FOREIGN RELATIONS, 1934, VOLUME III



for the sale of the Chinese Eastern Railway other than those which
had appeared in the press which he might be willing to tell me. Mr.
Youreneff replied that in spite of the Japanese statement that the
negotiations had only been adjourned, they were in fact broken off
de facto. He said that the termination of the negotiations had at
least eliminated from the scene Mr. Ohashi who was an ignorant and
obstructive element and had been brought into the negotiations only
at the insistence of the Japanese military in Manchuria. He thought
that Mr. Hirota was equally glad to get rid of him.
  I asked Mr. Youreneff whether the failure to come to terms on the
sale of the railway was not more a question of prestige and a desire
to achieve a moral victory than a mere question of price because the
Soviet demand and the "Manchukuo" offer were now separated only
by the comparatively trivial difference of Y40,000,000. The Ambas-
sador replied that the Japanese were great bargainers where money
was concerned and that Mr. Hirota when Ambassador to Moscow had
haggled for a long time with the Soviet Government over a matter of
a mere Y500. I asked the Ambassador if there was any indication as
to which party would take the next step in reopening the negotiations,
to which he only replied that this could not at present be foreseen.
  In this connection Mr. Youreneff expressed a high opinion of Mr.
Hirota for whom he said he had genuine admiration. He said he
considered him a very able and shrewd negotiator but a great deal
pleasanter to deal with than Count Uchida who was merely a mouth-
piece of the Japanese military.
General Relations.
  The Ambassador said that he thought there was little danger of a
Soviet-Japanese conflict at the present time. The Soviets were very
strong in Siberia and Vladivostok and were prepared for any eventu-
ality. Even if some inflammatory incident should occur, he thought it
could be localized, especially because the Japanese Army in Manchuria
was by no means in condition to take the offensive at present. He said
he also considered Japan's military were much more in hand than
during the regime of General Araki and that the Emperor and his
entourage were very much stronger and much more able to dictate a
sane policy for the nation. He thought that the recent withdrawal of
Admiral Suetsugu from the command of the Fleet and his replacement
by Admiral Nagano was a very important indication of this strength
and presaged a desire for a conciliatory policy in the coming naval
negotiations. Mr. Youreneff did not seem to know whether Admiral
Suetsugu was to be given another assignment or not.
  While the Ambassador avoided saying that he was either pessi-
mistic or optimistic about the general situation, his remarks gave me



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