C.C.S. 643/3
8 July 1945

The enclosed, report prepared, by the Combined. Intelligence Committee in reference to paragraph 1 (1) of C.C.S. 880 as directed, by the Combined Chiefs of Staff is submitted for cons ideration.

A. J. MCFARLAND,

A. T. CORNWALL-JONES, Combined Secretariat.

	Page No
THE PROBLEM
1. To estimate the Japanese situation and intentions SUMMARY
2. Over-all situation
3. Economic situation
4. Armed forces
a. Ground
b. Air
_c. Naval
5. Defense of Japan
6. Korea, Manchuria, and North China
7* Central and South China and Formosa
8. Southern Areas
9, Pacific Islands
10. Political situation CONCLUSIONS
11. Probable Military Strategy
12. Probable Political Strategy
13. Possibility of Surrender
APPENDIX "A" - ECONOMIC SITUATION
1. General
2. Transportation
a. Shipping
b. Railroads c. Roads
3. Industry
a, General b. Shipbuilding £. Armaments d. Aircraft.
e. Electronics f. Steel g. Aluminum
n. Non-ferrous Metals
i. Chemicals and Fertilizer
4. Petroleum Products
a. Aviation Fuel Lubricating Oils
£. Other Petroleum Products
5. Coal
6. Food
7. Manpower
8. Civilian Supply
9* Regional Economic Administration
Page No,
APPENDIX "B" - ARMED FORCES
GROUND FORCES
1, Japanese
2. Puppets
3. National Volunteer Army
AIR FORCES
4. Aircraft strength
a. General
h. Production
£, Wastage
d. Future Combat Aircraft Strength
e. Trainers
5. Deployment
6. Capabilities
NAVAL FORCES
7. Strength
MAP - JAPANESE ARMED FORCES - GROUND
APPENDIX "C" - CAPABILITIES AND INTENTIONS FOR THE DEFENSE OF JAPAN PROPER
1. Present Strength and Dispositions
a. Ground
b. Air
c. Naval
2. Capabilities
3. Intentions
APPENDIX
"D"
- MILITARY SITUATION, CAPABILITIES,
AND INTENTIONS*IN KOREA, MANCHURIA,
AND NORTH CHINA
APPENDIX
- MILITARY SITUATION, CAPABILITIES,
AND INTENTIONS IN CENTRAL AND SOUTH
CHINA AND FORMOSA '
APPENDIX
- SITUATION, CAPABILITIES AND
INTENTIONS IN THE SOUTHERN AREAS
APPENDIX
- situation IN THE PACIFIC ISLANDS
APPENDIX
POLITICAL SITUATION
1. General Situation
2. Internal Political Situation
3. Foreign Policy
4. Possibility of Surrender

1. To estimate the Japanese situation and intentions.

SUMMARY

2. Over-All Situation, Recent advances in the western Pacific culminating in the capture of Okinawa, provide the Allies with bases from which effective air attacks can be directed against all important areas under Japanese control, Furthermore, the Allies are now in possession of potential forward bases for an invasion of the Japanese Home Islands, Korea, or the central China coast. Air bases in the interior of. China are being recaptured and may be more fully utilized. In addition, increasing Soviet forces in the Maritime Provinces and along the Amur River threaten Manchuria and the areas bordering the Japan Sea.

On the continent the Japanese are now forced to depend upon inadequate and vulnerable land communications. Japan's seaborne communications with all areas south of the Yangtze River have been practically severed. Sea traffic between Japan Proper and ports from Shanghai northward to southern Korea is limited to hazardous runs along the Korean and North China coasts. Even the relatively short shipping routes across the Sea of Japan and the Tsushima Straits are increasingly menaced by Allied mining, aerial, and submarine activities.

The Southern Areas are not only cut off from the Home Islands, but the Japanese find it increasingly difficult to maintain communications between the various territories in the south which are still in their possession.

Sea and air operations have virtually destroyed the capability of the Japanese naval and air forces for other than suicide operations against our forces. Blockade, and air attacks on productive capacity and concentrated reserves of materiel are seriously impairing remaining Japanese defensive capabilities. The incendiary bombing attack of Japanese cities has had a profound psychological and economic effect on the Japanese. The complete destruction of major areas in all of the important war production centers is placing a tremendous strain upon residual economy, substituting appreciably for the lack of high combat expenditures and producing a chaotic condition in administration and control, which will greatly accelerate the effects of subsequent all-out attacks upon transportation. ‘On the other hand, stocks of ammunition and ammunition production facilities still require intensive and extremely heavy attacks to produce any shortage significant to the interests of invasion and occupation.

3. Economic Situation. (Appendix “A”). The Japanese'economic position has deteriorated greatly. The resources of the Outer Zone are no longer available. Transportation between the complementary parts of the Inner Zone* (food, and raw materials from North China, Manchuria, and Korea in return for finished products of the island of Japan) has been seriously curtailed during the last few months, owing to the shortage of shipping (now only 1,500,000 gross registered tons of operable ships over 1,000 tons), Allied submarine and mining activities, and aerial bombardment. Thus, heavy industry in Japan is currently able to produce only at rates far below the capacity of existing plant facilities, For example, although peak production of steel in the islands of Japan has never exceeded 6,000,000 metric tons, current production is only at the rate of 3,500,000 tons, Production of aluminum, chemicals, and fertilizers is also hampered by the transportation difficulties.

Increasingly heavy air attacks, supplementing continued and intensified blockade, are seriously reducing Japan’s residual

production. The output of end-products has been substantially lowered. Recent aircraft production is estimated at 1,200-1,500 combat planes monthly, as compared with a peak production of 2,500 reached late in 1944. The Japanese are so short of aviation fuel that orthodox air operations of a sustained nature in any significant force are improbable, although sufficient gasoline will be available to meet their capabilities for all-out suicide attacks. The electronics industry is not able to provide the armed forces with adequate supplies of radar or of radio and sound equipment. On the other hand, reserves of ordnance, other than heavier types of equipment, are believed to be large.

Manpower is not in general a limiting factor on either Japanese production or the size of her army. Bombing of industrial facilities in urban areas has led to workers being released to agriculture.

There is increasing evidence of Japanese concern with regard to the food situation in Japan Proper. Only slight decreases in overall food supplies are, however, anticipated during 1945, although urban dwellers may be seriously affected by disturbances in distribution and losses of stocks resulting from air attacks. More acute is the shortage of consumer goods, the supply of which has been inadequate and which has been aggravated by the current bombings. Partly with an eye to an impending disruption of transport, the Japanese have set up eight regional administrations, each possessing sweeping powers to perform as well as possible in case of emergency.

4. Armed Forces. (Appendix "B")

a. Ground. The ground component of the Japanese armed forces remains Japan's greatest military asset. There are at present some 110 infantry and 4 armored divisions in the Japanese Army with a total strength of about 4,600,000 men. They are disposed as shown in the map attached to Appendix "B". This force will probably be increased by about 50 divisions by the end of the year; some of these new units may be in existence at present. About 1,000,000 men, however, are now for all practical purposes isolated from the Japanese Inner Zone.

The remainder some 95 divisions (over 4,000,000 men) will be disposed in the main Japanese islands, Korea, Manchuria, and in China north of the Yangtze.

