The Fugu Plan

by Marvin Tokayer

  In 1938 yet another fee. Conference took place in Harbin, with similar requests from General Higuchi and from Colonel Yasue who, by now, had been posted permanently to Dairen, in commuting range on a fast luxury train, of Harbin and his "good friend" Dr. Kaufman. But more important than the second FEJ Conference was a meeting called just a few weeks earlier in Tokyo a top secret get-together of the entire Japanese cabinet.

  It was called the Five Ministers' Conference; and it was never referred to by any other name in the hundreds of government memoranda based on it that circulated the length and breadth of the Japanese Empire throughout the next five years. The five ministers in attendance that December night were: Prime Minister Prince Fumimaro Konoye, Foreign Minister Hachiro Arita, Army Minister General Seishiro Itagaki, Naval Minister Admiral Mitsumasa Yonai and Seishin Ikeda who was then holding the portfolios of both the Finance Ministry and the Ministry of Commerce and Industry. These five, with the emperor himself, were the most important and most powerful men in all of Japan. All five had been kept abreast of Japanese interests in the worldwide Jewish community, and they knew of the major details and current progress of the plan to manipulate that community. Thus far, however, the plan had been only an expansion of Ayukawa's original trial balloon: the government and the country were not committed officially to anything. World events, though, and Japan's own political moves were once again forcing the country in the direction of doing something about the Jews.

  The development of Manchuria had never gotten underway. After months and months of trying to entice American capital into the region, the industrialist Ayukawa had finally given up in the summer of 1938. Capital would have to be found through other sources. Moreover, economic relations in general with the United States were deteriorating. If nothing reversed the trend, the commercial treaty which had linked the two countries since 191I would not last out the following year. The Jews, however, had once again shown their economic power. In response to the early November explosion of looting and destruction in Germany, called Kristallnacht, American Jewry had spearheaded a nationwide boycott of German goods. Japan was tremendously impressed by this remarkably successful endeavor. Like no other event in recent history, the boycott pointed up the economic power of the Jews. Japan actually benefited slightly, as Americans substituted Japanese products for the untouchable German ones. But the benefit threatened to be short-lived: Japan's increasingly close ties to Hitler were becoming a serious liability.

  Out of enthusiasm for the cultural agreement established between Japan and Germany in November 1938, several Japanese institutions had dismissed Jewish staff members. The government, too, began to follow Germany's lead on Jewish matters. The most widely publicized incident involved an Austrian professor of music, J. Gustav Vogelfut who, although he held a signed employment agreement with the well-known Takarazuka Music School of central Japan, had been flatly refused an entrance visa by the Japanese Embassy in Vienna. Such an act could have tremendously negative repercussions. Clearly, December 1938 was a time of great potential for Japan in her dealings with world Jewry. But it was a time of even greater uncertainty.

  The Five Ministers' Conference was held on December 5. Officially it was convened at the request of Army Minister General Itagaki who was having difficulty reconciling two administration factions: those in favor of promoting good relations with world Jewry in hopes of turning them to Japan's profit, and those inclined to swallow the Nazi line and have nothing to do with Jews. These divergent opinions were reflected in the cabinet as a whole. The five leaders arrived at the secret meeting not at all in agreement on what to do with or about the Jews.

  Foreign Minister Arita and a large section of army opinion were strongly against any official involvement with the Jews. Their spokesman was General Nobutaka Shioden, another participant in the Siberian Expedition who had, over the years, become fanatically pro-Nazi and anti-Semitic.

  For years, Shioden said, many countries had tried to keep a large Jewish population under control - Spain, Portugal, Russia, Germany. . . . Always, in the end, the only forms of successful "control" were slaughter or exile. Wasn't it bad enough that Japan's mainland neighbor, Russia was so thoroughly controlled by Jewish Communists? It might be suicidal to put a Jewish state in the interior of Manchukuo. After all, the region of Russia which bordered Manchukuo was Birobidzhan, a state specifically established to be a homeland for Russia's Jews! And in Birobidzhan, a large-scale road-building program was already underway. Clearly, this was a militaristic activity. Should Japan really contemplate setting up a Jewish community so near an area which was known to be a staging ground for the Russia-Jewish takeover of Manchukuo and China?

