USS Panay Incident - Diplomacy

Diplomacy

The aftermath of the Panay sinking was a nervous time for the American ambassador to Japan, Joseph C. Grew. Grew, whose experience in the foreign service spanned over 30 years, "remembered the Maine," the U.S. Navy ship that blew up in Havana Harbor in 1898. The sinking of Maine had propelled the U.S. into the Spanish-American War, and Grew hoped the sinking of Panay would not be a similar catalyst for the severance of diplomatic ties and war with Japan.

The Japanese government took full responsibility for sinking Panay, but continued to maintain that the attack had been unintentional. Chief of Staff of Japanese naval forces in northern China, Vice Admiral Rokuzo Sugiyama, was assigned to make an apology. The formal apology reached Washington, D.C. on Christmas Eve.

Although Japanese officials maintained that their pilots never saw any American flags on Panay, a U.S. Navy court of inquiry determined that several U.S. flags were clearly visible on the vessel during the attacks. At the meeting held at the American embassy in Tokyo on December 23, Japanese officials maintained that one navy airplane had attacked a boat by machine gun for a short period of time and that Japanese army motor boats or launches attack the Chinese steamers escaping upstream on the opposite bank. But the Japanese navy insisted that the attack had been unintentional. The Japanese government paid an indemnity of $2,214,007.36 to the U.S. on April 22, 1938, officially settling the Panay incident.

But U.S. Navy cryptographers had intercepted and decrypted traffic relating to the attacking planes which clearly indicated that they were under orders during the attack, and that it had not been a mistake of any kind — thus suggesting that it was the type of unauthorized action known by the classical Japanese term Gekokujō. This was not released for the obvious secrecy reasons.