In addition to their regular ground forces, the Japanese have some 300,000 Manchurian and 900,000 Chinese puppet troops of questionable combat value, but capable of guarding lines of communications and performing service duties. Some defections among the Chinese puppets will occur as operations progress. There will probably be a considerable reduction in their strength by the end of 1945.

b. Air. Until September 1944, the Japanese Air Porces steadily increased in size. Since that time they have suffered a substantial reduction in strength. The total strength of combat aircraft assigned to both tactical and training units has been reduced from 8200 as of 1 September 1944 to about 5,000 as of late June 1945. Thus the availability of combat aircraft has been already lowered .during this period by about 40%. as result of the greatly expanded Allied air action against Japan, the Japanese aircraft industry, as well as airfield installations, supplies, and repair facilities Will suffer greatly during the next few months.

The Japanese believe their maximum air capability to be in the employment of suicide tactics, directed primarily against ships. Currently the Japanese High Command is doing everything possible to improve the training, planning, and accomplishment of suicide air missions. Apparently they have decided to sacrifice future air potential in favor of maximum employment of all available aircraft and pilots to meet any actual invasion. Great numbers of trainer type aircraft are being equipped for suicide missions and pilot trainees are being assigned to suicide units.

The currant trend of deployment, which we expect will continue, indicates that the Japanese will in the near future have over 90 percent of their entire air strength concentrated in the main Japanese islands, Korea, Manchuria, and North China.

c. Naval. The Japanese navy has been reduced in size to about the equivalent of one small and unbalanced task fores. With the exception of two damaged cruisers, one destroyer, and some submarines in the Singapore area, remaining battleships, carriers, and cruisers appear to be immobilized in home waters. Their main capability and probable employment hereafter will be in suicide attacks by a small task force, and harassing and suicide operations by small surface craft and submarine attacks. Extensive minefields probably exist in the vicinity of important harbors and other strategic areas around tho homeland.

5. Defense of Japan. (Appendix "C"). The defense of the main islands of Japan is receiving and will continue to receive the primary attention of the Japanese.

We estimate that by late 1945 there will be available in the Japanese Home Islands and their outposts in the Ryukyus, Izu-Bonins, and Kuriles more than 35 active divisions and 14 depot divisions, which, plus army troops, will total over 2,000,000 men. The Japanese also will continue development of the "National Volunteer Army" and may form combat home defense units to supplement their regular armed forces. Fanatical resistance will be offered in the defense of any of the Hume Islands. The Japanese would commit all ground forces they could sustain in action in the defense of Kyushu and that part of Honshu which includes the Kanto Plain, Nagoya, and Osaka areas, while considerably weaker defense would be expected in other parts of Honshu, Shikoku, and Hokkaido for both logistical and strategical reasons.

We believe that in the defense of any one of the main Japanese islands, except possibly Hokkaido, the Japanese would commit against us, primarily in suicide operations, all available aircraft, either in tactical or training units. Such attacks would be continued to the limit of their capability without regard for conservation of air strength for any possible later need.

Remaining Japanese naval units would be also sacrificed to the limit of their capability in the all-out effort to repel our invasion of any one of the main Japanese islands.

6. Korea, Manchuria, and North China. (Appendix "D"). The Japanese ground forces in this area now total over 1,200,000 mon (24 active divisions and 5 depot divisions). In anticipation of a possible Soviet entry into the war, these forces will be further increased by withdrawals from Central and South China, and we believe they might have about 1,500,000 man, including more than 40-divisions in this area by the end of the year. In so far as they are able to do so, the Japanese aro preparing for an independent defense of Manchuria, Korea, and North China, and it is unlikely that any substantial reinforcements or supplies will be sent hereafter to this area from Japan I roper. Wo believe that' in the event of war with the U.S.S.R., opposition to the Soviets would be.left primarily to the Japanese ground farces and that Japan would continue to commit the great bulk of its air strength against us in defense of the Home islands.

7. Central and South China and Formosa. (Appendix "E")
The Japanese now have about 650,000 men (20 divisions) in Central and South China, and another 190,000 men (5 divisions) in Formosa. However, the rapid advance of Allied forces in the Pacific, the interdiction of Japan's shipping routes, apprehension regarding the entry of the U.S.S.R into the war, and the growing threat of Allied invasion of the east China Coast are forcing the Japanese to shift strength in China northward. We believe that the Japanese are prepared, if circumstances necessitate, to abandon all holdings in China south of the Yellow River, leaving a force of about 125,000, including 4 divisions in the Canton-Hongkong area, and a force of 160,000, including 6 divisions in the Shanghai-Nanking area to deny them to the Allies, Japanese forces in Formosa are cut off and will remain substantially unchanged in numbers.

8. Southern Areas. (Appendix "F"). The Japanese in the Southern Areas (over 600,000 men) have been cut off from the Home islands and will receive no further reinforcement or supply. Wo believe that they will form a perimeter of defense running generally through Southeast Burma, Thailand, Malaya, Sumatra, Java, Borneo, and French Indochina. Island areas outside this perimeter will be defended by local garrisons. Redistribution of forces within the area will be difficult owing to Allied action and to the very limited transportation facilities. No offensive capability exists, but defense will be determined on the part of local ground forces, using the resources initially available to them.

9. Pacific Islands. (Appendix "G"). Japanese ground forces cut off in the Pacific islands (the Mandates, Solomons, Bismarcks, New Guinea, and the Philippines), amounting to about 300,000 men, have no offensive capabilities, but will hold out to the maximum extent of their ability.

10. Political Situation. (Appendix "H”). The political situation in Japan is dominated by the progressive deterioration of the military situation. The Japanese Diet has now practically legislated itself out of existence and the government-has assumed sweeping powers that enable it to rule by decree. The government thus hopes to be in a position to act without fear of major opposition, whether it should determine to continue the war to the bitter end or to seek peace.

The Japanese still find unconditional surrender unacceptable, but they are becoming increasingly desirous of a compromise. Fully aware of the growing weakness of Japan's position, her leaders will make desperate attempts to keep the Soviet Union at least neutral, to sow civil strife in China, and to win the support of conquered peoples. In their present dilemma they are playing for time in the hope that Allied war weariness, jealousies, and conflicts of aims, or some "miracle", wifi present a method of extricating them from their admitted critical situation.

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CONCLUSIONS

11. Probable Military Strategy. The primary preoccupation of the Japanese High Command, at present is the defense of the Home Islands, especially Kyushu and Honshu, For this defense they may dispose by the end of 1945 more than 35 active divisions plus 14 depot divisions, which with army troops will total over 2,000,000 men. Except possibly in the case of Hokkaido, all available aircraft will be employed in the defense of the Home Islands, mainly in suicide operations. Their air effort might amount initially to 400 - 500 sorties of combat type aircraft and 200-300 sorties of trainer type aircraft during any 24 hour period; this effort will, however, decline rapidly. Similarly all remaining naval units will be employed in suicide operations in defense of the homeland.

The secondary preoccupation of the Japanese is to build up their forces in Manchuria, Korea and North China against the Soviet threat. There they might dispose up to 40 divisions, totalling shout 1,500,000 men, by December of this year. Reinforcements will come from Central and South China. They are unlikely to make a strong air effort in defense of Manchuria at the expense of the defense of Japan. If circumstances require it, the Japanese are prepared to abandon all of China south of the general line Tungkuan--Kaifeng--Nanking--Hangchow, except for the Canton--Hongkong pocket, which they will hold with a strong garrison.