  The navy tried immediately to counter the argument with an idea that Inuzuka had been promoting for years. Naturally such a settlement should not be in Manchukuo, the naval spokesman said. Rather, it should be in the Shanghai area - in Hoto or Daido City or Minami. Probably it was not a coincidence that the Shanghai area was administered by the navy; Manchukuo was governed by the army.

  Shioden's faction was opposed not only to locale but to policy. No matter where they were settled, the general insisted, the Jews would conspire in the ruination of Japan. Referring to The Protocols of the Elders of Zion, he reminded the meeting, "We have seen what they themselves say are their ambitions, their goals: nothing less than the disruption and ultimate takeover of the world. We Japanese should listen to people who have more experience in this matter. Germany and Russia know better than we do; we must follow their advice and opinion."

  The countervailing side was led by Finance and Commerce Minister Ikeda, a supporter of Ayukawa and a disciple of Baron Takahashi. (The baron had been assasinated in his bed twenty months before by army radicals attempting to overthrow the government.) Ikeda, strongly supported by Army Minister Itagaki, the original leader of the Manchurian Faction, was equally vehement: "Of course Japan can control the Jews! No matter where we settle them, we will maintain control over all their dealings with the outside world. Their self-government will be only on a local level. After all, are we not at least as able as the Chinese? Hundreds of years ago, China permitted thousands of Jews to settle in the Kaifeng region. Did they take over? By no means! In time, China, having benefited from their cleverness and industry, calmly swallowed them up until today there is no such thing as a 'Chinese Jew.' Surely we Japanese, being even more conscious of the potential danger, can do as well.

  "And dangerous or not, we need the Jews. The settlers themselves will be an asset to Manchukuo and to Japan. As Ayukawa-san has said, 'No Japanese has ever made a good pair of shoes. But the Jewish shoemakers. . . .' Even more important, their settlements will encourage other Jews to release the capital we can't get any other way. By simply welcoming these beleaguered Europeans, we will gain the affection of the American Jews who control the press, the broadcast media, the film industry . . . and possibly President Roosevelt himself. We cannot afford to alienate the Jews. If Japan imitates Germany's severe control of the Jews, discrimination will develop in connection with our foreign trade. On the other hand, if Japan goes in the opposite direction and befriends the Jews, entirely new economic possibilities will open up before us."

  These were only the opening salvos. The Five Ministers' Conference was one of the longest and most complicated meetings held by that cabinet. Decision making in Japanese politics is a question of consensus. There is no such thing as a "rule of the majority." A discussion continues until all parties are willing to agree to a policy. Though the factions at this meeting were diametrically opposed and each was fanatically attached to its own reasoning, both agreed absolutely on one thing: the wrong step here could have very serious, even ruinous, consequences for the Japanese Empire. The term fugu was not used at the Five Ministers' Conference, as it was not used in any but the most informal of conversations. But to a man, the ministers would have agreed with the aptness of the plan's title.

  With the ministers seated at a long wooden table, their assi
stants nearby, their tea cups even nearer, the entire array of Jewish-Japanese problems was examined, every detail, every foreseeable ramification. Could a closer relationship with the Jews improve Japan's relations with the United States? Did Japan really want to improve those relations, or would it be wiser simply to plan on war? What was the extent of Jewish influence over American public opinion? Over American banking? Over the American president? (And what of the rumors that Roosevelt himself was really a Jew who had changed his name from "Rosenfeld"?) Would the right Jews - the artists, the scientists, the industrialists, the intellectuals like Freud and Einstein - want to come and settle among the Japanese? Had the Japanese been successful in changing their image after the 1931-5 debacle in Manchukuo?

