1942: Japan

In barely more than four months — from January until the beginning of May, 1942 — Japan virtually completed the campaign of conquest initiated at the end of 1941. When the drive was over a large part of the world's colonies lay under a new master, and the British and American public was beginning to ask whether the old colonial system could ever be revived. The new Japanese empire represented a very powerful combination of territories, populations and resources. The Philippines, Netherlands East Indies, Malaya, Burma, Thailand and French Indo-China contained about 150,000,000 people, as well as crucial industrial raw materials and food crops, including oil, rubber, tin, and rice. The seizure of this vast wealth benefited Japan directly by helping to support its war machine and indirectly by depriving the United Nations of essential commodities.

Malaya; Fall of Singapore.

Japan's first major objective in 1942 was the seizure of Singapore, key British air and naval base on Singapore Island at the southern tip of British Malaya. Japanese tactics, simple and effective in character, consisted in the main of infiltrating the defenders' lines on the Malaya peninsula with troops carefully trained for jungle warfare and then executing enveloping actions. As a result, despite considerable bravery, the Indian, British, and Australian forces were unable to do more than fight a series of rearguard battles. This Japanese superiority in tactics was accompanied by outright superiority in the air. In numbers there was no great disparity, but Japanese forces were concentrated, while Imperial troops, at least in the beginning, were spread over the peninsula, giving the invaders the advantage at most points. The defense suffered also from the apathy of almost the entire native population and the treachery of a few who served the enemy as guides and spies. Perhaps most important of all was the colonial mentality of the rulers of Malaya and Singapore, who, supremely confident of their position, had never imagined the campaign as it actually occurred, but had always expected a naval assault which would be repulsed by Singapore's powerful guns.

From Dec. 7, 1941, when the invasion of Malaya began, it took the Japanese about nine weeks to reach the gates of Singapore. On January 12 they entered Kuala Lumpur, a great rubber center and Malaya's second most important city. Four days later Allied hopes rose when an Australian division came to the support of tired British and Indian troops, but despite an initial success against Japanese tanks the newcomers also had to retreat. Finally, on January 31, the defenders withdrew to Singapore Island, and the causeway connecting the mainland was breached by explosives. On Feb. 9, after days of artillery bombardment, the Japanese effected night landings on the island, duplicating their Hong Kong invasion tactics of the previous December. Within a day or two Japanese tanks were crossing the repaired causeway, and on Feb. 15 the Singapore garrison surrendered unconditionally. The Japanese claimed that 60,000 prisoners were involved.

Conquest of the Indies.

While advancing down Malaya, the Japanese prepared for the next phase of their campaign by establishing themselves on the outer islands of the Netherlands East Indies. Their object was to strip the main island of Java of the defenses represented by Borneo and the Celebes, as well as Singapore. The first landing on Dutch soil occurred early in January off the east coast of Borneo at Tarakan, site of valuable oil wells which the Dutch claimed to have destroyed. By Jan. 21 the northern arm of neighboring Celebes had been occupied. During the following week United States warships and Dutch and American aircraft sank or damaged many Japanese transports and naval vessels in the Macassar Strait — direct sea channel between Borneo and Celebes leading to Java — but this setback to the invaders was merely temporary. On Feb. 3 the main Indies naval base at Surabaya was raided for the first time, and within a week Batavia, the capital, likewise received its baptism from the air. On Feb. 14 parachute troops invaded Sumatra, the large island leading from Malaya to Java, and some days later Japanese forces secured a foothold on Bali, directly east of the main island. From these two points the invasion of Java was launched on Feb. 27 with landings that threatened Batavia and Surabaya. Although the Japanese had previously suffered significant ship losses, they succeeded, between Feb. 27 and March 1, in destroying or putting out of action the remaining United Nations naval forces in the Java Sea. Five Allied cruisers, six destroyers, and one sloop were sunk, depriving the Indies of their last maritime defenses. Superior in numbers and equipment at all points, the invaders seized Batavia on March 5 and shortly afterward overpowered the Allies at Bandung. Although sporadic resistance continued elsewhere in the islands, the defense of the Indies was, in effect, at an end. The only circumstance slightly unfavorable to the Japanese was the destruction of oil wells by the Dutch who, in contrast to the defenders of Malaya, carried out a carefully planned scorched-earth policy.

Burma Invaded and the Burma Road Closed.

At the same time a more extended campaign was being waged in British Burma, a key territory leading to India and linking China with foreign supplies by way of the Burma Road. The Japanese invasion began in mid-January, and by the second week in March the capital at Rangoon had fallen. Driving up the Irrawaddy River in the west, where the British were defending Prome, and up the Sittang in the east toward Chinese troops at Toungoo, the Japanese took full advantage of the British failure to establish effective military cooperation with the Chinese. In constant fear of being outflanked, the forces on each front were alternately obliged to retire by the withdrawal of their allies on the other. Toungoo was evacuated at the end of March and Prome early in April. Less than two weeks later, after destroying the oil fields, the British gave up Yenangyaung. On April 29 the Japanese seized Lashio, terminus of the Burma Road, and by May 5 they had reached the Chinese frontier, where they pushed across into Yunnan province.

Battle of the Philippines.

The path of conquest was more difficult in the Philippine Islands where Filipino and American troops under General MacArthur and his successor, General Wainwright, resisted for several months. Although the issue was never in doubt, the ability of the defenders to slow down the Japanese indicated the great power of colonial forces fighting for themselves. The majority of the men on Bataan peninsula off Manila Bay were Filipinos who had good reason to believe that after the war their country would become free and not remain an American possession. This — and the quality of their leaders and fellow-American soldiers — laid the basis for continuing resistance to numerically superior Japanese troops supported by tanks and dive bombers. On some occasions the United States forces even delivered temporary counterblows, as on Jan. 25, when the Japanese were driven back on Bataan. A week later an attempt to land on Corregidor, American island fortress in Manila Bay, was smashed after the invading launches and barges had been heavily bombarded. Throughout this period a small group of American torpedo boats used their meager strength against Japanese shipping, and the American air force, while its planes lasted, delivered several useful blows. In the latter part of February and the first three weeks of March there was a deceptive quiet on the part of the Japanese, who were preparing for the final assault while the defenders, who had been on short rations since early in January and lacked essential medicines, were growing physically weaker every day. The hopelessness of the situation was revealed on March 17 when General MacArthur arrived in Australia after leaving the Philippines at the order of President Roosevelt. Five days later Japanese General Yamashita demanded the surrender of the new American commander, General Wainwright, but received no answer.

The all-out Japanese assault was launched early in April, forcing the defenders to withdraw to new positions. On April 9, in replying to a Presidential message authorizing him to make any decision he considered necessary, General Wainwright referred to the seriousness of his position and the physical exhaustion of his men. In Washington the Secretary of War announced that there were less than 37,000 troops on Bataan facing between 200,000 and 300,000 Japanese. Supplies had been sent to Corregidor, but of every three ships almost two had been sunk. On April 10 General Wainwright reported that communications with Bataan had been cut for twenty-four hours. There followed almost a month of Japanese bombing attacks on Corregidor and the American-held Forts, Hughes, Frank, and Drum in Manila Bay. During the first four days of May, Corregidor alone was subjected to thirteen air raids a day. On the night of May 2 the Japanese effected a landing on the island, and on May 6 General MacArthur's headquarters in Australia announced that all the forts had surrendered. General Wainwright stayed behind with his men. On May 9 Japanese warships entered Manila harbor for the first time. This marked the end of all centralized resistance in the Philippines, but scattered guerrilla fighting was subsequently reported at various points. Although the Japanese occupied the leading centers in the Philippines, they did not attempt to establish a thorough occupation of the many islands.

