Army v. Diet

Ever since the Japanese occupation of Manchuria in 1931, which was precipitated by Japan's Army leaders in defiance of the Cabinet's more conciliatory policy (TIME, Sept. 28, 1931 et seq.}, the spunky Military have successfully taken the offensive against Japan's civilian government. A renascence of sword-flourishing nationalism, fostered by the Army leaders has swept over Japan and has just been given still more punch by the Japanese-German agreement to fight Communism (TIME, Dec. 7) and by the even more recent Japanese-Italian accord in which Japan recognized Mussolini's conquest of Ethiopia. Last week the Japanese Diet gathered for its 1937 session and called on the carpet before Japan's politicians were Foreign Minister Hachiro Arita and War Minister General Count Juichi Terauchi. On the first day of the session last week Foreign Minister Arita had to face critics of his frankly anti-Communist foreign policy. He stoutly denied he was interested in joining Japan to the Fascist group in Europe, said he wanted only to protect Manchukuo from Communist penetration. At these words, venerable Kunimatsu Hamada, a leader of the Seiyukai (minority party), rose to his feet, hurled with tacit approval of the majority party (the Minseito) furious accusations that the Army leaders aim at Fascism, that the Cabinet are "mere Army puppets!" To retort, up jumped fiery War Minister Count Terauchi. Amid civilian hoots and catcalls he said Mr.

Hamada was "insulting," claimed the Army was not Fascist and was "cooperating with the people." Hamada then worked himself up to a typical Japanese nervous frenzy, screamed, "I will kill myself by hara-kiri if it can be proved that the Army and the Cabinet are not hand-in-glove!" Riotously the session adjourned. To the Imperial Palace rushed Premier Koki Hirota, advised bespectacled Emperor Hirohito to suspend Parliament for two days. But War Minister Terauchi's blood was at boiling point. He demanded that the Cabinet advise the Emperor to dissolve the Diet and order fresh elections. He relied on the fact that he and Navy Minister Admiral Osami Nagano are answerable ultimately only to the Emperor. He felt confident that with the Navy Minister's backing he could throw a big enough wrench into the parliamentary machine to halt it now, perhaps wreck it permanently. Now came the big surprise.

Navy Minister Nagano, instead of lining up with War Minister Terauchi, went over to confer with the politicians, the "despised civilians." Not because he was opposed to War Minister Terauchi did Navy Minister Nagano refuse to back him. His reason, and he was probably right, was that he thought that he and Terauchi would more easily get the present Diet to vote three billion yen ($850,000,000) for the Army & Navy than perform the same feat with a Diet elected by more or less angry Japanese voters who knew the Army had forced dissolution. In Tokyo, however, it is almost impossible for a Cabinet to exist if either or both Army and Navy Ministers do not pull with the Cabinet, and the Hirota Cabinet resigned. This week Emperor Hirohito, after conferring with Prince Saionji, last of the Emperor's hereditary advisers, called upon Kazushige Ugaki, retired Army General and onetime Governor-General of Korea, to form a new Cabinet. Preceding this grim political struggle in Tokyo was a sudden and at first mysterious halting of exchange transactions which tied up millions of yen in Tokyo and slowed up business with Japan all over the world for some 13 days. The London market had comparatively little difficulty in liquidating" its yen contracts, but Washington was perplexed and anxious because U. S. markets were badly clogged. Middle of the week the Governor of the Bank of Japan, Eigo Fukai, "explained" that the ban was only a "temporary delay," that Japanese banks were working with increased staffs to straighten the tangle. Said he: "It was necessary to stabilize the situation by slowing down unnecessary imports. In a few days exchange contracts will again be coming into the market."

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