All other areas will be regarded as of minor importance only. They will not be reinforced from the Inner Zone, but their garrisons will be ordered to resist to the last in order to contain Allied forces which might otherwise be used against Japan, and in order to deny to the Allies strategic materials and bases in their areas. Strategy in these outlying areas will, therefore, be designed to keep Japanese forces in being rather than to defend particular objectives to the last or to undertake more than, at the most, local counter-offensives.

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12. Probable Political Strategy. In general, Japan will use all political means for avoiding complete defeat or unconditional surrender. During the next few months the future political strategy of the government will exhibit the following aims: To

a. Continue and even increase its attempts to secure complete political unity within the Empire, possibly through personal rule, real or apparent, of the Emperor.

b. Attempt to foster a belief among Japan’s enemies that the war will prove costly and long drawn out if the United Nations insist on fighting until the complete conquest of Japan.

c. Make desperate efforts to persuade the U.S.S.R. to continue her neutrality, if necessary by offering important territorial or other concessions, while at the same time making every effort to sow discord between the Americans and British on one side and the Russians on the other. As the situation deteriorates still further, Japan may even make a serious attempt to use the U.S.S.R, as a mediator in ending the war.

d. Put out intermittent peace feelers, in an effort to bring the war to an acceptable end, to weaken the determination of the United Nations to fight to the bitter end, or to create inter-Allied dissension.

e. Take all possible advantage of estranged relations between the Communists and Kuomintang factions in China.

13. Possibility of Surrender. The Japanese ruling groups are aware of the desperate military situation and are increasingly desirous of a compromise peace, but still find unconditional surrender unacceptable. The basic policy of the present government is to fight as long and as desperately as possible in the hope of avoiding complete defeat and of acquiring a better

CCS 643/3

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bargaining position in a negotiated peace. Japanese leaders are now playing for time in the hope that Allied war weariness, Allied disunity, or some "miracle” will present an opportunity to arrange a compromise peace.

We believe that a considerable portion of the Japanese population now consider absolute military defeat to be probable. The increasing effects of sea blockade and cumulative devastation wrought by strategic bombing, which has already rendered millions homeless and has destroyed from 25% to 50% of the built-up area of Japan’s most important cities, should make this realization increasingly general. An entry of the Soviet Union into the war would finally convince the Japanese of the inevitability of complete defeat. Although individual Japanese willingly sacrifice themselves in the service of the nation, we doubt that the nation as a whole is predisposed toward national suicide. Rather, the Japanese as a nation have a strong concept of national survival, regardless of the fata of individuals. They would probably prefer national survival, even through surrender, to virtual extinction.

The Japanese believe, however, that unconditional surrender would be the equivalent of national extinction. There are as yet no indications that the Japanese are ready to accept such terns. The ideas of foreign occupation of the Japanese homeland, foreign custody of the person of the Emperor, and the loss of prestige entailed by the acceptance of "unconditioned surrender" are most revolting to the Japanese. To avoid these conditions, if possible, and, in any event, to insure survival of the institution of the Emperor, the Japanese might well be willing to withdraw from all the territory they have seized on the Asiatic continent and in the southern Pacific, and even to agree to the independence of Korea and to the practical disarmament of their military forces.

CCS 643/3

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A conditional surrender by the Japanese Government along the lines stated above might be offered by them at any time from now until the time of the complete destruction of all Japanese power of resistance.

Since the Japanese Army is the principal repository of the Japanese military tradition it follows that the Army leaders must, with a sufficient degree of unanimity, acknowledge defeat before Japan can be induced to surrender. This might be brought about either by the defeat of the main Japanese Armies in the Inner Zone or through a desire on the part of the Army leaders to salvage something from the wreck with a view to maintaining military tradition. For a surrender to be acceptable to the Japanese Army, it would be necessary for the military leaders to believe that it would not entail discrediting warrior tradition and that it would permit the ultimate resurgence of a military Japan.

CCS 643/3

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APPENDIX "A"
ECONOMIC SITUATION

1. General. The Japanese economic position has deteriorated considerably during the past year. Important raw materials from the Southern Areas, such as non-ferrous metals, high grade iron ore, bauxite, oil, and rubber are no longer available. The severe cut in the size of the Japanese merchant marine, rail transportation difficulties on the continent, and continuing direct attacks against Japanese industrial facilities and urban areas by U.S. bombers have reduced the war potential of the Inner Zone substantially below the levels of a year ago. The Inner Zone itself is no longer an economic entity. The hazards to enemy shipping in the Sea of Japan, particularly in the Tsushima and Korean Straits area by Allied air and submarine attacks and the mining of the coastal waters has seriously disrupted movements of essential supplies across this last remaining lifeline between Japan Proper and the continent. The shortage of minesweepers and escorts for convoys further restricts the use of these remaining shipping lanes and causes additional deterioration of the Japanese economic situation.

2. Transportation. a. Shipping. Deterioration of the Japanese shipping position begun in 19^5 and accelerated during 1944 continues to be one of the principal factors affecting Japan’s industrial effort. Heavy losses already sustained by Japan’s merchant fleet, as well as current Allied naval and air operations against the remainder of this fleet, prevent Japan from utilizing to the full extent even the resources of the Inner Zone in spite of fairly short hauls and less vulnerable routes. Despite capture of some 700,000 tons of foreign ships and an increased 1944 rate of shipbuilding,

CCS 643/3 - 12 -

Japan’s pre-war merchant tonnage of some 6,000,000 tons^ of steel ships of 1000 tons and over has been reduced, to an estimated operable 1,500,000 tons including a large tonnage of tankers. There are. in addition, a large number of smaller ships available. The need for the convoy system and the mining of the coastal waters further limits the efficient employment of the reduced shipping which is available. The present major demands on Japanese shipping are for the movement of coal, pig iron, iron ore, aluminous shale, salt, and foodstuffs from the continent; coal, lumber, and pulp from Karafuto; coal and other commodities between points in Japan Proper; commodities between points on the continent; and troops and military supplies throughout the area. ^ij^oads, The railways in Japan, supplemented by coastal shipping, are currently capable of carrying the essential industrial and military freight. Air attacks to date probably have not seriously impaired rail operations. The system of rail lines, however, is relatively vulnerable to attack by air. Steep grades and. numerous tunnels, bridges, and retaining walls are characteristic features of all the lines. Vulnerable bottlenecks exist at the rail tunnel between Honshu and Kyushu and the rail ferries connecting Honshu with Hokkaido and with Shikoku. The decline in their merchant fleet has forced the Japanese to rely, for the major portion of their imports of continental materials, upon the railways leading from North China and Manchuria to the Korean ports facing Japan. Because of the limited capacity of those lines and of operating difficulties which have been encountered, the Japanese have been able to import much less of those materials than have been available at the points of production.