War in China.

After the fall of southeast Asia, there was considerable speculation about future Japanese moves. One possibility was a final effort to knock China out of the war. In many respects conditions were increasingly favorable to the Japanese, for the closing of the Burma Road early in 1942 had contributed to a further deterioration of Chinese economic conditions, in addition to depriving the Chinese army of important foreign supplies and delivering a severe blow to Chinese morale. Yet, Japan made no effort to end the war of attrition that, by the end of 1942, was five and a half years old. Action was chiefly sporadic, and, as the year wore on, the Japanese were understood to be reducing their forces in China to something over half a million men, as compared with perhaps one million in the earlier phases of the war. There were, however, a few important developments. In the first week of January the third Japanese drive toward Changsha — capital of Hunan province and an important economic center — was broken with heavy losses for the invaders.

Early in May, when Japanese forces in Burma crossed the frontier into Yunnan province, they established themselves west of the Salween river. In mid-May a two-pronged attack was launched in the eastern provinces of Chekiang and Kiangsi, with one Japanese force pushing westward from Hangchow in Chekiang and another eastward from Nanchang in Kiangsi. Although the immediate object was to establish full control over the Chekiang-Kiangsi railway, part of which was still in Chinese hands, there was some fear that this might be the beginning of an all-out drive against China. The campaign was actually a limited one, probably intended to immobilize air bases that could be used for raids on Japan and to weaken China by further disrupting its economy. For two months the Japanese advanced, seizing the airfields and the entire railway as well as the Chekiang provincial capital at Kinhwa. Shortly after mid-July they began to retreat, and within a few weeks the Chinese were back in most of the towns and villages, except for Kinhwa itself. The nature of the withdrawal suggested that it had been voluntary, since the Chinese forces lacked the power to drive the Japanese out in such short order. Before leaving, the invaders thoroughly looted the area, killing large numbers of civilians and causing widespread damage.

Some Broken Offensives.

Any major concentration against China was, in fact, unlikely, since Japan had long ago decided that China could be dealt with only if the power of its allies was destroyed. Drives toward India, Australia, or Hawaii were greater possibilities, since any of these would directly weaken the positions of Britain and the United States. Against India no action was taken, despite Japanese radio propaganda beamed to that country and the bombing of some Indian cities early in April and of Calcutta in December. Tokyo's intentions toward Australia were more definite. First attacks on the Australian mainland occurred on Feb. 19, when Port Darwin was raided twice. In April the Japanese concentrated warships and transports at Lae and Salamaua on the northeast coast of New Guinea and at Rabaul on New Britain.

Battle of the Coral Sea.

Early in May two coordinated naval groups were sent south — one to Tulagi, the best harbor in the southern Solomons, and the other into the Louisiade Archipelago off the eastern end of New Guinea. On May 4 American carrier-based planes sank or damaged a number of Japanese vessels at Tulagi, crippling that wing of the offensive — an action carried through by a task force consisting of the carriers Lexington and Yorktown, and a number of cruisers and destroyers. The American vessels then moved into the Coral Sea, northeast of Australia, to deal with the second Japanese group. On May 6 planes from the Lexington sank a Japanese carrier, thought to be the new Ryukaku, and on the following day two more Japanese carriers were badly damaged. The American Yorktown was damaged only slightly, but the Lexington, which suffered internal explosions some time after being hit by bombs and torpedoes, had to be abandoned and sunk. This ended the Battle of the Coral Sea — a defensive struggle of the United Nations that resulted in a severe setback for the Japanese.

Battle of Midway.

Whether the Japanese were attempting to cut American supply lines to the Far East via the south Pacific islands, or to initiate an invasion of Australia, or to divert American forces before delivering a blow elsewhere, a second sea offensive was not long delayed. Indeed, the United States had for some time known that Japan was assembling a large naval force in the central Pacific. The Yorktown therefore hurried to Pearl Harbor, where it was quickly put in shape before moving westward to Midway island, to join other American vessels. On June 3 an American pilot sighted the Japanese fleet, and for three days the planes of both sides attacked each other as well as enemy carriers. Although the Japanese at one point raided Midway from the air, they could not approach near enough by sea to carry through a naval shelling or to attempt a landing. In the course of the struggle, American planes sank four Japanese carriers, the Kaga, Akagi, Soryu and Hiryu, as well as the cruiser Mikuma. The United States lost the carrier, Yorktown, and the destroyer, Hammann. This second defensive victory — following so quickly after that in the Coral Sea — greatly improved the position of the United States in the Pacific, although by no means destroying Japan's offensive power.

Alaska and the Aleutians.

Although greatly removed in space, another Japanese attack far to the north was an integral part of the Battle of Midway. On June 3 two air raids were carried out against the American naval base at Dutch Harbor, Alaska. Later it became known that the Japanese had established themselves on the islands of Kiska, Attu and Agattu in the outer Aleutians. Had the Midway action succeeded and led to Japanese seizure of Hawaii, the Aleutian operations might have expanded into an invasion of Alaska and even the American Pacific coast. After the defeat at Midway, however, Japan's hold in the Aleutians was of minor significance. Yet, despite difficult weather conditions, American planes launched many attacks against the occupied island while American submarines operated against ships used to supply the enemy forces. At the end of August, United States troops landed in the Andreanof Islands, part of the Aleutian chain, and established bases from which fighter craft as well as bombers could raid Kiska, Attu, and Agattu. The Japanese evacuated the latter two islands at about this time, but later returned to Attu. Their position was very difficult, a fact that was underlined on December 27 when Premier Tojo declared that 'the privations and difficulties which Japanese troops have had to endure in the Aleutian Islands are unimaginable.'

Consolidating Conquered Areas.

Global strategy required that the United Nations concentrate the bulk of their military power against Germany, the heart of the Axis, while building up their strength in the Far East and waging the limited offensive actions necessary to prevent Japan from consolidating its new imperial positions. From Japan's point of view this was a crucial period in which it would have to make every effort to exploit the resources of Southeast Asia more rapidly than existing resources had to be used up. If successful in rebuilding its economy to make full use of the recently-won raw materials and manpower, Japan would be in an excellent position to meet a major Allied counteroffensive at a later date.

Early in the year there was a tendency in Allied circles to stress the effectiveness of a 'scorched earth' policy in limiting Japan's gains. It soon became clear that, despite the damaging of some productive facilities by retreating British, Dutch, or American forces, the tactics of destruction were being applied only in haphazard and restricted fashion. Most of the sources of wealth — including the rubber trees of Malaya and the Indies — remained untouched. Wrecked oil wells could be restored to production, even though many months might be required. Toward the end of the year, for example, Allied planes from India attacked Japanese oil refining facilities in Burma at Yenangyaung, the scorching of which had been reported the previous spring. This simply bore out Soviet and Chinese experience that initial destruction must be accompanied by the continuing activity of guerrilla fighters, in order to be genuinely effective. There was little guerrilla resistance, however, among the unprepared, colonial peoples of Southeast Asia, except in the Philippines. There Japanese broadcasts admitted that American and Filipino troops were waging small-scale, hit-and-run warfare on a number of islands.

Japan's Course in the Philippines.

