When my brothers [Frank and Jack Lilley] arrived in Pyongyang [in 1934 and 1935], they found it larger than Tsingtao, with several six- and eight-story buildings and many taxis and streetcars, but it was a gritty, gray city under the heel of Japanese occupation. In Tsingtao we were still somewhat unaware of Japan's intentions in China, but Frank kept us clued in from his vantage point in Korea, which Japan had annexed in 1910 and which was closer to the center of Japanese military activity in northeast Asia. Frank sensed impending war from his reading of the local papers and his observations of the Japanese military in Korea, and he conveyed his thoughts to us in Tsingtao every week in his letters.SOURCE: China Hands: Nine Decades of Adventure, Espionage, and Diplomacy in Asia, by James Lilley with Jeffrey Lilley (Public Affairs, 2004), pp. 17-18
Indeed, at school he and the other students were often very close to demonstrations of Japanese military might. Across the river from PYFS [Pyeng Yang Foreign School], the Japanese had their major military airfield in Korea. Several times a week during classes, Japanese dive-bombers executed dry runs over the school, aiming for the school's athletic fields as the target for their imaginary payloads. Then, at night, searchlights would light up the sky over Pyongyang for night runs, and students would run to black out their windows.
In downtown Pyongyang, Japan's oppressive colonial policy was even more evident. When Frank and his friends would wander into town on a free day, they would see harassment of Koreans by the Japanese in the city's markets. Since Japan's annexation of Korea, many Korean farmers had chosen to protest the loss of their country by wearing white clothes, the traditional color of mourning in Korea. This practice of silent protest infuriated the Japanese authorities. Periodically, Japanese policemen on horses carrying buckets of red paint would make runs through the produce markets in Pyongyang. Armed with long paintbrushes that they wielded like lances, the Japanese policemen would smear paint on any Koreans wearing white clothes. [Does this paragraph ring true?--J.]
By the time Frank got to Pyongyang, the Japanese were turning their tactics of intimidation on the local community of Western missionaries. In January 1935, Japanese authorities called down two American missionaries, Samuel Moffet, the pioneer Western missionary in Korea, and Dr. Douglas McCune, head of Union Christian College. The Japanese demanded that the missionaries follow Japanese custom and force the Korean students at their schools to pay homage to the Japanese emperor at the city's Shinto shrine. The missionaries refused. The Japanese threatened to close the Christian schools in retaliation.
UPDATE: The bit about white clothes being a protest doesn't sound right to Kotaji, either (see comments). He concludes, "Anyway, the point is that I've never heard of wearing white clothes as a form of protest, but it might just be that the Japanese found Koreans wearing their traditional clothing offensive." I suspect this might illustrate a weakness of Lilley's book: garbled memories not carefully cross-checked against external sources. Perhaps it even illustrates the frequently criticized CIA habit of trusting secret informants while mistrusting open sources, publicly available information.