ambassador” and Tokyo the “most important embassy ever given a U.S. career diplomat.” One major episode came on 12 December 1937. During the USS Panay incident, the Japanese military bombed and sank the American gunboat Panay while it was anchored in the Yangtze River outside Nanking in China. Three American sailors were killed. Japan and the United States were at peace. The Japanese claimed that they had not seen the American flags painted on the deck of the gunboat and then apologized and paid an indemnity. Nevertheless, the attack outraged Americans and caused US opinion to turn against the Japanese. One of Grew's closest and most influential Japanese friends and allies was Prince Tokugawa Iesato (1863–1940), the president of Japan's upper house, the House of Peers. During most of the 1930s, both men worked together in various creative diplomatic ways to promote goodwill between their nations. The adjoining photograph showed them having tea together in 1937 after attending a goodwill event to commemorate the 25th anniversary Japanese gift of cherry blossom trees to the US in 1912. The Garden Club of America reciprocated by giving flowering trees to Japan. The historian Jonathan Utley argues in Before Pearl Harbor that Grew took the position that Japan had legitimate economic and security interests in Greater East Asia and that he hoped that President Roosevelt and Secretary of State Hull would accommodate them by high-level negotiations. However, Roosevelt, Hull, and other top American officials strongly opposed the massive Japanese intervention in China, and they negotiated with China to send American warplanes and with Britain and the Netherlands to cut off sales of steel and oil, which Japan needed for aggressive warfare. Other historians argue that Grew put far too much trust in the power of his moderate friends in the Japanese government. On January 27, 1941, Grew secretly cabled the State Department with rumors passed on by the Peruvian Minister to Japan: "Japan military forces planned a surprise mass attack at Pearl Harbor in case of 'trouble' with the United States." Grew's own published account of 1944 stated, "There is a lot of talk around town [Tokyo] to the effect that the Japanese in case of a break with the United States, are planning to go all out in a surprise mass attack on Pearl Harbor." Grew's report was provided to Admiral Harold R. Stark, Chief of Naval Operations, and Admiral Husband Kimmel,