Few details were available concerning Japan's exploitation of the newly occupied areas, but the example of the Philippines was probably typical. There the Japanese used worthless military currency to empty shops and warehouses of their goods and encouraged the production of rice and cotton instead of sugar and other former export commodities. A system of forced savings was instituted, and an effort was made in certain areas to organize a network of 'neighborhood associations,' composed of units of 10 to 15 families, each group being collectively responsible for illegal acts committed by any member. At the same time an intensive propaganda campaign was launched to win over the people of the islands.

A Ministry of Greater East Asiatic Affairs Established.

The new problems of economic and political organization were enormous, especially since the various southern colonies had undergone different types of economic development and were at different political levels. To meet the crucial situation, a Ministry of Greater East Asiatic Affairs was established on Nov. 1 under Kazuo Aoki. The new Minister was to control all political, economic, and 'cultural' activities in occupied Asia, except for areas directly ruled by the armed forces. His functions in this vast region included: control of foreign trade, development of natural resources, supervision of economic enterprises, and training of personnel, in addition to all matters previously under the Kwantung Bureau in Manchuria or the South Seas Board of the Foreign Office.

Deficiencies in Japanese Economy.

The primary difficulties of exploitation did not arise from any lack of available raw materials in Southeast Asia, but from two dangerous deficiencies in Japanese economy: (1) a shortage of shipping to carry vital commodities to Japan over long sea routes, and (2) a shortage of industrial facilities for processing purposes. Japan had begun the war with no great surplus of cargo vessels and during 1942 suffered considerable losses in merchant tonnage. On Dec. 8 American Secretary of the Navy Knox declared that the United States had destroyed between 1,000,000 and 1,500,000 tons of such shipping, perhaps one-fourth of Japan's entire pre-war merchant fleet. This was, of course, offset somewhat by the seizure of United Nations vessels and shipbuilding facilities in the southward campaign as well as by Japan's domestic construction, but the situation was undoubtedly serious. The new areas, moreover, contained no significant modern industries, and Japan, unlike Germany, therefore, could not use conquered factory facilities to process conquered raw materials. Japan's own productive capacity, however, was low in comparison with that of other major powers and did not permit full utilization of available colonial manpower and natural resources.

Allied Counteroffensive in the Solomons.

All the Allied victories in the Pacific war — whether at Changsha, in the Coral Sea, or at Midway — had been defensive successes. On Aug. 7, in a first genuine offensive action, United States Marines effected surprise landings in the southern Solomons Islands, seizing Tulagi, Gavutu, and Tanombogo as well as a beachhead on Guadalcanal containing an airfield that had been almost completed by the Japanese. This move was probably hastened by the need of countering advances made elsewhere by the enemy. In late July Japanese forces had occupied Gona and Buna on the northeast coast of New Guinea and then pushed overland toward Port Moresby, a vital Allied position on the southern coast. Although the high Owen Stanley mountains lay in between and would have to be crossed, there was no reason to think that geography alone would stall the invaders. At the same time Japan's efforts to speed the completion of the Guadalcanal airfield pointed to plans for attacking Allied supply routes and positions in the southwest Pacific.

The drive into the southern Solomons was conceived of as a limited offensive by Allied strategists, but Japan regarded the campaign as a major challenge and made of the area an important naval battleground. On the night of Aug. 8-9 Japanese warships swept through the channel between Guadalcanal and Savo Island to the north in a night surprise attack and sank the American heavy cruisers, Astoria, Quincy, and Vincennes, together with the Australian cruiser, Canberra. This blow, in combination with subsequent Japanese air raids and surface shellings against the Guadalcanal beachhead, as well as submarine attacks on shipping made the supplying of the marines a very difficult problem for some time. The Japanese soon adopted a policy of trying to exhaust the Americans, while strengthening their own troops located west of the Guadalcanal airfield. Night after night small Japanese reinforcements were landed, and during the day there was constant air activity against American positions. On Aug. 24 a small Japanese aircraft carrier, the Ryuzo, was damaged or possibly sunk. On Sept. 15 Japanese submarines sank the 14,700-ton American carrier, Wasp. The marines withstood a severe Japanese assault against their lines in September and even stronger attacks in October. On Oct. 11-12 a United States task force sank one heavy Japanese cruiser, four destroyers, and a transport at a cost of one American destroyer and minor to moderate damage to other ships. In the last week of the month two Japanese carriers, two battleships, and three cruisers were damaged, while an American destroyer, the Porter, and an unnamed carrier were sunk. After this battle Secretary of the Navy Knox declared that the American forces had come through the 'first round' in the Solomons, but warned that the Japanese would return.

Japan's most serious bid for reconquest of Guadalcanal came in November, but the American marines, who had been joined by Army men, were spared the problem of dealing with actual landings. In a great naval battle of Nov. 13-15, with carriers taking no part, Japan lost one battleship, a heavy cruiser or second battleship, eight cruisers, six destroyers, eight troop transports, four cargo vessels and from twenty to forty thousand men who went down. Following these blows to the enemy, Secretary Knox said on Nov. 20: 'I think it is fair to say our hold on the island is very secure.' Although it was possible that further Japanese attacks would be launched against Guadalcanal, Japan had clearly suffered heavy naval losses — but at a cost to the American fleet. In addition, hundreds of Japanese planes had been destroyed, far exceeding the American air losses. The Solomons campaign, which had developed from a limited offensive into a slugging match, considerably altered the balance of forces in the Pacific.

Allied Campaign in New Guinea.

Late in August the Japanese attempted to seize Milne Bay, an important site at the eastern tip of New Guinea. Had this move been successful, they would have been in an excellent position to attack Port Moresby by sea, land and air, while continuing to move overland through the mountainous interior of the island. Allied military leaders had, however, foreseen the Milne Bay drive, and the invading Japanese were soon wiped out. Yet, defying geographical and climatic difficulties, the enemy infiltrated Allied lines in the Owen Stanley range, crossed through the gap at the highest point, and drove to within 32 miles of Port Moresby. In late September the tide suddenly turned, and they began to withdraw. One reason lay in constant United Nations air attacks against the tenuous Japanese supply lines. Japanese setbacks in the Solomons and the landing of American troops by plane far in the Japanese rear may also have had effect. In November, Australian forces, that had fought their way across the mountains from Port Moresby, reached the Gona-Buna area, where they pressed the Japanese back toward the sea. It was now announced that General MacArthur was leading the Allied troops in the field. Soon afterward the Americans entered the battle. Before the end of the year Gona had been captured, and the Buna beachhead was being reduced steadily in hard fighting.

American Raid on Tokyo and Other Allied Blows.

One of the most striking developments of the year was the American raid of April 18 on Tokyo, Yokohama, Kobe and Nagoya. All reports indicated that this exploit of American bombers under the command of Brigadier General — later Major General — James H. Doolittle caused great confusion in Japan. The attack was, however, an isolated incident occurring at a time when Allied fortunes in the Far East were at low ebb. By the end of the year it was evident that the air power available against Japan was expanding very rapidly. This was indicated by the considerable increase in recent types of American planes on the Southwest Pacific island front in particular. Yet, Japan clearly retained great offensive power, for action in the Solomons and New Guinea — on the very fringe of the conquered area — could not be decisive. If Japan was to be weakened in fundamental fashion, major land fighting, involving large armies would be necessary. A demand therefore arose for the reinvasion of Burma, in order to open the Burma Road anew and make possible the dispatch of more supplies to the existing land front in China. On Dec. 19 it was announced that British forces had crossed from India into Burma, but warnings were soon issued that only a section of General Wavell's forces was involved and that too much should not be expected from the action. The invaded area — a coastal strip leading to the port of Akyab — was geographically isolated from the rest of Burma, making other, more important drives necessary for the reconquest of the country.

