THE FAR EASTERN CRISIS



problem, he seems to feel that no such settlement has been reached
with regard to Soviet Russia over Manchuria and that the determin-
ing factor for the future of the new "Manchukuo" Empire is the
relationship between Japan and Soviet Russia. Proceeding further,
he stated that the Soviets always had the idea of world revolution in
mind, that they were constantly getting stronger from a technical
viewpoint at least, and, propaganda having failed, they would try to
foment difficulties for capitalistic nations through economic, political,
and even military action. For this reason it seemed almost impossi-
ble to him for the Communists to come to any honest working agree-
ment of a permanent nature with Japan as to policies in the Far East.
  In summing up the situation as it now appears, I believe that certain
pacific influences which I outlined in my despatch No. 670 of Febru-
ary 8 are still operative, that they have enhanced the possibility of
avoiding war with the Soviets, and that tension has decreased per-
ceptibly in the last several weeks. I nevertheless feel that the concrete
achievements to date in adjusting Soviet-Japanese controversies have
been largely the work of one man, the Foreign Minister, and that fur-
ther successful steps may possibly depend on his continuance in office.
At the same time I do not believe that his efforts have thus far affected
the underlying and deep-rooted difficulties and that consequently, with
regard to the long term outlook, I am not yet inclined to modify my
view that the possibility of an eventual war between the two countries
still exists.
  Respectfully yours,                            JOSEPH C. GREW

Postscript                                          March 9, 1934.
  Late this morning, after the foregoing despatch had been typed for
forwarding to the Department in the pouch which leaves tomorrow
morning, the Soviet Ambassador came to call on me. We talked for
over an hour and since I believe that the substance of his remarks
should be submitted to the Department at the earliest moment, I have
the honor to transmit a necessarily hurried memorandum of the con-
versation as an enclosure to this despatch.


                            [Enclosure]
       Memoranduwm by the Ambassador in Japan (Grew)

                                          [TOKYO,] March 9, 1934.
  During a long conversation today with the Soviet Ambassador, Mr.
Youreneff, he first told me the present status of the negotiations for
the sale of the Chinese Eastern Railway: these negotiations are still
confined to pourparlers between the Minister for Foreign Affairs and



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