CCS 643/3 - 13 -

c. Roads. The road systems of Japan and of other Inner Zone areas are not very highly developed and consist of a few trunk gravel-surfaced roads connecting the main cities and a number of rather poorly constructed and maintained connecting roads. Long distance truck transport is of little importance, and trucks have been used mainly for local distribution. There is a shortage of trucks, fuel, servicing facilities, and repair parts. 3. Industry. a. general. Because of the shortage of merchant shipping and the interdiction of transport routes, the islands of Japan are being cut off from the continental areas. The continental areas and the islands of Japan are economically complementary to each other, the former supplying Japan with raw materials and food, and the latter supplying the continent with finished products. Raw materials are being accumulated on the continent for which there is insufficient processing capacity, while Japanese processing equipment is becoming increasingly idle as stock piles decrease. Lowered war production in the Inner Zone as a whole has resulted. The Japanese have received assistance from the Germans in the form of techniques, devices, and weapons, the employment of which might have a bearing on the war in the Pacific . Among the most important items are electronics, ordnance, rockets, guided missiles, submarines, aircraft, and jet propulsion. Japanese capability to utilize this assistance effectively, however, is limited. b. Shipbuilding. We oelieve that the rate of construction of merchant ships of 1,000 gross registered tons and ©ver, which reached an average of 100,000 tons per month in 1944 has declined in recent months to about 75,000 tons and will decline progressively from now on.

CCS 643/3 - 14 -

c_. Armaments, (1) Ordnance. We estimate that the manufacture o± weapons in the Inner Zone for ground troops had produced large reserves of light weapons by 1 July 19^5 • Reserves of divisional weapons will be sufficient to equip more than pO new divisions, except for modern field artillery. Additional reserves of 1,000,000 rifles, 10,000 light machine guns and 2,000 anti-tank guns are believed to be available. No appreciable reserve of tanks or of certain important heavy artillery weapons is believed to exist. (2) Ammunition. We believe that the Japanese have accumulated in the islands of Japan a substantial stock / of small arms ammunition. There are indications, however, that artillery ammunition is in tight supply and that practice ammunition has been curtailed. Recently there has been emphasis on anti-aircraft ammunition production at the expense of other types. Depending on the number of divisions involved and the severity of the fighting the Japanese have adequate supplies of ground ammunition to resist Invasion for many months. d. Aircraft. Aircraft production has declined from a peak of about 2,500 planes per month as of the end of 1944 to a recent production of 1,200 to 1,500 aircraft per month. Bombing of aircraft assembly and engine plants and the subsidiary industries accounts for much of the decline, but an important temporary contributing factor was the dispersal of plants in the early part of 1945» As a result of dispersal, it is unlikely that production can be reduced much below its present rate by precision attacks on the factories alone. Attacks on industrial areas and transportation will have a. considerable indirect effect on the aircraft industry, however, and it is possible that four or five months of such attacks will reduce Japanese aircraft production to about 1,000 planes a month.

CCS 643/3 - 15 -

e. Electronics. The Japanese electronics industry is not able to provide the- armed forces with adequate supplies ox radar, or of radio and sonic equipment, despite the high priority given the- industry. f. Steel. The islands of Japan have plant facilities for producing over ten million tons of steel ingots annually, but neither before nor during the war has production exceeded 6,000,000 metric tons. Imports of iron ore have been declining progressively since early in the war and coal imports have been declining since at least the beginning of 1944. Domestic production of iron ore in Japan is estimated, at a maximum, at one million tons per year of iron content, to additional 2,500,000 tons of iron content are available on the continent. Some of it is being sent to Japan as pig iron and steel, but little is currently being shipped as iron ore. Scrap iron and scrap steel, domestic iron ore, and estimated imports are sufficient to support an annual steel production of not more than p,500,000 tons. There are probably no shortages of ferroalloys at this reduced rate of production. Inadequate supplies of steel are believed already to have curtailed the production of armaments. As Japan is thought to have no substantial stocks of crude or rolled steel, further decline in steel production would be reflected in additional curtailment in armament output, in shipbuilding, and in railroad and industrial maintenance. Aluminum. The aluminum industry in the Home Islands is almost wholly dependent on imports of aluminous ores from the continent. We believe that there is no substantial stockpile of such ores in Japan. Plant capacity of the Home Islands is estimated at about 150,000 metric tons annually, although production during the fiscal year beginning 1 April 1944, probably did not exceed lp0,000 tons. Current production is estimated at about 75^000 tons annually. In addition, about 55,000 tons are now being produced in Korea and Manchuria,