Internal Affairs.

The Tokyo government apparently did not underestimate the difficulties that it had brought upon itself by initiating the war. On April 27 Premier Tojo declared that the coming stage of the struggle would be 'a real test of the Japanese nation,' in which the people must be 'fully prepared to cope with any attack on Japan itself.' Late in September, on the eve of the second anniversary of the Tripartite Pact with Germany and Italy, he stated that 'British and American plans for a counteroffensive are beginning to take more definite form. The real developments of the war will be seen in the future.' Especially toward the end of the year Japanese spokesmen sought to arouse the country to the problems that lay ahead. More and more frequently shipping difficulties were alluded to, and the admission was made that the conquest of Southeast Asia could not be expected to relieve shortages of civilian goods at home.

On April 30 a general election for the Japanese Diet took place, and on May 2 the Premier announced a sweeping victory for 'government-recommended' candidates, who carried over 80 per cent of the seats. In view of a complete lack of information about the campaign, it was impossible to say what significance should be attached to the fact that almost 20 per cent of the seats went to other nominees. Toward the end of May the Diet convened to approve an extensive government shipbuilding program. On Sept. 1 the Foreign Minister, Shigenori Togo, resigned, and the Premier assumed his post temporarily. At the same time plans were announced for a Ministry of Greater East Asiatic Affairs. These Cabinet changes involved a considerable reduction in the powers of the Foreign Office and seemed to indicate a strengthening of the Premier's position. Later in the month Masayuki Tani was appointed Foreign Minister. In December the Diet convened again, and the Premier issued a warning that the United Nations were preparing counterblows of 'great importance.'

Foreign Affairs.

Relations with the Soviet Union.

Relations with the Soviet Union constituted one of the most important aspects of Japanese foreign policy. Throughout the year peace was maintained, since Japan did not find conditions favorable for an attack, while it was to the interest of both the U.S.S.R. and the United Nations that Soviet strength should be concentrated against Germany. Early in 1942 the Soviet-Japanese fisheries agreement was renewed for another twelve months, but the rents to be paid by the Japanese were raised and the number of fishing lots was reduced. On the anniversary of the conclusion of the Soviet-Japanese Neutrality Pact of April, 1941, the Soviet newspaper Pravda warned Japan of the dangers of 'an annexationist war in the north.' Later a new Soviet Ambassador to Tokyo was named. During the summer there were many rumors of an impending Japanese drive against Siberia, speculation which reached its height with the shake-up in the Japanese Cabinet, since the retiring Foreign Minister had been connected with the conclusion of the Neutrality Pact and had formerly been an Ambassador to Moscow. At the end of the year, however, relations remained formally correct.

Treatment of Prisoners.

Considerable discussion was aroused in the United States and Britain by Japan's treatment of civilian and military prisoners. On March 10 Anthony Eden, British Foreign Secretary, told the House of Commons that escaped eyewitnesses had confirmed previous accounts of Japanese atrocities. Early in May he stated that conditions in the Hong Kong and Shanghai prisoners' camps were understood to have improved somewhat. In August two boatloads of westerners, chiefly Americans, arrived in the United States under a Japanese-American exchange agreement. Although there were some exceptions, these missionaries, business men, newspaper correspondents and teachers by-and-large reported that they had been treated badly or even subjected to brutality. Perhaps the greatest difficulty was that the foreigners confined in Japan had been obliged to get along on a meager Japanese diet. One American missionary in Korea was given the 'water cure' and beaten with a rubber hose. The publisher of an anti-Japanese weekly in Shanghai contracted beri beri and gangrene because of the conditions under which he was imprisoned and lost part of both feet as a result. In general, these reports increased America's determination to administer a thorough and crushing defeat to Japan.

1941: Japan

Throughout 1941 Japan's unflagging determination to establish a 'Greater East Asia' threatened to draw the whole of the Pacific area directly into the orbit of the European war. Far Eastern politics was dominated by one primary question: Would Japan's continued program of aggressive territorial expansion, buttressed since Sept. 27, 1940, by military alliance with the Axis powers, lead to a merging of the wars in Europe and Asia? The answer was given on Dec. 7 at Pearl Harbor.

FOREIGN RELATIONS

Early War Scare.

1940: Japan

The year 1940 was destined to be one of the most momentous in Japan's history. Both at home and abroad the country faced difficulties of unprecedented dimensions. The war in China had reached a stalemate, and victory was acknowledged to be still far distant. The economic strain on the country resulting from two and one-half years of inconclusive fighting became increasingly severe. Relations with some of the great western Powers grew more and more strained and, in the case of the United States, came dangerously near the breaking point. The year also saw a definite swing to a totalitarian form of government, and an outright alliance with the European Axis Powers.

At the very beginning of the year the people were warned by the Government that difficult times were ahead, and that the contemplated launching of a Japanese-sponsored 'Central Government of China' at Nanking would mean further sacrifices on their part, although not necessarily the end of the China 'incident.' They were therefore cautioned against any feeling of 'relaxation.'

JAPAN AT WAR: 1940

In China.

Late in January, a strong Japanese drive along the railway north of Canton met with severe reverses. Early in February, the Japanese made an unsuccessful attempt to extend the area of occupation around Nanning, capital of Kwangsi Province and vital communications center which they had captured in November 1939. In the numerous engagements between the two armies, both sides suffered heavy casualties, but the efforts of the Japanese were completely unsuccessful. Regardless of this defeat, however, the Japanese Army Command issued a proclamation on Feb. 14 calling on Chiang Kai-shek to surrender and warning him that his resistance was 'useless.' The proclamation said that the Japanese army had 'won sufficient areas in China for establishment of a 'new order' in Asia, that rapid progress was being made for the formation of a 'Central Government' under Wang Ching-wei'; and that, 'In the future we will not extend our operations but will await your offensive.'

Shortly after the middle of April, following a settlement by China of her United Front difficulties in Shansi, Japan started her eleventh major drive in the southern area of this province. By April 25, twenty-five Japanese columns, totaling 60,000 men were pushing their way toward southwestern Shansi and the Yellow River. Within ten days, however, the Chinese had partially severed the Japanese lines of communication and once more the Japanese attempt to cross the Yellow River failed. Early in May, an even more powerful Japanese offensive was launched toward the Upper Han River Valley of Hupeh Province, in an attempt to split the northern provinces from the southwest. Although impressive advances were made at first, the offensive met with increasing resistance, and was finally disastrously defeated.

The first days of June saw the beginning of a strong drive by the Japanese in southern Hupeh Province to gain control of the highly strategic port cities of Ichang and Shasi on the Yangtze River above Hankow. By June 4, the Japanese had crossed the Han River at three points near Ichang and had pushed to within a few miles of the walled city of Tangyang, forty-three miles northeast of Ichang. After two days of heavy fighting, in spite of stout Chinese resistance, Tangyang was captured. Shasi was taken the same day, and on June 11, Ichang, 60 miles to the northwest, fell into Japanese hands. There has been much severe fighting in this general region since June, but at the end of the year, the Chinese had not retaken Ichang.

As the China 'incident' went into its fourth year on July 7, victory was still not in sight, and a report issued by the Bureau of Information of the War Department early in the summer, stated that the 'will to fight' on the part of the rank and file of the Chinese and 'the spirit of anti-Japanism have not died out or cooled down.' The report went on to say that while the Japanese had smashed Chiang Kai-shek's winter campaign, his offensive had nevertheless, 'extended practically the entire length of China and strategically the Chinese operations showed a unity of plan and good control.' The report also stated that the Chinese had rebuilt their munitions industry in the Interior and so had kept the guerilla forces well equipped. It closed with the statement that there was not much chance of an immediate change in the situation.

