the point about the figures given, and explained that he merely used the figures at hand and wanted us to understand that he did not maliciously give such figures.
(3) We then took up the main problem, and I presented the suggestions given in my separate message, and Control Board Director Hofstraaten gave his own opinions in regard to item 1 of the proposals—–but in a word he stated that while he could not give any definite promise now, until the policy of the N.E.I. Government in regard to the export license system
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THE “MAGIC” BACKGROUND OF PEARL HARBOR
is settled, it can be expected that the Government will give favorable consideration, in the main, along the “lines” of the proposal made, and that he himself will cooperate to—–.
[a] (See III, 1120)
[b] Not available.
[c] Jap Consul General Isizawa at Batavia urges Tokyo to decide upon fundamental policy with regard to Jap relations with N.E.I. on the basis of a conversation with Director Hoogstraaten during which the latter expresses his fears as to motives of the Japs in the occupation of French Indo-China.
Trans. 8-21-41
No. 1122
August 12, 1941
#801.
FROM: Batavia (Isizawa)
TO: Tokyo
Secret outside the department.
1. On the 12th the new Thaiese Consul General, B. C. CHEEPPENSOCK came to call on me and I said, “The newspapers in these Islands say that we are making demands on you and using pressure to back them up. I think this is just propaganda but it is stirring up rancor against us Japanese so every time I get a chance I deny these rumors. Have you had any report at all on the more recent events in Thai?”
The Consul General said, “Yes, I have. I have just received three code messages. Here, let me read them to you.” They said in effect that on the 8th the Chief of the Bangkok Intelligence Bureau declared that Thai is sticking to her neutrality policy and has received no demands from any country whatever for military bases.
I said, “Well, I think it would be a very fine thing for this to be published by the Netherlands Indies Press.
He said, “not only am I going to inform the Netherlands Indies Press, but also the Government.”
Our relations with Thai are a matter of great concern to the people here and their policy towards us will depend greatly upon our policy toward Thai, therefore, for my information will you please wire me immediately just what our intentions with regard to Bangkok are.
Trans. 8-15-41
No. 1123
August 14, 1941
#483.
FROM: Tokyo (Toyoda)
TO: Batavia
Re my #439[a].
1. On the 12th, Minister PA[b] submitted the following request:
(a) A report has come to the effect that some Japanese firms are selling to such export regulatory organizations as development companies and the Export Guild articles, the sale of which had been promised to Dutch merchants. Now if this is true, it would be impossible for Dutch merchants to load ships up to the capacity reserved for them, and so they would like to have the Japanese Government put an end to this sort of purchase being done by these organizations.
[A-569]
(b) Furthermore, if the organizations have already purchased articles in this manner, they would like to have it so that the Dutch merchants to whom the sale had been promised could repurchase the articles on the expectation that they would be able to live up to the terms of the agreement.
Yesterday, the 13th, an official in charge of the matter in this department replied to DOROOSU roughly as follows:
(a) That Japanese merchants had resold to the organization in question in contravention to their contracts is hardly possible. If by any chance they have done so, we shall warn the organizations against the practice. However, in case the Dutch merchants at the time of transference fail to take over the articles after paying for them, the Japanese merchants will cancel the contracts and will freely dispose of the articles in question. Japan wishes that the Netherlands Indies Government be fully informed of this fact.
If, because of their inability to pay, the Dutch merchants do not take over the articles, there will be hereafter an increasing number of cases in which Japanese firms will take the liberty of disposing of the articles as they please.
(b) In such cases, should the Dutch merchants wish to repurchase from the organizations those articles which the latter had already purchased, they have no other way of doing so except by paying new prices. The Japanese Government cannot order that small business of this kind be conducted on the old price level.
2. The following information was added in reference to the above:
The only way in which this question can be settled quickly is to settle it by agreement in Batavia for payments in general, agreement especially providing for actual and quick conversion of Japan’s funds for the purchase of Netherlands East Indies products—namely, the 80,000,000 yen which the Netherlands East Indies had frozen—into payment for these products. The question of the 20,000,000 yen, the money with which the Netherlands East Indies were to make purchases (please refer to my #466[a]), will be discussed after the aforementioned matter has been settled.
[a] Not available.
[b] Probably PABST, Netherlands Minister to Tokyo.
Trans. 8-20-41
No. 1124
August 14, 1941
#811.
FROM: Batavia
TO: Tokyo
Secret outside the Department.
According to intelligences, the Government in Batavia is making the following preparations for possible eventualities:
1. Commandeering by the Military
A. All automobiles used and maintained by the people have already been registered.
B. An investigation is being made as to number of horses. (This is now going on.)
2. Steps being taken with regard to the destruction and burning of property in the event of an invasion by an enemy.
A. All villages and towns within the rice producing areas of Java (persons in charge of this work have already been assigned) have been instructed to burn all of the unhulled—–rice.