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some of which is shipped, to Japan. This is enough aluminum for production of airplanes at about or slightly above present rates. The blockade will eventually affect Japan’s ability to import aluminum, but in view of the small tonnage involved, end the high priority given to shipments, it will be some time before this factor makes itself felt. h. Non-Ferrous Metals. It is unlikely that supplies of copper, lead, zinc, and other metals will constitute critically limiting factors in the reduced Japanese economy. i, . Chemicals and Ferti 1 iz e r s . The Homo Islands’ production of major basic chemicals and fertilizers, alkalis (soda ash, caustic soda), phosphates, sulphate of ammonia, nitric and sulphuric acids, is hampered by shortages of salt (imported from North China and Manchuria), coal, other raw materials, and power. 4. Petroleum Products. a. Aviation Fuel. The Japanese are believed to be short of aviation fuel. Inner Zone stocks are now estimated at about 1^550^000 barrels, end Inner Zone production of aviation gasoline and alcohol available for aircraft use (measured in terms of gasoline equipment) is about 125,000 barrels a month. With such small amounts of fuel available, the Japanese Air Forces have been forced to reduce consumption to far below their 1944 monthly average, estimated at about 600,000 barrels. Training and transport operations are already considerably affected by the shortage. We believe that aviation fuel will be the limiting factor in orthodox but not in suicide combat operations. Combat efficiency will be lowered by inadequacy in training and shortages at individual bases may interfere more and more frequently with the execution of planned operations. CCS 643/3 - 17 - b. Lubricating Oils. There is a shortage of luoricating oils produced from petroleum. As a result, substitutes have been used, apparently on an increasing scale. In particular, castor oil has been used in aircraft engines, with some loss in efficiency. c_. Other Petroleum Products.. Japan's stocks of fuel and diesel oil are believed to be sufficient to last for not more than a year at estimated consumption rates. 5. Coal. Production in Japan has been declining for some time and at present may not exceed 40,000,000 metric tons annually as compared with a wartime peak of 50,000,000 tons. We estimate that during the year ending 51 March 1045 Japan imported from the continent and Karafuto about 5^000,000 tons. As a result of shipping shortages, imports of coal during the year ending 51 March 1946 may not exceed 2,500,000 tons. The coal shortage, particularly in suitable coking coals, is affecting production in basic war industries. 6. Doo^« Japan normally produces roughly 85 percent of her food supply. The bulk of the Japanese diet is provided by the staple ration. This ration, supplied originally in rice and currently by a combination of rice and rice substitutes (other grains and potatoes), requires annually some 11,000,000 net metric tons, after deduction of seed, milling loss, and non-food use. Japan's 1944 rice crop and 1945 winter grain crop, both somewhat below normal, are expected to supply roughly 9,000,000 tons net, in edible form, after deduction of waste and non-food uses. Domestic potato production and imports of Korean rice and Manchurian cereals will probably be sufficient to supply the balance of the staple requirement until the rice harvest beginning in November 1945. If not, the Japanese can draw upon their rice stockpile, estimated roughly at 2,000,000 tons. A shortage of foodstuffs is being experienced in the urban areas due mainly to distribution difficulties and the probability that government stocks and hoarded supplies have been partially destroyed by air raids. CCS 643/3 - 18 - The staple ration is deficient in proteins and protective elements., which are supplied in the Japanese diet by fish, soy beans, and vegetables. The fish catch has been reduced possibly by 50 percent since 1959₃ thereby increasing the importance in the diet of the protein supplied by soy beans. (Supply of soy beans, approximately 70 percent of which are imported from Manchuria and Korea, is believed to have been maintained at or above pre-war levels.) Supplies of vegetables have probably continued close to pre-war levels. However, inefficient distribution causes recurring shortages of supplementary food in urban areas. 7. Manpower. There has long been a shortage of technicians and skilled workers in Japan, but manpower is not, in general, a limiting factor on either Japanese production or the size of the armed forces. Induction of additional men into the armed ' forces during 19;'-5 will be offset partly by normal additions to the labor forces and by further employment of women and children and partly by a decrease in the demand for industrial labor as a result of the decline in industrial activity. In fact, industrial workers in bombed-out urban areas are being released to agriculture. 8. Civ i 1 ian,Supply. Lack of raw materials since early in the war has severely curtailed civilian supplies, particularly of clothing. The position has steadily deteriorated throughout the war. Recently, because of the impossibility of obtaining appreciable supplies of cotton, wool and materials for synthetic fibers from the continent and the effect of bombing of the industrial centers and of communications, the situation has become greatly aggravated. The supply of consumer goods is entirely inadequate to meet the needs of the population, particularly now, when so many have been bombed out of their homes and have presumably lost their belongings. Owing in part to the consumer goods shortage, there is an increasing threat of inflation. CCS 643/3 - 19 - 9. Regional Economic Administration. A regional administration of Japan was set up in mid-June by the "Extraordinary Jar Measures Bill" which provided, in the case of an emergency, for the delegation of unlimited powers to Superintendents-General of eight regional administrations. Coupled with this now administrative structure, the Army, the Navy, the banks, and the large Japanese business concerns set up corresponding administrative districts. The Japanese administration has for decades been centralized in Tokyo. The present regional decentralization is occasioned not only by the fear that the transportation and communication links within Japan may be destroyed, but also that Tokyo, the nerve center, may be made completely ineffective. The Japanese are endeavoring to make these regions as self-sufficient as possible. A broad survey of the population and the average rice crop of each district shows that only one district has a large surplus, two are very seriously deficient and the remaining five are border-line cases. Though simple equipment for resistance forces may be stocked or manufactured in the districts, complex war materials cannot be produced in each of these regions adequately for a long period of defense. CCS 643/3 - 20 - ARMED FORCES ORCWD FORCES (See attached map) 1. Japanese. The ground strength of the Japanese armed forces remains formidable. Including air and naval ground elements as well as the Army, it totals some 4,500,000 men. We believe there ore some 110 infantry and 4 armored divisions in the Japanese Army; 50 or more additional divisions will have been formed -by the end of the year, of which about half will have been formed by conversion of existing units. Some of these may be in exist ence now. Japanese ground strength in or able to be withdraw, into the Inner Zone now amounts to some 5,500,000 men, including approximately 60 divisions. By the end of the year ground strength in the Inner Zone may amount to over 4,000,000 men, including up to 95 divisions. The firepower of Japanese ground units is less than that of comparable Allied units, and in general their equipment \s not up to Allied standards. The Japanese ground forces arc particularly deficient in heavy weapons, motor transport, uno armor (only 4 armored divisions have been identified). They arc generally well trained, but there have been some instances of troops being committed to combat before the completion of their bosic training. Such troops and relatively untrained service personnel are normally employed in combat in the latter stapes of losing campaigns, as on Okinawa. The morale of the ground forces remains high, but some deterioration from previous standards is evident. 2. Puppets. In addition to the above, the Japanese maintain some 500,000 Manchurian and 900,000 Chinese puppet troops of doubtful quality and loyalty. They are used primarily, to guard CCS 643/3 - 21 - co!tanan4.cation&—and perform service duties, and. to lesser extent in combat against the Chinese. ‘Their effectiveness will bo considerably reduced as the Japanese withdraw from large areas of China. 