1939: Japan

Cabinet Changes.

The Cabinet crisis, which had been brewing in the latter months of 1938, came to a head on Jan. 4, 1939, when Prince Konoye, who had been Premier for the duration of the war in China up to that time, resigned, declaring that he did so to clear the way for new policies in China and the 'new order' in Asia. The intensely nationalistic group which had brought about his downfall was pressing for invocation of all the provisions of the National Mobilization Act, which aimed at sweeping control of private industry, as well as of social and economic life. There had been much opposition to the bill and Parliament had passed it after assurance by the Premier that only certain sections of the Act, dealing mainly with mobilization and making men available for the draft, would be invoked during the war in China. Prince Konoye, who remained in the Cabinet as Minister without Portfolio, was succeeded by Baron Hiranuma, a man of definitely Fascist leanings, and in high favor with the Army. One important change in the Cabinet was the appointment of General Itegaki, Chief of Staff of the Japanese Army in the conquest of Manchuria, as Minister of War. Two other generals were appointed to the Cabinet: General Ugaki, as Foreign Minister, and General Sadao Araki, as Minister of Education.

Closing of 'Open Door' Protested.

During the first two weeks in January the Government was much perturbed by notes from Great Britain and the United States, in answer to the Japanese note of Nov. 19, 1938, which had demanded recognition of the 'new order' in East Asia and announced what practically amounted to the closing of the 'Open Door' in China. The American note, sent on Dec. 31, insisted that Japan must not impair American rights in China, and declared, among other things, that the American Government 'is well aware that the situation had changed' and that 'many of the changes have been brought about by the action of Japan.' The British note, handed to the Government on Jan. 4, 1939, took substantially the same stand. Both notes rejected the 'new order' in Asia based on abrogation of the Nine Power Treaty and pointed out that there was a legal and orderly way of revising treaties which, it was maintained, could be changed only by conference between the parties concerned and not by unilateral action. The official Japanese reaction to these notes was that there could be no change in Japan's fundamental policy. The Government also took the stand that it would not consent to an international conference to discuss the 'Open Door' and equal opportunity in China, but would consider direct negotiations with the powers concerned, provided that certain matters vital to Japan's interests would be considered and adjudicated.

At the opening of the Diet on Jan. 21, Baron Hiranuma stated that East Asia was to be built up through the cooperation of Japan, Manchukuo and China 'through full mutual understanding and in relations of helpfulness, neighborly amity and solidarity.' He closed his speech with a reaffirmation that the China affair would not end until Japan had obtained her objectives.

In the Diet, on Jan. 30 the new War Minister, warning that the war in China would be 'long and hard,' announced that plans had been made to maintain military forces in China indefinitely.

The Diet also considered at this session the matter of closer cooperation with Germany and Italy in the anti-Comintern alliance. Plans for outright military cooperation, which had been suggested earlier in the month, were temporarily shelved.

Seizure of Hainan; Disorders in Shanghai.

Despite a previous warning from both the French and British that any attempt to occupy the Island of Hainan would lead to undesirable consequences, the Japanese on Feb. 9, pleading military necessity, seized this island. Hainan lies directly athwart the line between Singapore and Hong Kong, not far from the French naval base at Cam Ranh in French Indo-China. The Japanese had bombed the island in September 1938, and following protests from the French Government declared it would be secure from further attack provided France would allow no military supplies destined for China to move through Indo-China. The French agreed. The occupation of Hainan opens the way for a direct thrust at Indo-China itself, and for this reason has been a source of anxiety to the French Government.

Late in February, Japan was considering means to check what was termed 'anti-Japanese terrorism' in Shanghai, where within the space of fifteen months, fifty-three political assassinations had occurred. The Municipal Council of Shanghai's International Settlement was accused of being arrogant and of failing to cooperate with Japan in maintaining peace and order. On Feb. 22, the Japanese Government instructed its Consul General in Shanghai to present a virtual ultimatum to the Council demanding that anti-Japanese activities be stopped forthwith. On Feb. 23, the Premier in answer to a question from the floor during a Parliamentary session, as to what the Government intended to do, replied that Japan would be compelled to take 'strong measures' if the Council or the Settlement was not sincere in its cooperation. The tension in the Settlement, from whatever cause, was dangerous, and both Great Britain and the United States on March 4th filed protests with both the Chungking Government and Japan calling attention to the seriousness of the situation. (See also SHANGHAI.)

Naval Expansion and Currency Regulations.

On March 6, the Government announced a six-year naval replenishment and expansion plan to cost¥ 693,000,000. Admiral Yonai in explaining the plan to the Budget Committee reaffirmed Japan's demand for naval parity, and stated: first, that Japan's navy must be equal to that of the strongest naval power; second, that the new British four-year plan and the new American naval program had been taken into account; third, that the navy must have sufficient power to deal with any international friction arising over the construction of the 'new order' in East Asia; and fourth, that in the event of other powers' further increasing their naval strength, Japan's own plans would be revised.

Following announcement of the naval expansion program, the president of the Planning Board gave notification of a three-year plan for a 'major transformation of Japan's economic and defensive power.' It was proposed, he said, to make China, Japan and Manchukuo self-sustaining in iron, steel, coal, light metals, soda, sulphates, ammonium, automobiles and railway rolling stock.

In North China the Japanese authorities announced new currency regulations. The Japanese yen was to supplant the Chinese dollar, which was declared valueless. Both Great Britain and the United States refused to support this program, and shortly afterwards Great Britain made a loan of £5,000,000 to the Chungking Government to bolster the Chinese dollar — an act which caused bitter resentment in Japan.

Military Campaigns in China.

During March, operations against guerrilla forces which had begun earlier in the year were continued in the five northern provinces of Suiyuan, Chahar, Hopeh, Shantung and Shansi. The fighting continued through the spring, and then in June a big offensive was launched against the guerrillas in southeastern Shansi in a desperate attempt to get control of this key province, which blocks the main route to Sian in Shensi Province. The Chinese Eighth Route Army engaged the Japanese forces all through June, July and August. Finally on Aug. 25, with the capture by the Chinese of the city of Tsincheng, the offensive was definitely stalled. Shansi is still in Chinese hands. Crushing the guerrillas would accomplish several very important things for Japan: first, it would bring large areas of North China completely under Japanese control and would mean that the products of this section could be used by Japanese factories and industrial plants; second, it would furnish an outlet for the finished products of Japan's factories; and third, Japanese garrisons in North China could be put on a peace-time basis, thus greatly reducing the cost of maintaining large forces on active duty.

In addition to the campaigns against the guerrillas, during the early months of the year Japan started several fairly large offensives in China. The earliest began in February on the central front, north and south of the Yangtze River. South of the river, Japanese forces won an important victory on March 27 in the capture of the city of Nanchang, capital of Kiangsi Province, and appeared to be rapidly moving on to take the important city of Changsha. A strong Chinese counter-offensive in April, however, decisively checked this drive. Meanwhile in the same month Japanese forces were moving northwest from Hankow, up the Han River Valley towards the city of Ichang, International Treaty Port on the Yangtze River, in a desperate effort to cut off the North China Provinces from Chungking and the central front. The struggle became deadlocked late in the month when the Chinese stopped the invaders at the Han River. At the end of May Japanese forces had carried their advance well into northwest Hupeh where, owing to stiff resistance by the Chinese, the advance was turned into a rout. (See CHINA.)