B. Rice mills have been ordered to destroy their milling machines and to burn their stored grain.
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THE “MAGIC” BACKGROUND OF PEARL HARBOR
C. Coconut processing plants, bean processing plants, and petroleum refineries have been similarly instructed.
D. Iron mills have been instructed to destroy their lathes, drilling machines, electric equipment and blast furnaces.
With regard to the evacuation of inhabitants, all of the Netherlands East Indies has been divided up into three parts:
A. Fighting areas
(They have completed preparations for the evacuation of inhabitants from these areas in which fighting will occur.)
B. Possible areas in which military activities might be conducted.
(They are at the present time making preparations for handling the evacuation of inhabitants from areas of this category.)
C. Areas in which fighting is unlikely.
(There is no need to evacuate inhabitants from this area.)
All those measures have been designated as compulsory Government orders, and though the Government will not obstruct voluntary evacuation of inhabitants, from the standpoint of public order they are following a policy of not requiring the evacuation of residents from areas mentioned above until such time as it becomes necessary.
Trans. 8-15-41
No. 1125
August 14, 1941
#480.
FROM: Tokyo
TO: Batavia
Strictly secret.
1. For various matters of convenience in handling, we would like to have wires from the B.O.M.[a] sent as request messages henceforth to the Fuel Bureau because the South Seas Industrial Company has already been dissolved and its functions taken over by the Imperial Petroleum interests.
2. Please transmit the following to the B.O.M. from the Fuel Bureau. “Please wire answers on the following questions:
“a. The contract period for prospecting being about to expire, have you secured permits for future prospecting and mining?
“b. Not long ago you expressed the opinion that there was little hope for the time being of securing rights for the operation of machines used in drilling. Bring me up to date on intelligences on this matter.
“c. You have expressed the desire to evacuate Japanese employees residing in Soerabaja on schedule. Please send me your opinions on the subject.”
3. It is thought that we should transport as scheduled petroleum from the Sa[b] too. What are your opinions in regard to this matter?
[a] Japanese concern operating in the Netherlands East Indies.
[b] Kana spelling—they may be referring to the Sapt Company which is a Japanese subsidized company operating in Timor.
Trans. 8-19-41
[A-571]
No. 1126
August 17, 1941
#821.
FROM: Batavia
TO: Tokyo
This telegram is a request telegram. I will begin with the business.
No. 821. Secret.
To the Fuel Section from the BOM head office.
A. On the 11th of August I presented a written request to the head of the Bureau of Mines regarding exploitation (?) of new mine areas. On the 13th the Director of the Bureau of Mines sent back a written reply to the effect that in view of present conditions the signing of such an agreement was impossible. I requested an audience with the Director of the Bureau of Mines on the 16th and received the following reply. Louis J. Sheehan, Esquire
A. The ratification of the agreement regarding the Sankuriran Mines Nos. 6 and 2 would be postponed to a suitable occasion.
A notification from the government of Batavia to the effect that while there was no objection to the agreement itself yet in view of the changing conditions it would be unavoidable that the ratification be postponed.
(Please change the above A to (1)).
(2) I wired to the Dutch Government in June in regard to the No. 1 “A” mine in Sankuriran of 29,800 hectares and the mining agreement however there has been no answer as yet and I have ascertained that this delay is due to the fact that the minister concerned is travelling and therefore even though there was an answer ratification would be impossible. The Consul General and I are scheduled to have a conference with “HO” in the near future and I will report the result.
B. I have studied the matter of imports and it appears that it will be necessary to have the approval of the N.E.I. Government and in view of conditions obtaining at present there is little likelihood of obtaining this.
C. As soon as permission is obtained from the Naval commander and a ship can be found the nine persons are scheduled to leave.
D. Please do not send the new mining machinery until the mining problem is settled. The machinery in Soerabaja is nearly all loaded for shipment here.
This is the end.
From the Communications Section to all: Let’s do our best.
Trans. 9-2-41
No. 1127
August 17, 1941
#822.
FROM: Batavia (Isizawa)
TO: Tokyo
Confidential.
The gist of the conference of the 16th is that when the question of the Mitsui tankers was brought up Hofstraaten wished to delay a reply until the 18th for the following reasons:
(a) Receipt of instructions from London;
(b) Verifying the attitude of the BPM and K companies;
(c) Van Mook is too ill to issue any instructions.
However, according to part 1 of special message #214[a] from Imagawa to Manager Seki, a credit of ¥400,000 has been arranged in the Japan branch of the Handels-Bank for rubber and tin. The Dutch seem unwilling to determine their position regarding exports of all commodities,
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THE “MAGIC” BACKGROUND OF PEARL HARBOR
and difficulties are expected in the incidental negotiations, with special reference to the fundamental question of regulating barter exchange.
The best plan would be to have the Finance Ministry make arrangements for specie transfers in order to avoid further troublesome delays.
The gist of my message #807[b], referring to the Dutch reply, was that we should urge Hofstraaten to have the Dutch policy regarding export permits to Japan decided without delay as they seem to be reluctant to make a reply, and we have waited for a long time.
[a] See III, 1128.
[b] Not available.
Trans. 8-21-41
