British attempts to appease Japan
In the wake of the Manchurian Incident, which came to an end in 1933, several attempts to achieve rapprochement with Japan were made by the British policymakers. In 1934 Neville Chamberlain, the powerful Chancellor of the Exchequer, tried to conclude a non-aggression pact with Japan, and in the same year the Barnby Mission sent by the Federation of British Industries visited Japan and 'Manchukuo' with the intention of promoting British trade with 'Manchukuo', to which Britain had not given diplomatic recognition.
In 1935 Sir Frederick Leith-Ross, who was a currency expert at the Treasury and was sent to China to help currency reform there, proposed to Japan an Anglo- Japanese joint credit to 'Manchukuo', so that it could then be handed to China as compensation for the loss of 'Manchukuo'.Having dealt with these moves in detail elsewhere,22 the author would like to place these attempts in the context of British imperialism discussed in the previous section. But before doing so, one point should be made about the relations between these and the theory of gentlemanly capitalism. Both in British Imperialism 1688-2000 and Peter Cain's article, 'British Economic Imperialism in China in the 1930s',23 the meaning of the Leith-Ross Mission was much stressed as a case which supports the theory of gentlemanly capitalism. Sharing the reservation expressed by Shigeru Akita - that is, that the part played by the Leith-Ross Mission was relatively less important in the process of Chinese currency reform than was suggested by Cain and Hopkins and that the roles of China itself and of the United States should be taken into account more fully,24 the author accepts that this mission was a good example of gentlemanly capitalism at work. But at the same time the significance of the Barnby Mission should not be underestimated.
The Mission's economic aim was to probe into the chance of expanding British exports to 'Manchukuo', especially the export of capital goods. Though this aim was never fulfilled, such an activity on the part of industrial capitalists in east Asia should be properly placed in the discussion of British imperialism.What should be noted about this mission was that, just like the Leith-Ross Mission, it had a strong political character. The common feature of the overtures made by the British side in 1934 and 1935 was the inclination to maintain its influence in China on the basis of imperialistic co-operation with Japan through the de facto, if not de jure, recognition of 'Manchukuo', a puppet state created by Japan as the result of the Manchurian Incident. The abortive plan about the Anglo-Japanese non-aggression pact pointed to the acceptance of the status quo after the establishment of 'Manchukuo', and both the Barnby Mission and the Leith-Ross Mission embodied a more candid posture by giving de facto recognition to 'Manchukuo'. When Sir Charles Seligman, a member of the Mission, met Sir Montagu Norman, the Governor of the Bank of England, before the departure of the Mission, Norman told him frankly that the Barnby Mission was political though dressed as industrial.25 The Japanese government was well aware of this, and during the Mission's stay in Japan it tried to create the atmosphere that the Mission had the political task of promoting Anglo-Japanese rapprochement and symbolized a friendly stance on the part of Britain towards the outcome of the Manchurian Incident.26
In this way, those in Britain who pursued appeasement towards Japan aimed at promoting friendly relations with Japan by removing the diplomatic thorn of 'Manchukuo' and at securing or even expanding British interests in China. In a letter to his sister Hilda, Neville Chamberlain, who was the central and most active advocate of Anglo- Japanese co-operation, wrote in the spring of 1935 after a meeting with leading British industrialists in China:
I have been astonished to find what confidence they all have in the future of the China market.
They are also unanimous in thinking that while Japan will certainly take her place as China's mentor if she thinks we don't care, we have only to assert ourselves a little and she will be quite ready to work alongside of us since there is room for both. China too would be delighted if we would show that we meant to retain our interests in her country and a good deal of discussion has already taken place between Chinese and British as to the advantages of joint action in the development of railways which has only failed to materialise because of the doubts about British policy...I told the men of business that I could not say what would be done for them but they might rely on it that some decision would be taken.27 (emphasis by the author)The view that the further participation in the development of railways would be beneficial to British interests in China was, of course, not unique to Chamberlain, but it is noteworthy that he put much emphasis on this point and that he believed in the possibility of coexistence with Japan in China.
Two crucial preconditions for such an expectation were, first, that Japanese aggression in China would not further increase to the point of threatening British interests and, secondly, that Chinese nationalism would be contained within limits that were also safe for British interests. The latter condition was realized in the wake of the currency reform. Though Britain could not fully integrate China into the sterling area,28 the new currency, which Britain helped to create, worked towards economic recovery and the unification of China and as a consequence prevented Chinese nationalism from increasing anti-British momentum. On the other hand, the Japanese military was angered by the British gesture of helping China, and intensified its activities in north China. But this did not make British policymakers like Neville Chamberlain abandon their appeasement policy towards Japan. In fact, various factors affecting the Empire-Commonwealth system of Britain in the mid-1930s assisted the continuation of this attitude.
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