Annexation of the Spratly Islands.

The Sino-Japanese war and its probable effects on European colonial possessions was brought sharply to the fore on March 31, when Japan annexed the Spratly Islands, a small group of coral reefs between British Borneo and French Indo-China. This group of islands had been formally annexed by France in 1933 — a fact of which the Japanese were reminded on July 3, 1938, when France took over the Paracel Islands off the coast of Indo-China, and south of Hainan. While these islands, as has been pointed out by many observers, could have no commercial value, they are ideal for submarine bases, for airports and for the storage of oil and other supplies. French protests over the seizure of the Spratly Islands were rejected by Japan on the ground that France had never undertaken the effective occupation required by international law, and that, furthermore, the islands were utilized by Japanese and not by French nationals. Occupation of these islands puts Japan within bombing distance of Singapore, which is 640 miles away. (See also FASCISM.)

Air Services.

Simultaneously with the announcement of the annexation of the Spratly Islands came the statement that Japan was inaugurating commercial air services between Yokohama and the island of Saipan, which is 52 miles north of Guam, United States naval station. At the end of the year, in December, a new air service between Tokyo and Bangkok was inaugurated. This was done, it was understood, to strengthen Siamese-Japanese relations.

Shanghai International Settlement Problems.

Japan's desire to take over control of Shanghai's International Settlement, which was claimed to be a breeding ground for anti-Japanese activities, appeared again on May 2, when in a joint statement issued by the Army and Navy authorities in Shanghai, warning was given that unless conditions improved, Japan would be compelled 'to take strong measures.' The 'warning' contained the following demands: (1) abolition of terrorism; (2) closing of all agencies of the Chungking Government in the Settlement and Foreign Concessions; (3) suppression of anti-Japanese publications; (4) suppression of organized anti-Japanese movements; (5) prohibition of the display of Chinese national flags; (6) surrender of the Chinese courts to the authority of the new Shanghai Administration courts (set up by Japan); and (7) surrender by the Settlement authorities of the Land Office records for the whole of the Shanghai area, which had been deposited with the Municipal Council for safekeeping.

On May 3, negotiations were begun between Japan's Foreign Minister and the British and American Ambassadors regarding the suggested changes in reorganization as set forth in a memorandum by the Foreign Minister. The views of the two Ambassadors were submitted in separate memoranda. On May 17, following tension between Japan and the powers in Kulangsu, International Settlement in Amoy, the American Ambassador delivered to the Tokyo Foreign Office, at the direction of the United States Department of State, an aide-memoire, flatly rejecting the Japanese proposals for reorganization set forth in the May 3 memorandum.

On May 19, as a warning to Japan that she must keep hands off the International Settlement of Shanghai, the governing body of that area joined with the French Concession in a display of armed force. In both areas, all available man power was mobilized, the French forces including French Annamite soldiers, French and special Chinese police from the French Concession, and a number of French sailors who had been landed from warships in the Whangpoo River. (Later on Sept. 14, the question of the defense of the Shanghai International Settlement was brought up for consideration by Japan when she called together the United States, British and Italian defense commanders in Shanghai to consider a proposed plan of defense 'in view of the complete change of defense conditions.' To date, however, no changes have been made and the status of the Settlement remains the same.)

Amoy International Settlement Problems.

The tension which had arisen on May 10 in the International Settlement in Amoy came as a result of the landing of Japanese marines in the Settlement and the issue of a warning that Japan intended to take over control of that area. On May 17, France, Great Britain and the United States, replied to this threat by landing their naval forces in the International Settlement. On May 22, the flagship of the Japanese Commander-in-Chief arrived in Amoy in order to negotiate with the foreign powers involved, and contended that there was no need for the landing of foreign forces since Japan, in landing her marines there, did so only for the purpose of protecting her own nationals. The foreign warships, however, did not leave.

(The dispute over the International Settlement at Amoy was settled finally on Oct. 18, and the American and Japanese naval forces withdrew simultaneously from the Island (the British and French units had withdrawn immediately following the outbreak of the European war). The far-reaching demands of the Japanese were not granted, although the agreement reached called for immediate cooperation between the Municipal Council and the Japanese Consul General for the suppression of anti-Japanese activities in the Settlement. The agreement also included the appointment of a Japanese police inspector and a Japanese police sergeant to the local police force.)

Attacks on Chungking and Sian.

Meanwhile the French, British and American Ambassadors in Tokyo were protesting to Japan over the repeated bombings of Chungking during May and earlier, and the consequent destruction of clearly indicated foreign property in the Chinese Capital.

Ever since the outbreak of hostilities in July 1937. Japan had tried unsuccessfully to take the city of Sian in Shensi Province, strategic link with the motor highway through Sinkiang to Siberia. Another serious attempt was made in May, when Japan launched an offensive northwest from Hankow aimed at this vitally important city. The offensive failed, however, decisive defeat being inflicted on Japan's troops by Chinese regulars under the command of General Li Tsung-jen.

Blockade of Foreign Concessions in Tientsin.

In June strained relations which had developed between Japan and Great Britain in North China, owing principally to Britain's support of the Chinese dollar and failure to cooperate economically with Japan in that region, reached a serious crisis. Officials of the British Concession refused to deliver to Japanese authorities four Chinese whom the Japanese accused of killing an official of the Tientsin Provisional Government. The Japanese thereupon declared that it was necessary to isolate the Concessions, which had become 'a nest of intrigue and plots,' and on June 14, they proceeded to blockade the British and French Concessions. Japanese soldiers were stationed around the Concessions and were ordered to search all persons entering or leaving the foreign zones. Automobile traffic was ordered stopped over the international bridge leading from the French Concession to the main railway station, and at the station itself. All vessels arriving at Tientsin were ordered to anchor at the Japanese wharf below the Concessions. Then, charged wire, carrying 1,000 volts of electricity, was strung around the Concessions so as to prevent the smuggling of food for the British and French residents. The blockade entirely cut off British trading and seriously curtailed the food supply. Frequent instances of striking, searching, and in some cases even stripping of British men and women Occurred.

The indignation in England over these happenings was bitter. British protests to the Tokyo Government over what Mr. Chamberlain termed 'intolerable insults,' brought a reply that the affair must be settled locally, by the Japanese military authorities in charge However, Japan later agreed that negotiations for settlement of the issues involved would be transferred Tokyo, and late in June, the British Ambassador started conversations with Japan's Foreign Minister. The British request that the blockade be lifted pending the outcome of negotiations was bluntly refused.

Fall of Swatow.

In June, after a day of aerial and naval bombardment, Japanese forces occupied the city of Swatow, one of the last seaports on the South China coast remaining in Chinese hands. The Japanese were jubilant over the fall of this city of 178,000 as they claimed it was a blow to China's economic life. Immediately following the occupation of Swatow, the Japanese naval commander ordered all foreign warships to leave the harbor and all foreign residents to evacuate the city. This the British and American warships refused to do. In the American note to the Japanese authorities at Shanghai refusing to comply with this order, it was stated that Japan would be responsible for any loss of American lives or property at Swatow, and that further American ships were within their rights in entering or leaving the port. The British also sent a note of the same effect. Both Governments thereupon doubled their naval forces in the vicinity of Swatow. Several days later, Japan warned foreign powers to stay away from the ports of Foochow and Wenchow, in South China, as they intended closing these ports. Both the British and French refused to comply, but as no American vessels were at these ports, and American interests in the two cities were not large, the American Government made no protest.