3. National Volunteer Army, The Japanese are exerting strenuous efforts to create an effective home guard in anticipation of invasion. Below is listed the available manpower of military age (17 - 44) in Japan Proper by military districts. Logistical difficulties and the purpose of their employment would preclude the use of any substantial numbers outside their own areas. Available Manpower (17 - 44) Northern (Hokkaido) 493,000 Northeastern 927, -I- 00_______________ Eastern 3^265^800 | DECLAssimfro • East Central ⁿ ^z'" [Remainder of this page lost due scanner malfunction.] CCS 643/3 - 22 - Except for planes undergoing repairs or modification in depots or in transit to units, the Japanese have no reserves behind their present unit strength of 5,000 combat aircraft. b. Production. The Japanese aircraft industry has been heavily damaged by VLR and carrier attacks. Factories which once accounted for 45^ of aircraft assembly and 70?? of aircraft engine production have been virtually destroyed. Nevertheless, by dispersing their facilities, the Japanese have been able to maintain production during the past few months at a rate ranging between 1,250 and 1,500 combat planes a month. There is still a number of large factories producing both airframes and engines, and attacks on these plants should further reduce- production. However, net? plants replacing bombed out factories will be so widely dispersed that substantial recovery over a long period of time cannot be prevented by precision attacks on factories alone, Attacks on urban industrial areas and transportation facilities will have r considerable indirect effect on future aircraft production, and it is possible that four or five months of such attacks will reduce Japan’s aircraft production to about 1,000 planes a month. £. Wastage. Since 1 September 19^4, Japanese combat and non-combat losses have averaged more than 2,300 planes a month. This figure includes heavy losses on the ground in the Philippines and in the large scale suicide attacks of the Ryukyus campaign. Recently, the Japanese have been able to limit their losses on the ground by improved dispersal facilities and by flying reconnaissance planes, bombers, and occasionally even fighters away from Allied strikes. Moreover, now that Okinawa is secured, the scale of suicide attacks in this area will probably decline. In these circumstances it is probable that Japanese losses in the next few months will be below the monthly average given above. CCS 643/3 - 23 - d. Future Combat Aircraft Strength. Taking all factors into consideration, we believe that Japanese combat air strength will continue to decline, and in the absence of an invasion would not exceed 3,000 on 1 January 1946. Thereafter production will probably shrink. £• Trainers. In addition to combat aircraft, the Japanese now possess about 6,000 trainers, many of which have been specially equipped for suicide attacks. Trainer production is not large, and Allied attacks on training fields during the next few months should bring about a substantial reduction in trainer strength. 5. Deployment. Since the beginning of the Ryukyus campaign, air strength has been moved to Japan and Korea from other areas, and this trend probably will continue. In the near future over 90^ of the Japanese Air Forces will be concentrated in the main Japanese islands, Korea, Manchuria, and North China. Japanese combat aircraft strength in all other areas will steadily deteriorate as a result of attrition or withdrawals and the lack of replacements. 6. Capabilities. The capability of the Japanese Air Forces to operate effectively against us in either defensive or offensive warfare carried out along orthodox lines has been very greatly reduced. The Japanese themselves appreciate this fact and have concentrated their attention upon suicide tactics as the most successful method of attack with the planes and pilots at their disposal, While they will continue some training and tactical operations along orthodox lines, such orthodox employment will be intended primarily to supplement and facilitate suicide missions. Currently, the Japanese High Command is doing everything possible to improve the training, planning, and accomplishment of suicide air missions. CCS 643/3 - 24 - The Japanese apparently have decided to sacrifice future air potential in favor of maximum employment of all available aircraft and pilots} whether in training or tactical units, against Allied invasion of the Home Islands. Great numbers of trainer type■aircraft are being equipped for suicide missions and pilot trainees are being assigned to suicide units. Allocation of aviation gasoline for training purposes has been drastically reduced, and there is accumulating evidence of an actual shortage of aviation gasoline. However, except for distributional difficulties, it seems probable that the Japanese Air . Forces will be able to conserve sufficient gasoline fox¹ a shortlived all-out air effort against the initial invasion of the Home Islands. The Japanese are believed capable of developing a jet-propelled plane which could operate as an orthodox fighter or bomber, but not in sufficient quantity to be of serious consequence. The;; are attempting to develop a variety of jet-driven suicide devices, however, and the Baka, a small rocket-driven, pilot -controlled aircraft launched from a medium bomber, has already made its appearance. The Baka has not been employed in sufficient numbers to permit an appraisal of its effectiveness, but its further development, the use of the German V-l with a suicide pilot, and the appearance of other jet-driven suicide devices are possibilities . NAVAL FORCES 7. Strength, As a result of the losses sustained during three and one-half years of war, Japanese naval strength has been reduced to virtual impotency in the face of Allied naval power. In addition japan possesses no capability for any substantial recovery. The present strength of the Japanese Navy is believed not to exceed: 2 Battleships 2 Battleship-Aircraft carriers 4 Aircraft carriers (large) 3 Aircraft carriers (small) 2 Aircraft carriers (escort) 4 Heavy cruisers 2 Light cruisers. 42 Destroyers 57 Submarines CCS 643/3 - 25 - All of this strength is in home waters with the exception of two damaged heavy cruisers and a very small number of destroyers and submarines in Southern Areas. The naval force listed above would appear to have considerable potential, but its capabilities are weakened by the following factors; (1) the limited sphere of operations permits the more effective use of aircraft from land bases rather than from carriers, and the carriers become a net liability to protect; (2) two damaged heavy cruisers are in the Singapore area and their ability to return to Japan Proper is most problematical; (5) there is a. serious lack of escorts due to the shortage of heavy destroyers (1,600-2,pOO tons) and the relative ineffectiveness of the more numerous smaller destroyers (1,000 tons); (4) most major enemy naval bases are within range of Allied land or carrier based aircraft which might possibly force naval units based therein to seek refuge in the Sea of Japan. While the Japanese possess an appreciable number of submarines, their threat to Allied naval forces cannot be considered serious in view of their ineffectiveness during the past. The Japanese are primarily engaged in the construction of small ships, such as destroyers, submarines, escort craft, midget submarines, one-man torpedoes, suicide and small combatant surface craft. We believe that when Allied positions in the Ryukyus are consolidated, Japanese lines of communications from Japan Proper to all outside areas except those to the continent across the Sea of Japan will be severed. Japanese destroyers, minesweepers, and other small escort craft will concentrate on the task of protecting shipping on these remaining lifelines to the continent. However, they are already inadequate for this purpose, and this shortage will become more acute in the face of increasing Allied mining, air, and submarine attacks. This situation would be further aggravated should the U.S.S.R. enter the war. _______ CCS 643/3 - 26 - The main offensive capability and the most likely employment of the Japanese Navy from now on will be in suicide attacks by a small task force., harassing and suicide operations by smaller surface craft and submarine attacks. Extensive minefields probably exist in the vicinity of harbors and other strategic areas around the homeland. CCS 643/3 - 27 - ANNEX TO APPENDIX “B” MAP OF WESTERN PACIFIC AREA JAPANESE ARMED FORCES - GROUND 18 June 1945 (1 photostat) CCS 643/3 - 28 - [Map] APPENDIX "C" CAPABILITIES AND INTENTIONS FOR THE DEFENSE OF JAPAN PROPER 1. Present Strength and Dispositions. a. Ground. Present Japanese ground strength in the Home Islands and their island outposts (Ryukyus, Izus, Kuriles, and Karafuto) is estimated at 1,600,000 men, including some 21 active and 14 depot divisions. Additional divisions are probably in the process of•formation, and some of these may already be in existence. By the end of 19^5 this strength could be built up to over 2,000,000 men, including more than 55 active divisions and 14 depot divisions. The increase would result largely from the mobilization of local manpower, since substantial reinforcement from the continent will not be feasible. h* Air• At present there are approximately 5,000 combat aircraft assigned to tactical and training units, and of this number about 4,000 are located in Japan Proper and Korea. In addition to these combat aircraft the Japanese have about 6,000 trainer-type aircraft. Although large numbers of these trainers are based outside of Japan Proper, it is possible that within a short time several thousand will be equipped for carrying bombs and made available for suicide operations in the defense of the Home Islands. c_. Naval. Practically all of the remaining Japanese naval forces, as set forth in Appendix "B", are now located and will continue to be based in home waters. 