Hardy led the economic guidance team of over forty people from the airport to the Imperial Hotel in Tokyo.
The Imperial Hotel Tokyo, established in 1923, is one of Japan's premier hotels. When MacArthur first arrived in Japan, he resided here. Later, when the Allied Forces headquarters was moved to the First Building, MacArthur was given a Japanese-style manor and moved out of the hotel.
For security, Hardy had HD security personnel dispatched to Japan two months in advance, setting up an HD security branch with over 200 staff members. These personnel were responsible for the safety of the Economic Guidance Group. The government covered the expenses, as Hardy's mission was officially sanctioned.
After more than ten hours of flight, the delegation was exhausted and had a day off. The Japanese government's welcome reception was scheduled for two days later.
Meanwhile, reporters returned to their offices to cover the day's news.
Hardy's arrival and speech at the airport provided substantial information for their reports.
The next morning, headlines featured the Economic Guidance Group's arrival in Tokyo and Hardy's speech.
**Yomiuri Shimbun**:
"Yesterday, the U.S. Economic Guidance Group arrived in Tokyo to guide Japan's economic development. At the airport, Special Envoy Hardy delivered a speech…"
The article included excerpts from Hardy's speech, emphasizing statements such as: "President Johnson stated that Japan must entirely eliminate the influence of imperialism and militaristic ideologies before rejoining the international community."
Commentary followed, noting, "Special Envoy Hardy's words suggest that Japan still has a chance to reintegrate into the international community. The obstacle remains those who waged war; their imperialism and militaristic ideas have plunged Japan into crisis, still hindering its recovery."
**Nihon Keizai Shimbun**:
"Special Envoy Hardy has introduced new aid and is focused on eliminating the military industry in favor of robust civilian production. If Japan can transform into an industrial hub, it will create millions of jobs and swiftly restore the economy."
The Global Times, Hardy's newspaper, also saw considerable growth in Japan. Unlike other newspapers under profit pressures, the Global Times enjoyed subsidies that supported its rapid development. It presented perspectives often avoided by Japanese media, including:
"Special Envoy Hardy has reiterated his criticism of Japan's wartime actions, insisting that Japan must acknowledge its mistakes and sincerely apologize to break away from its imperialist past and fulfill the United Nations' transformation goals."
A photo of Prime Minister Shigeru Yoshida bowing appeared alongside the report, noting Yoshida's public repentance for Japan's wartime actions.
The reports generated a significant reaction in Japanese society. With the economy in shambles, many Japanese were struggling to meet basic needs, with some facing starvation. They welcomed Hardy's arrival as a potential lifeline. His efforts to sell unneeded military enterprises for cash were seen as a positive step.
Many Japanese viewed Hardy as a savior, transforming waste into valuable resources and revitalizing the economy. Hardy's plans to transition Japan from military to civilian industries, reduce heavy and military industries, and focus on economic recovery were broadly supported.
In the U.S. and Europe, Hardy's approach was seen as sensible. The elimination of Japan's military industries was expected to align with United Nations requirements for non-aggressiveness.
Hardy's growing fame in Japan earned him the title of "Japanese New Economic Czar," a role that significantly impacted the Japanese economy.
However, his success displeased General Douglas MacArthur. Once responsible for all aspects of Japanese administration, MacArthur now found his control over the Japanese economy undermined by Hardy. MacArthur, previously the supreme authority, felt his power diminished by Hardy's influence.
MacArthur's frustration was compounded by Hardy's recent speech suggesting Japan's potential reintegration into the international community—a hope MacArthur had not previously offered. This shift in perception cast MacArthur as the antagonist and Hardy as the hero.
MacArthur's anger intensified when Hardy, after a day and night, failed to contact him. MacArthur, as the Allied commander-in-chief, expected respect and communication from Hardy, which he felt was lacking.
Puffing on his pipe, MacArthur ordered his adjutant, "Inform the personnel below that no one is allowed to dispose of the seized military industries without my authorization."
The adjutant was taken aback. "Commander, haven't those factories already been sold by the Economic Guidance Special Envoy?"
MacArthur snorted, "I am the commander-in-chief of the Allied Forces. I oversee all matters in Japan. Everything must pass through me. Even if Congress approves, my permission is required. When Hardy arrives, inform me. I need to inspect the troops."
The adjutant realized that MacArthur's decision to withhold approval was a deliberate obstacle.
"Understood, Commander."
The adjutant proceeded to notify the personnel guarding the factories.
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After a day's rest, the delegation adjusted to the time difference. They had booked the conference room at the Imperial Hotel for meetings with representatives from the seven major consortiums to discuss next steps.
The agenda included:
1. **Accepting the Purchased Military Enterprises**: Assign management teams to assess these enterprises and prepare for their resumption if feasible.
2. **Acquiring Japanese Private Enterprises**: Finalize acquisitions or capital injections in various sectors, including banking, finance, agriculture, infrastructure, manufacturing, and more.
The seven major consortiums aimed to control Japan's economy comprehensively without necessarily owning every asset, focusing on leadership to maximize benefits. Hardy's strategy was to expand civilian production, reduce military and heavy industries, and shrink Japan's industrial capacity in line with current U.S. policy.
Hardy had brought teams of lawyers, financial experts, and managers from Wells Fargo Bank and the Hardy Group to oversee the transition.
At the meeting, Hardy instructed the team to use American materials and contracts to take over the military enterprises.
Upon returning to his room, Hardy received a telegram from Han Yezhen in Hong Kong, expressing a desire to visit or have Hardy visit Hong Kong once his schedule permitted. Hardy planned to go to Hong Kong after the initial busy period, noting the proximity.
The hotel had a special report room catering to distinguished guests. The Japanese Foreign Minister arrived to deliver an invitation for a welcome dinner at the Prime Minister's residence the following night.
Hardy accepted the invitation, agreeing to attend with his team.
Later, Hardy learned from his vice president that the military personnel guarding the factories refused to release them without MacArthur's approval. Hardy decided to request a meeting with MacArthur to resolve the issue.
However, the vice president soon reported that MacArthur was out inspecting the base and would meet Hardy upon his return. Hardy was skeptical, remembering that Prime Minister Shigeru Yoshida had mentioned MacArthur was in Tokyo just the day before.
Suspecting MacArthur was deliberately obstructing him, Hardy decided to investigate further. He contacted Duncan, the intelligence operative, to locate MacArthur and assess the situation.
Duncan confirmed MacArthur was headed for Yokosuka base, reinforcing Hardy's suspicion of MacArthur's deliberate interference.
Hardy smiled, unfazed by MacArthur's antics. Despite MacArthur's efforts to undermine him, Hardy knew his role was primarily economic, and MacArthur's actions, while frustrating, would not derail his mission.
Hardy planned to address the issue by continuing his meetings and waiting for MacArthur's return. He convened another meeting with the consortium representatives, informing them of the situation and their options.
The consortium members expressed frustration but understood the need to wait. Hardy, meanwhile, found MacArthur's behavior to be consistent with his notoriously difficult personality.
After the meeting, Hardy asked Duncan to investigate MacArthur's dealings, including potential bribes and misuse of national interests. Duncan agreed to undertake the task thoroughly.