Japanese-British Agreement Concerning Japanese Army in China.

In July blockade of the British and French Concessions in Tientsin continued, and foreign residents faced a serious food shortage. The searchings and strippings continued, Britons in particular being singled out.

On July 14, as conversations were starting in Tokyo between the British Ambassador and Japan's Foreign Minister, the British Embassy in Tokyo was attacked by 50,000 angry Japanese, who tried to rush the gates and were held back by a triple cordon of police. This demonstration was staged to impress upon the English the resentment Japan felt over British aid to China. Among the demands presented to Britain at the conference were the following: (1) immediate surrender of the four Chinese accused of murder; (2) collaboration in the North China currency policy of Japan; (3) transfer of the Chinese Government's silver reserves in Tientsin banks to the Japanese-sponsored régime at Peiping; (4) control of Chinese banks in the British Concession; (5) suppression of anti-Japanese activities; (6) abandonment of Britain's pro-Chiang Kai-shek policy.

The talks between the two Governments dragged on, with Mr. Chamberlain warning Japan that Britain would refuse to collaborate with her in the establishment of the proposed 'new order' in Asia as the price of an agreement by Tokyo to discontinue the blockade at Tientsin. Finally on July 24, Prime Minister Chamberlain announced in the House of Commons that a formula had been agreed upon by both Governments under which Britain would recognize the 'special requirements' of the Japanese Army in China, and that a certain amount of cooperation with that army had been agreed upon. The formula, admitted by the British to be ambiguous, should not be interpreted, Mr. Chamberlain stated, as meaning that there would be an extension of belligerent rights to Japan by Britain, and in response to a question from Mr. Arthur Henderson, Labor member of Parliament, as to whether it was not a de facto recognition of Japanese sovereignty in the parts of China occupied by Japan, Mr. Chamberlain replied 'No, sir.' Mr. Chamberlain also stated that 'the declaration does not connote any change of British policy in China.'

To many observers it seemed that the Japanese-British agreement would prove to be a fertile source of further friction between the two countries. While the British and Japanese had not reached complete agreement over difficulties at Tientsin and elsewhere in China, Britain had agreed to surrender the four Chinese in the British Concession wanted by the Japanese authorities. The question of turning over the $400,000,000 Chinese currency in the banks in the Concession was, however, still unsettled. Meanwhile in Tokyo, Britain and all things British were being subjected to a widespread campaign of violent and bitter abuse over their 'unfriendliness' to Japan. Within twenty-four hours after the text of the agreement was published, the Japanese commander at Canton notified the Consular Authorities of all Western nations that the Canton River would be closed for two weeks.

On Aug. 6, two British Yangtze River steamers were destroyed by Japanese bombs dropped from planes attacking the city of Ichang. The Japanese refused to consider the protest of the British over this loss, however, claiming that they could not be held responsible.

United States Trade Treaty of 1911 Abrogated.

On July 26, the United States Government, as a reminder of its displeasure over Japan's actions in China against American life and property, notified the Japanese Government that it was abrogating its 1911 trade treaty with that country, the same to take effect six months from that date. The American Government, through its official representatives, had made repeated protests to Japan over the bombing of schools and hospitals, which had no military significance, over assaults on American citizens; and in general over interference with American business and rights in the occupied areas. The American note was signed by Secretary of State Hull, and said, in part: 'The Government of the United States has come to the conclusion that the Treaty of Commerce and Navigation between the United States and Japan . . . contains provisions which need new consideration. Toward preparing the way for such consideration, and with a view to better safeguarding and promoting American interests as new developments may require, the Government of the United States . . . gives notice hereby of its desire that this treaty be terminated, and, having given notice, will expect the treaty . . . to expire six months from this date.'

Japan, surprised and shocked at this unexpected development, said the action was 'unfriendly' and 'unbelievably abrupt.' The day following the American denunciation of the treaty, Japan initialed an agreement for revision and extension of its existing commercial treaty with Germany. It is to be noted, however, as a trained observer has pointed out, that for every dollar's worth of goods Japan sells to Germany she sells ten dollars' worth to the United States; and that her sales to the United States are, therefore, not only a highly important factor in her own economic life, but a determining one in her ability to finance her war in China. (See also UNITED STATES; WORLD PEACE.)

On July 27, a United States protest was handed to Japan over the blockade of the Canton River and the restrictions placed on entry into Shameen Island, on which both the British and French Concessions are located, and where the United States also has interests. Protests were also lodged by the United States on Aug. 2, over the mistreatment of American nationals by the Japanese military in China, particularly in Tientsin.

Cabinet on Changes of Foreign Policy; General Abe Premier.

On Aug. 20, it was announced that the Anglo-Japanese negotiations over the Tientsin blockade had been temporarily suspended owing to Britain's unwillingness to agree to some of the conditions set by Japan, the main one being refusal to turn over the Chinese money in Concession banks. The stiffening of the British attitude was believed to be due, in part at least, to recent action by the American Government in announcing abrogation of its trade treaty with Japan. On the same day, flood waters around Tientsin washed away Japan's barricades of the French and British Concessions, thus temporarily lifting the blockade which had lasted for nine weeks. (The barricade was later replaced, and Britons leaving the Concession were compelled to wait sometimes an hour or more before being allowed to pass.)

At a meeting of Japan's 'Inner Cabinet' in August there was full discussion as to Japan's European policy, the more radical of the Army leaders urging closer cooperation with Italy and Germany. However, no steps in that direction were decided upon, the consensus of opinion being that Japan must follow an independent policy in European matters. Resistance to the Axis was growing in spite of the vigorous demand by the Army for a closer alliance.

Surprise and deep resentment were expressed in Tokyo over the signing of the Russo-German Non-Aggression Pact on Aug. 23. On Aug. 25, the Japanese Ambassador in Berlin was instructed to file a protest against the new pact on the ground that it violated the spirit of the anti-Comintern Agreement. This action was taken on instructions from the Cabinet. (See also FASCISM.)

On Aug. 28, the Cabinet, headed by Premier Hiranuma, resigned in a body, and the Emperor commanded General Nobuyuki Abe to form a new Cabinet. General Abe is believed to be an impartial neutral between the Army faction that leaned towards Germany and the largely civilian group which would favor efforts to court the goodwill of the United States and Great Britain.

Early in September tense relations between Japanese and British in the British Concessions in China were eased somewhat, as resentment against Germany over the Russian alliance expressed itself in rough handling of Germans throughout China.

On Sept. 4, the new Cabinet issued a statement to the effect that 'in view of the European war that has just broken out, Japan does not intend to be involved in it; she will concentrate her efforts upon the settlement of the China affair.' This was followed shortly by a statement that if the other powers wished to withdraw their troops from China, Japan would be ready to protect their nationals and interests.

Early in October, a minor crisis in the Japanese Foreign Office, causing the resignation of more than one hundred officials, was settled in favor of the disgruntled rebels who had objected to having the Economic Section of the Foreign Office transferred to the Trade Ministry. The controversy, which lasted over a week, was settled on October 14.

Fighting between Japanese and Soviet Troops; Truce Declared.