2. Capabilities. Japan’s ability to defend the Home Islands against amphibious assault has been seriously impaired by the virtual neutralization of her navy, the deterioration of her air forces, the disruption of her communications with the continent and Southern Areas, and the heavy bomb damage suffered by her industrial facilities. She is incapable of remedying these conditions, which will progressively worsen. She retains CCS 643/3 - 29 - however, the advantages of an air force suicidally dangerous while it lastsj formidable ground forces, peculiarly difficult terrain, and a fanatically loyal population. Japanese naval forces in home waters will have only the capability of harassing and suicide attacks mainly by small surface craft and submarines. Extensive mine fields probably exist in the vicinity of important harbors and in other strategic areas around the homeland. Prior to the time when landing operations are undertaken against any part of Japan Proper^ local and adjacent air fields should be largely neutralized and the effectiveness of enemy air operations from nearby bases should be considerably reduced by our pre-invasion air attacks. However} a very large number of airfields will be within easy range and one-way suicide sorties could be flown against us directly from distant bases. We believe that low serviceability and other factors would probably prevent the enemy from launching against Allied invasion forces more than 4C0 to 500 sorties of combat-type aircraft and 200 to 300 sorties of trainer-type aircraft during any 24-hour period. Such an all-out effort could not be main-tainedj but recurring attacks of this nature may be expected on a progressively decreasing'scale, following intervals of recuperation. The employment of Baka bombs will be limited by their dependence upon suitable launching aircraft and orthodox air cover. This threat might be greatly increased, if the Japanese devise a satisfactory ground-launching device for this type of weapon. Favored by the proximity of hills and land masses, the maximum air capability of the Japanese would be mass suicide operations at night or under conditions of poor visibility. The Japanese Air Forces will have very low capaoil— ities in opposing Allied air operations and they will not be able to give effective direct support to Japanese ground troops. CCS 643/3 - 30 - Against an invasion of Kyushu or Honshu, the Japanese ground forces would exert maximum resistance. Various factors would limit the number of divisions which could be sustained in simultaneous front line action in any one area to 20 or less. An invasion of Shikoku or Hokkaido would elicit a considerably weaker reaction since these areas are less vital strategically, and also because of the logistical difficulties inherent in an attempt to reinforce and supply over water in the face of overwhelming air and naval superiority. 3. Intentions. Preparation to resist invasion of the Home Islands is Japan's overriding strategic purpose. In the time remaining every effort will be made to improve coastal defenses in threatened areas, to build up defensive forces, and to develop such auxiliary services as the National Volunteer Army. Efforts to effect administrative decentralization will also bo pressed, so that any isolated area may be able to carry on with the greatest possible degree of self-sufficiency. Psychological preparation for invasion will also be stressed. The principal concentrations of defensive ground strength will probably be in the Kyushu, Nagoya-Hamamatsu, and Kanto Plain areas. The Japanese would defend tenaciously their remaining island outposts. Against any invasion of the Home Islands, with the possible exception of Hokkaido, they would commit all available air and naval strength. The Japanese would commit all ground forces that could be sustained in action in the defense of Kyushu and that part of Honshu which includes the Kanto Plain, Nagoya, and Osaka areas. Considerably weaker defense would be encountered in other parts of Honshu, Shikoku, and Hokkaido because of logistical and strategical reasons. CCS 643/3 - 31 - Appendix ”Cⁿ C080153 APPENDIX "D;¹ MILITARY SITUATION, CAPABILITIES, AND INTENTIONS 1N KOREA, MANCHURIA, AND NORTH CHINA Present Japanese ground strength in Manchuria, Korea, and North China is estimated at 1,200,000 men,.including some 24 active and 5 depot divisions. This strength is disposed as shown in the map attached to Appendix "B". Until early in 1944 the Japanese maintained intact their forces in Manchuria (the Kwantung Army). Since then, however, they have withdrawn most of the original divisions of that army, replacing them with newly formed units. Increasing apprehension of Soviet entry into the war is now causing them to reinforce this area from Central and South China, and by the end of the year their strength in North China, Manchuria, and Korea may increase to 1,500,000 men, including more than 40 divisions. Since substantial support from Japan Proper can no longer be expected, the area will bo organized for independent defense. We anticipate that strong concentrations will be maintained in eastern Manchuria to threaten Vladivostok, in central Manchuria and in North China to meet possible Soviet attacks from the northwest, and in Korea to guard against amphibious invasion and as a reserve. At the present time the Japanese have based in Korea 550 combat aircraft and in Manchuria and North China about 400 combat aircraft. We believe, however, that air strength in Korea is and will continue to be mainly concerned with the defense against Allied forces in the Pacific. If, at some later date, the U.S.S.R. should enter the war, we believe that the Japanese would continue to commit the bulk of their air strength for the defense of Japan Proper¹ and southern Korea, leaving opposition to the U»S.S.R?primarily to their ground forces, CCS 643/3 - 32 - MILITARY SITUATION, CAPABILITIES, AND INTENTIONS 1N CENTRAL AND SOUTH CHINA AND FORMOSA The Japanese nov have about 650,000 men, including 20 divisions, in Central and South China, and another 190,000 men, including 5 divisions, in Formosa. Formosa is already cut off; Japanese strength there will remain unchanged. On the continent, however, Japanese strength is being redisposed northward and eastward as a result of increasing apprehension of Soviet entry into the war and of Allied landings from the East China Sea. We believe some 10 divisions will be so redisposed, It is probable that the coast between Ningpo and the Shantung Peninsula will be reinforced, and that a strategic reserve of some 6 divisions will be maintained in the Nanking area to meet an amphibious attack or to move north in the event of Soviet entry into the war. We anticipate that, until either of these events occurs, the Japanese will endeavor to keep open the line of the Hankow-Canton railway, and that, when forced to abandon it, they will leave some 125^000 men, including 4 divisions, to hold the Canton-Hongkong area as long as possible. If circumstances require it, the Japanese are prepared to abandon all of China south of the general line Tungkuan-Kaifeng-Nanking-Hangchow, except for the Canton-Hongkong pocket. Hereafter the Japanese will offer very little air and only negligible naval opposition in any of these areas. CCS 643/3 - 33 - APPENDIX "F" SITUATION, CAPABILITIESj AND INTENTIONS IN THE SOUTHERN AREAS The Southern Areas are cut off from Japan and soon will be incapable of significant mutual support. The air a,nd naval strength remaining there is strategically negligible. The defense of each area therefore depends upon local ground forces and locally available supplies and reserve stocks. The present disposition of Japanese ground strength in the Southern Areas is estimated to be as follows: Northern Indochina Southern Indochina Burma -Thailand Andamans- Nicobars Malaya Sumatra Java Borneo Celebes, Halmahera, Dutch New Guinea, Banda Sea area Northeastern New Guinea 7'5,000 55,000 105,000 20,000 55,000 75,000 J!-0,000 55,000 150,000 15,000 Total 605,000 Units in these areas are already generally below strength. Areas east of the Celebes arc generally inadequately supplied with munitions and rations. To the west of these areas there are stocks of munitions and rations, and there are some facilities for manufacturing small arms and ammunition. Shipping and rail facilities will be inadequate to distribute to best advantage the supplies that exist. The Japanese are endeavoring to redispose their strength within the Southern Areas in order to reinforce the Malaya Peninsula, the Tenasserim Coast, and Thailand. They will be restricted in their accomplishment of significant redispositions because of Allied action and lack of adequate transportation. CCS 643/3 - 34 - Japanese air capabilities in the Southern Areas are limited to reconnaissance, ■weak interception, and small scale suicide attacks. The naval forces remaining there can accomplish no more than nuisance attacks. Ground force capabilities are limited to a predominantly static defense of occupied localities. The Japanese will, however, defend such areas with determination, in order to inflict attrition, contain Allied forces and deny them to the Allies. Resistance in the south is unlikely to cease as long as resistance continues in the north. CCS 643/3 - 35 - APPENDIX "G" SITUATION IN THE PACIFIC ISLANDS Some 270,000 Japanese troops are now isolated in the Pacific islands, as follows: Bismarcks - Solomons 80,000 Japanese Ma ndates 100,000 Bonins 20,000 Philippines 70,000 No element of these forces has any capability other than that for a desperate, last-ditch defense of the area it occupies. CCS 643/3 - 36 - APPENDIX "H" POLITICAL SITUATION 1. General Situation. The political situation in Japan is dominated by the progressive deterioration of the military situation, particularly in the last few months. Japan’s political isolation resulting from the collapse of Germany, the loss of Okinawa and the great and growing destruction in Japan Proper by air attacks have convinced the Japanese by and large that victory for them is impossible. Consequently the present Government’s internal and external policy can only be one of desperate defense. To some this may mean a fight to obtain the best possible terms in a negotiated peace; to others it expresses a natural instinct to fight on regardless of the consequences. The theme of internal policy is national unity, and in its name further drastic measures have recently been taken to make the central Government as far as possible thoroughly representative of the whole nation, to strengthen its powers even further, and thence, as it were, to devolve upon local authority an unprecedented degree of administrative power for dealing with emergency conditions. 