Occupation Without Troops. Glenn Davis
A few less squeamish American and Japanese scholars, using previously unknown or unavailable documents, have been clearing up baffling mysteries or misrepresentations in the history of the Occupation and have pieced together the astonishing story of a cohesive and puissant organization known to some as The Japan Lobby.4
While this grouping sympathized with the aims of the China Lobby in its efforts to advance the interests of the Nationalist government on Taiwan, there was a significant difference. The China Lobby, which had profound influence on American politics during the 1950s, was mainly a Kuomintang (KMT; the anti-communist party formed by Sun Yet-sen and led from 1925 to 1975 by Chiang Kai-shek) operation backed by Chinese as well as American money. The Japan Lobby, in financing and membership, was almost entirely American at its inception; and while it had strategic aims, it was concerned mainly with pushing private American interests in Japan.
The core of the Japan Lobby emerged as the ACJ, which represented views that Joseph C. Grew and his associates had promoted tirelessly for many years. During his mission to Japan, Grew had done everything in his power to lubricate U.S.-Japan relations, tacitly condoning Japanese military fascism and urging patience with its excesses in order to avoid war.
Grew's background, associations, and conduct suggest that he considered the encouragement of American trade and investments to be the primary task of an American diplomat. The scion of a pre-revolutionary New England family, Grew was brought up among the very wealthy. His cousin, John Pierpont Morgan, controlled banks and industrial firms that had strong financial interests in many countries, including Japan. General Electric, for example, in the Morgan sphere of interest, was the largest foreign investor in Japan. Perhaps it is no coincidence that Grew's predecessor, Ambassador W. Cameron Forbes, had been a director of the Morgan-controlled American Telephone and Telegraph (AT&T).5
Grew gravitated toward his own kind in Japan and was on cordial terms with leading members of the zaibatsu families, who in turn were linked up financially with America's family-controlled combines. One cannot assume on that basis alone that Grew allowed such connections to influence his conduct as a diplomat. Nonetheless, Grew made a sharp distinction between the militarists, who were rampaging in China, and the "moderate elements," including the zaibatsu chieftains, the prime beneficiaries of imperialism, with whom he thought Americans could get along well if the militarists were not antagonized. Concerned about economic relations above all, he warned that proposed economic sanctions against Japanese aggression would provoke further aggression and increase the danger of war.6
During the 1930s and 1940s, two distinct groups of Asian experts vied for supremacy in the State Department. The so-called appeasers, whose attitude toward Japan was consistently permissive, were known as the "Japan Crowd" or the "Grew Clique." Opposing them was the China Crowd, whose supporters had advocated forceful measures to halt Japanese aggression before Pearl Harbor and stern policy toward Japan after its defeat. As we shall see, the Japan Crowd not only won the adoption of its policies, which were consonant with American Cold War objectives, but succeeded in obliterating the influence of the China Crowd.
Power of the Media
For the development of a full-fledged Japan Lobby, the part played by the press was vital. Correspondents for the New York Times, the Chicago Tribune, and Henry Luce's publications, such as Time magazine, soon became devout apostles of the still-anonymous lobby and its aims.7 Newsweek's foreign editor, Harry F. Kern, knew little about Japan when the war ended. His interest was aroused by Pakenham's knowledge and feel for the country, and by its importance in the eyes of American investors with whom he associated. Kern and Pakenham, both uncompromising conservatives, were in tune with the big banks and corporations, whose purpose was to rehabilitate the Japanese and German economies as rapidly as possible at the least cost to the American taxpayer. Allied with the Grew clique, these journalists were to become extremely active in the controversy arising over the restrictive economic policy being pursued by SCAP Headquarters.8
Like Pakenham, the lawyer James Lee Kauffman was an old-timer. He had been one of only a few foreign attorneys practicing in Japan before the war, and had served as president of the influential American Association of Japan.9 A graduate cum laude of Harvard Law School and former editor of the Harvard Law Review, he had been a partner in a Tokyo law firm, Mclvor, Kauffman, Smith & Yamamoto, from 1914 to 1938, and he served on the law faculty at Tokyo Imperial University, now called Tokyo University, for five years. Kauffman had been of great assistance to American bankers in floating bond issues in Japan, and his firm represented "practically all of the American business interests there," he wrote.10 In 1938 however, the increasingly anti-foreign government passed a law under which most foreign lawyers, including Kauffman, were barred from practicing in Japan.
Kauffman surfaces again in 1946, when he wrote a letter to Joseph Ballantine, special assistant to the secretary of state. Kauffman, addressing his old friend as "Dear Joe," discusses the pre-war "Lawyer's Law" barring foreign attorneys from practicing in Japan, and recommends that it be "repealed or stricken from the books—whatever an occupying force does with laws they do not like." He hopes to open an office in Tokyo, and having heard that Walton Butterworth plans to visit Japan that summer, hints that he "would like to go there for two or three weeks and have a look around and see exactly what has happened."11 Ballantine soon became a key figure in the Japan Lobby.
Although not known yet as the ACJ by the beginning of 1947, the clique was ready to start its offensive against SCAR It is evident from correspondence that Grew, in retirement, was lobbying the State Department, where he had the most influence. It was at about this time that General George C. Marshall became secretary of state, and he soon became a bulwark of the Japan Lobby, along with Secretary of the Army Kenneth C. Royall, Secretary of Defense James V. Forrestal, his assistant defense secretary, William H. Draper, and Undersecretary of State Robert A. Lovett. These leaders were in correspondence with key men in the Japan Lobby during the 1947-49 period, if not earlier. In June of 1947, Harry Kern, through his close associate retired admiral William V. Pratt, succeeded in meeting ex-president Herbert Hoover, who agreed with Kern's ideas and encouraged Newsweek's campaign, even leaking confidential documents for Kern's articles.12
Kern's opening broadside was an article in the January 27, 1947 issue of Newsweek, entitled "Behind the Japanese Purge—American Military Rivalry." The purged businessmen were touted as "the most active, efficient, cultured, and cosmopolitan group in Japan," and those most willing to help the United States meet the communist threat. "Such persecution could help only the extreme leftists in Japan and the ever watchful Russians, the advocates of severe purges," Kern wrote.
The quality of journalism in his article, based on Pakenham's reporting, is typical of the McCarthy era. Kern stated that "some 25,000 to 30,000" Japanese business executives would be deprived of their jobs. The designated executives actually numbered about 1,900, less than one percent of the high-level executives of sizable Japanese companies. Kern further misled Newsweek's readers by asserting that the purge had been forced upon MacArthur by the "military government." This was Kern's propagandistic misnomer for SCAP's Government Section, which he accused of undermining "American capitalist principles."
In truth, the Government Section was actively promoting a free, competitive, private enterprise system in Japan, whose economy had been dominated by what MacArthur called the "private collectivism" of the zaibatsu. Kern insinuated that the purge had been undertaken on orders from the eleven-nation Far East Commission in Washington, where "the Russians had put something over." Actually, MacArthur carried out the purge on direct orders from the U.S. Joint Chiefs of Staff.
In an eloquent rebuttal, MacArthur quoted and explained those orders; they were aimed, he said, at removing from positions of economic influence ".... all persons who have been active exponents of military nationalism or aggression..." He said he had pursued that objective vigorously "... because any other course would be to ignore those very causes which led the world into war, and by so doing to invite the recurrence of future war." But, of course, Newsweek had the last word.13
MacArthur Loses a War of Words
Kauffman, too, was on a collision course with MacArthur. In February, at the behest of the Department of Commerce (then headed by Newsweek's Averell Harriman),