  The faction favoring involvement with the Jews was extremely well prepared for the argument. It had collected intelligence reports on the so-called Jewish conspiracy, on the increasingly insecure position of Jews in almost every country in the world, even on the many divisions within the Jewish community. The very fact that these policy makers had done their homework with such impressive thoroughness angered some members of the opposing side. "You are merely creating jobs for yourselves!" they complained. "Your 'special missions' dealing with Jews will no longer be needed if we cease our relationship with them! You are thinking only of yourselves!" But on the whole, reasoned argument rather than heated name calling was the mood of the meeting.

  The discussion continued late into the night; but eventually, the necessary consensus was reached. In typical Japanese fashion, it managed to speak for both sides. For the anti-Jewish faction: "Our diplomatic ties with Germany and Italy require that we avoid publicly embracing the Jewish people, in the light of their rejection by our allies. . . ." And for the backers of the fugu plan: ". . . but we should not reject them as they [our allies] do. . . . This is particularly true in light of our need for foreign capital and our desire not to alienate America."

  Captain Inuzuka and Colonel Yasue, though not present at the meeting, were quickly informed of the resolution. Their energetic preparation had led to a significant measure of success! Now the question was to bring their scheme to life, to draw up plans for specific settlements and, even more crucial, to get the powerful Jews in America involved in its development. The fugu had been hooked and brought safely to the kitchen. Now was the time to apply the knife.

  4

  BETWEEN THEBIRTH DATE of the fugu plan in I934 and J. its coming-of-age at the I938 Five Ministers' Conference, a new dimension was added to the Japanese-Jewish relationship, a result of the ongoing war with China. In July I937, Japan had successfully attacked Shanghai. Japan's control of the city extended, however, only to its Chinese areas. There were two sectors of Shanghai which, though obviously very much in China, were legally considered to be "extra territorial." They were the International Settlement and the French Concession. These two areas contained roughly thirty-eight thousand foreign residents, including about four thousand seven hundred Jews, who had never been under the authority of the Chinese government and were definitely not under Japanese control. It was an unusual situation, but prewar Shanghai was an unusual place.

  Sitting on the Whangpoo River, only a few miles from the mouth of the mighty Yangtze - the only feasible trade link between the vast interior of southern China and the sea - Shanghai is endowed with a tremendous commercial potential. This fact was not lost on the British who, in I842, when they were enlarging their "sphere of influence" on the Asian mainland, made Shanghai one of their major bases in China. The security offered by the British stronghold soon attracted traders and fortune hunters from Europe, the Americas, and, from the end of the nineteenth century, Japan. The majority moved into the International Settlement. The smaller and commercially less important French Concession which adjoined the Settlement had a separate administration, but in both sectors foreigners lived and did business safe under the sheltering umbrella of a Western legal system and a liberal commercial code.

  The international sector of Shanghai did not exist for any one nation's glory, for any one culture's pride, for any one religion's propagation: its sole raison d'ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚ªtre was business. And this was business in the form of capitalism hardly constrained by government edicts, and often not at all by the forces of morality. Such as it was, the government of the International Settlement was administered by a municipal council which, by the 1930s, was made up of five British, five Chinese, two Americans and two Japanese. It provided little in the way of municipal services - schools and hospitals, for instance, had to be either privately or charitably supported - and it demanded equally little in return. For anyone of any nationality, the International Settlement meant the ultimate in freedom. Even after the United States had begun closing her doors to "the tired, the poor, the huddled masses," Shanghai remained open. No passport was asked for, no work permit was needed, either to manage vast enterprises in the magnificent offices lining the embankment, named the Bund, or to swelter in the tiny, one-roomed factories crammed into the tangle of dead-end lanes.

  From the beginning, Shanghai was as open to Jews as to anyone else; and from the beginning, Jews came. One of the first Jewish companies to be established there as early as the 1840s, was David Sassoon and Sons, Ltd., which set up a Shanghai branch of its already successful Bombay trading and banking company. Sassoon who came originally from Iraq, was soon joined by other Sephardic (Middle Eastern) Jews - the Abrahams, the Hardoons, the Kadoories and others, and most of these families, in time, took British citizenship. In prewar Shanghai, the Sephardim represented wealth and power out of all proportion to their numbers. Silas Hardoon, for example, had the unique distinction of being appointed to both governing councils - the international and French at the same time; the company run by Sir Victor Sassoon, a slim, graying, dignified millionaire known as "The J.P. Morgan of the Orient," owned Shanghai real estate valued at nearly nine million pounds sterling. The president and more than a third of the ninety-nine members of the Shanghai stock exchange were Sephardic Jews. Yet, in the thirties, there were in total no more than seven hundred Sephardim in Shanghai.