2. Internal Political Situation. The real Government of Japan is the invisible one, and we do not know what shifts of power have taken place behind the scene, it must be assumed, however, that main, effective control still lies essentially with military elements, if only because the army remains Japan’s greatest asset. With this important reservation it should be noted that positions in the visible Cabinet are held less and less by known military extremists, and progressively more by representatives of the Court, big business, conservative bureaucracy and moderate army and navy leadership. The Suzuki Cabinet cos 643/3 - 37 ~ Appendix ”Hⁿ 0080159 is typical in this respect and in its effort to maintain popularity by close identification with the Throne and by inclusion of members of diverse political groups. Undoubtedly such a Government is less unpopular than overt military dictatorship; undoubtedly also the Government is ox" a kind which might be expected to entertain ideas of a compromise peace} although very likely on a basis which would make no appeal at all to Japan’s enemies, To some degree its views might be made to prevail on the military extremists outside the Government , against whom the powers conferred on the Government by the "Emergency Wartime Measures Law" could be used, but the invisible Government referred to above must be expected to have its say before any decision is taken. In this connection the appointment of a strong Home Minister with a number of assistants possessing a reputation for ruthlessness indicates intention on part of the Government to keep the internal situation firmly in hand. Whatever views the Suzuki Government or individual members of it may hold about the possibilities of compromise, there can be no doubr that the Government is doing everything to ensure a desperate defense of the homeland, if no other-way out of the crisis shows itself. Recent indications are the continued emphasis on the organization of the National Volunteer Army and the really radical.effort towards decentralization of authority. The latter by giving unprecedented powers to specially constituted local authorities, provides against administrative breakdowns should Tokyo, the administrative capital of a hitherto strongly centralized country, be overrun by an invading force or communications between one part of the country and another be cut. Decentralization provides also against a transport and supplies breakdown by CCS 643/3 - 38 - contemplating a great degree of local self-sufficiency in food and munitions. The Government have taken to themselves other practically unlimited powers over manpower and property and this program is calculated, no doubt, not only to raise fighting efficiency to its maximum but also to impress japan’s enemies with the likely cost of an invasion of the Home Islands. 3. Foreign Policy. Undoubtedly the chief aims of Japanese foreign policy are to keep the Soviets out of the war and to drive a wedge between the Western Allies and the U.S.S.R. This is attested by the extremely friendly tone of the Japanese press and radio towards the U.S.S.R. The latter nevertheless continue to be a source of anxiety and foreboding. The re-appointment of Togo, former Ambassador to Moscow and reputedly friendly to the U.S.S.R., to the post of Foreign Minister which he held at the time of pearl Harbor suggests, however, that despite realistic appraisal of the meaning of Soviet denunciation on 5 April 19^-5 of the Russo-Japanese neutrality pact, Japan still hopes to propitiate the U.S.S.R. The abandonment of former Foreign Minister Shigemitsu in favor of Togo might be held to mean the abandonment of any real hope of a compromise peace with the U.S. and'Britain, but this presumption perhaps goes too far. Other aspects of Japanese policy are to keep alive Koumintang-Communist discord in China, and if possible to precipitate a civil war. At the same time the Japanese are making strenuous efforts to keep their puppet regimes in Southeast Asia, Manchuria, and Nanking under- control and otherwise to secure greater cooperation from Japan's subject peoples , Propaganda about the erstwhile Greater East Asia Co-Prosperity scheme has quietly subsided and is in abeyance, with some tacit admissions that the scheme has failed for the present. CCS 643/3 - 39 - Despite Japanese promises of "independence” and various political concessions there is unrest in all Japanese-controlled areas, and the Japanese may well he obliged in increase their repressive measures. During the next few months the future political strategy of the government will exhibit the following aims; To a. Continue and even increase- its attempts to secure complete political unity within the Empire} possibly through personal rule, real or apparent, by the Emperor. b. Attempt to foster a belief among Japan’s enemies that the war will prove costly and long drawn out if the United Nations insist on fighting until the complete conquest of Japan. £. Make desperate efforts to persuade the U.S.S.R. to continue her neutrality, if necessary by offering important territorial or other concessions, while at the same time making every effort to sow discord between the Americans and British on one side and the Russians on the other. As the situation deteriorates still further, Japan may even make a serious attempt to use the U.S.S.R. as a mediator in ending the war. d. Put out intermittent peace feelers, in an effort to bring the war to an acceptable end, to weaken the determination of the United Nations to fight to the bitter end, or to create inter-Allied dissension. e. Take all possible advantage’of estranged relations between the Communists and the Kuomintang factions in China. 4. Possibility of Surrender. The Japanese ruling groups are aware of the desperate military situation and are increasingly desirous of a compromise peace, but still find "unconditional surrender" unacceptable. Indeed the formal acceptance of "unconditional surrender" by Japanese constituted CCS 643/3 - 40 - authority'must be deemed basically unlikely, since the term probably implies to the Japanese mind the overthrow of the Emperor and the position of the Imperial House, the extinction of the Japanese traditions and of the Japanese way of life, and the abolition of the Japanese constitution. These fundamental psychological objections to formal ¹¹ unconditional surrender” as interpreted by the Japanese are so strong that not even blockade and strategic bombing on the present scale are likely to bring it about. The basic policy of the present government is to fight as long and as desperately as possible, to avoid complete defeat and in order to acquire a better bargaining position in a negotiated peace. Japanese leaders are now playing for time in the hope that Allied war weariness', Allied disunity, or some "miracle” will present an opportunity to avoid final defeat and arrange a compromise peace. As regards the Japanese people as a whole, we believe that a considerable portion of them now consider absolute defeat to be probable. The increasing effects of sea blockade and cumulative devastation wrought by strategic bombing should make this realization increasingly general. An entry of the Soviet Union into the war would finally convince the Japanese of the inevitability of complete defeat. Although individual Japanese willingly sacrifice themselves in the service of the nation, we doubt that the nation as a whole is predisposed toward national suicide. Rather, the Japanese as a nation have a strong concept of national survival, regardless of the fate of individuals. When confronted with the absolute impossibility of avoiding complete defeat, they would probably prefer national survival, even through surrender, to virtual extinction. CCS 643/3 - 41 - The Japanese believe., however, that unconditional surrender would be the equivalent of national extinction. There are as yet no indications that the Japanese are ready to accept such terms. The ideas of foreign occupation of the Japanese homeland, foreign custody of the person of the Emperor, and the loss of prestige entailed by the acceptance of "unconditional surrender" are most revolting to the Japanese. To avoid these conditions, if possible, and, in any event, to insure survival of the institution of the Emperor, the Japanese might well be willing to withdraw from all the territory they have seized on the Asiatic continent and in the southern Pacific, and even to agree to the independence of Korea and to the practical disarmament of their military forces. A conditional surrender by the Japanese government along the lines stated above might be offered by them at any time from now until the time of the complete destruction of all Japanese power of resistance. Since the Japanese Army is the principal repository of the Japanese military tradition it follows that the Army leaders must, with a sufficient degree of unanimity, acknowledge defeat before Japan can be induced to surrender. This might be brought about either by the defeat of the main Japanese Armies in the Inner Zone or through a desire on the part of the Army leaders to salvage something from the wreck with a view to maintaining military tradition. For a surrender to be acceptable to the Japanese Army, it would be necessary for the military leaders to believe that it would not entail discrediting warrior tradition and that it would permit the ultimate resurgence of a military Japan.