I am sorry, maybe I'm just stupid, but I don' t see what the quote is, you arer writing about?
What did Kiichi actually say?
Even without getting this, I am deeply convinced that "the things that Ueshiba did, ... were very very old"!
I had the same problem. The only quote I could find was when Ueshiba told Henry Kono he couldn't do what Uesiba did because Kono didn't understand yin and yang.
Interesting stuff about Kiichi, but I didn't find what he said. I got the idea, though, that Kiichi's statement inspired Morihei's statement. Maybe it wasn't what he "said" so much as what he taught, which was here: "Kiichi Hogen also had a reputation as an expert in Onmyodo, also called Inyodo (陰陽道), which is literally "The Way of In and Yo" ("In and Yo" = "Yin and Yang", for the Chinese speakers)."
This does seem to be exactly the same line that Donn Draegger described in his budo series.