  From around the turn of the century, an expanding community of Ashkenazic (European) Jews, mostly from Russia, joined the Sephardim. They came down to Shanghai in waves after each of the successive upheavals in the tsar's empire. The final contingent arrived from Manchuria in the early 1930s, driven out by the Japanese. Politically, the overwhelming majority of Ashkenazim were "stateless"; most had lost their Russian citizenship for their nonsupport of the Communist regime. By the time Japan took control of the Chinese areas of Shanghai in 1937, the Russian Ashkenazim numbered about four thousand. Socially and economically, they were a mixed lot. Some, particularly the earlier arrivals, had been successful. They, or their children, were now part of the comfortable middle-class foreign communities in the Settlement or the Concession. Others were still trying to pull themselves up from the bottom.

  Almost invariably, the least affluent lived in an area of the International Settlement called Hongkew, a riverside section also heavily populated by Japanese. This was primarily a commercial area, not grand international commerce as on the Bund, but local trading: farmers' markets, hat shops, pickle shops, and Chinese and Japanese department stores. The cost of living in Hongkew was a third less than in other parts of the Settlement.

  During the mid-1930s, the Ashkenazic community of Shanghai was swelled by increasing numbers of refugees from Germany and Austria. These early emigres were, as a group, far more financially secure than those who fled later. They had had the time to organize their departure - either by ship or through northern China to Shanghai. Unlike those who followed later, these refugees, some fifteen hundred by the end of 1938, had been allowed to take a certain amount of money with them, and generally they had not been relieved of all their personal pos
sessions at the German border. They were, therefore, better prepared economically and psychologically to survive the devastating change from Central Europe to the heart of the Orient. But both waves of refugees settled in Hongkew, at least at first.

  The 1937 takeover of Shanghai presented the Japanese "Jewish experts" with exciting new possibilities. Although the international sectors remained nominally free, the Jews became unquestionably more vulnerable to Japanese influence. Even the wealthy Sephardim were approachable. Inuzuka began to spend more and more of his time in Shanghai, and he was assigned to the Naval Bureau there full-time in April 1939. Within months, the entire focus of the Jew-utilization plans began to shift away from Manchukuo. Meetings were no longer held in Dairen or Harbin but in Shanghai; and a new face began appearing at the meetings, that of the Japanese consul general, Shiro Ishiguro. Ishiguro was less a "Jewish expert" than a Gaimusho liaison delegated to keep track of the military's involvement in this aspect of foreign affairs. From the spring of 1939, three men - Captain Inuzuka, Colonel Yasue and to a lesser extent Consul General Ishiguro - assumed responsibility for executing the cabinet policy laid down at the lengthy December 5 meeting. They were the ones who had to decide precisely how the Jews were to be manipulated, how a refugee settlement scheme was to be initiated, how it was to be presented to those potentially able to finance it. Those three men now assumed the duty of preparing for their Emperor the tastiest and most nourishing dish imaginable, not a deadly poison.

  Inuzuka, Yasue and Ishiguro met week after week in the Shanghai Consulate or, when special secrecy seemed called for, on the ten-thousand ton Japanese battleship Izumo which was moored within sight of the Consulate off the Shanghai Bund. To achieve success, they would need to walk a tightrope. If they tilted too far to one side, the Jews would see through their machinations, and their cause would be utterly lost. If they leaned too far in the other direction, those "most clever and tricky internationalists" would overwhelm the poor, innocent Japanese. In Yasue's words "We cannot develop northern China without the Jews; therefore it is proper to use them; but care should be taken . . . that we can properly defend ourselves from a potential enemy who may one day devour us." Inuzuka was less delicate: "Jews must be strangled by the throat if they do not cooperate with us."