On Sept. 12, a considerable shifting among commanding officers in the Japanese Army resulted in the naming of new supreme commanders for the forces in China and Manchukuo. The changes would coordinate military operations in China and make possible the launching of vigorous rehabilitation and reconstruction campaigns, it was believed. The new Commander-in-Chief of the Japanese forces in Manchukuo, Lieutenant-General Umezu, in a press interview immediately following his appointment, intimated that Japan was ready to begin negotiations with Russia for settlement of the long-drawn-out border disputes between the two countries. In general, his remarks emphasized the peaceful intentions of Japan towards Russia. He declared that Japan had never provoked the Soviet Union and had never initiated any moves against Russia in the border disputes, which, he said, 'have arisen from the absence of a definite boundary line.'

Serious tension between the two countries had developed owing to clashes of their troops on the Siberian-Manchukuoan border, and in Mongolia, as well as over fishing rights in the valuable Northern Kamchatka fishing grounds. On Jan. 31, a detachment of Japanese Manchukuoan troops had attempted to take 'Island 227' in the Argun River, which runs northeast of Manchuli, important border point where the Chinese Eastern Railway crosses from Siberia into Manchukuo. The Russians claimed that under a treaty signed with China on Nov 25, 1911, this island belonged to them. The Japanese refused to recognize this claim. Heavy fighting occurred in this section, and the Japanese were driven back. Following further border fighting, the Japanese Diet on Feb. 14, after fiery speeches in the Lower House, passed a resolution to take a firm stand against Soviet Russia.

The Government announced at the same time that it would fight to maintain its rights in the fishing grounds, which had been granted it by the Treaty of Portsmouth signed at the end of the Russo-Japanese War, in 1905. These fishing grounds are within Soviet territorial waters along both coasts of the Kamchatka Peninsula and other areas in the Bering and Okhotsk Seas. The fishing 'lots' are near shore and range in size from 100 feet to several miles. Attempts by Japan to secure a renewal of the one-year agreement covering fishing privileges, which ended on Dec. 31, 1938, were fruitless during the first three months of the year; and then on April 2, after serious trouble had seemed inevitable, Russian Foreign Commissar Maxim Litvinov and the Japanese Ambassador, Shigenori Togo, signed an agreement at Moscow regulating fishing rights for the remainder of 1939.

Shortly after the signing of the agreement, however, fighting again occurred on the Manchukuo-Siberian border, with losses on both sides. By May, Soviet and Japanese forces were fighting at both ends of the Manchukuoan frontier. On the western border, the Japanese claimed that Mongolian forces, urged on and protected by Russia, had attacked them.

The fighting in Outer Mongolia (see MONGOLIA) had reached serious proportions in July. Heavy reinforcements of Japanese soldiers were sent there, and it was estimated that Japan had 60,000 soldiers engaged in heavy fighting with the Mongol and Soviet troops in Outer Mongolia alone. On July 16, Japanese military headquarters reported that Russian planes had bombarded the town of Furoruji, railway junction southwest of Tsitsihar, and that in the raid two buildings were destroyed and a number of people seriously wounded. This air attack was the third within a week against rail centers in Manchukuo, and the Japanese Government lodged a protest with the Government at Urga, capital of Soviet-protected Outer Mongolia. On July 18, another attack was made by Soviet and Mongol planes on the railway center of Hularshan. The fighting continued through August and early September. Late in August, what a Japanese War Office spokesman, in reporting on the matter later, referred to as a 'disastrous, bitter battle' was fought between Japanese troops and a large Soviet-Mongol mechanized force, resulting in numerous casualties and decisive defeat for the Japanese. The battle was the culmination of ten days' fierce fighting; and according to Japan's own estimates, her dead and wounded numbered 18,000.

An armistice for a cessation of hostilities was agreed upon on Sept. 15 between the new Russian Commissar for Foreign Affairs, Molotov, and the Japanese Ambassador to Moscow, Shigenori Togo. The armistice was to go into effect on Sept. 16, at 2 P.M., the respective forces maintaining what they had held at 1 P.M. on Sept. 15.

Japanese Government spokesmen vigorously denied that the truce was a forerunner of a Soviet-Japanese non-aggression pact, foreshadowing closer cooperation between the two nations. This possibility, however, was pointed out by many competent observers. It is to be noted that one of the immediate effects of the cessation of border warfare was the releasing of large numbers of Japan's troops on the Manchukuo-Siberia border for fighting in China Proper.

Shortly after the signing of the armistice, Japan gave Great Britain official assurance that she would not permit the arming of German merchantmen in her ports for commerce raiding. While Japan avoided the use of the word 'neutrality,' such a position was implicit in her assurance. (See also U. S. S. R.)

Late Military Movements in China.

Following the Mongolian border truce with Russia, Japan launched an offensive against the city of Changsha. But the Chinese, following the tactics used at Taierchwang in the spring of 1938, withdrew to the surrounding mountains, and then suddenly attacked the long Japanese columns, forcing them to fall back 60 miles north of the city with heavy losses in men and equipment.

On Oct. 15, Premier Abe announced that in the course of a month or two, a new Central Government in China, headed by Wang Ching-wei, would cooperate with Japan in the reorganization of East Asia. He stressed the point that such reorganization must be carried on without the aid of outside powers.

Late in November, Japan had begun a drive towards China's important highways in the Southwest. In December a Japanese force landed in the vicinity of Pakhoi on the South China coast near the Indo-China border, and pushing westward from Kwantung through Kwangsi, finally captured the city of Nanning, strategic communications point in Kwangsi on the trade route to Indo-China.

At the end of 1939, after two and one-half years of warfare in China, Japan, while she had in a series of brilliant military victories overrun half of China, was still a long way from final victory. Today, the Japanese army controls less than one-third of the vast area it claims to have conquered since the beginning of the war. It has tight control of the railways and main population centers, but the remaining two-thirds is dominated by Chinese guerrilla forces, now constituting one-third of the entire Chinese armed forces, which means that approximately 600,000 Chinese soldiers are operating inside the Japanese lines. A map of the Japanese-controlled areas would show a series of lines from five to thirty miles wide in a more or less checkerboard arrangement, designating railway lines and vital highways, with heavy dots indicating important cities on or between these lines where Japanese troops are garrisoned. The intervening countryside, including thousands of small villages and hundreds of walled towns, still remains in Chinese hands.

American Protests and Japanese Reactions.

American resentment over 'bombings, indignities and manifold interference with American rights' in China was voiced by the American Ambassador to Japan, Joseph Grew, in a public speech in Tokyo on Oct. 19. The frankness of Mr. Grew which, as he himself phrased it, came 'straight from the horse's mouth,' offended and worried Government officials, who up to this time had not informed the Japanese people of American displeasure over events in the Sino-Japanese war. 'The 'new order' in East Asia,' said Mr. Grew, 'has been officially defined in Japan as an order of security, stability and progress,' but added that this ''new order' had appeared to include depriving Americans of their long-established rights in China, and to this the American people are opposed. . . . It is probable that many of you are not aware of the increasing extent to which the people of the United States resent methods which Japan's armed forces are employing in China and what appear to be their objectives.' After enumerating specifically some of the actions of the Japanese military to which the Americans are opposed, he concluded, 'Only through consideration of those facts, and steps to alter those facts, can Japanese-American relations be improved.' The day following this speech, the new Foreign Minister, Mr. Nomura, declared that 'the determination of the entire Japanese nation to bring about a new order in East Asia is too strong to be changed or affected by the interference of a third power.'

During late October and through November and December, the American Ambassador and the Japanese Foreign Minister conferred frequently regarding continuing interference with American rights in China which, despite innumerable representations to the Japanese Government, were without redress. On Nov. 10, the Japanese Embassy in Washington announced that settlement had been made of a number of claims for injuries to American interests, as a result of the Japanese invasion of China, some of the claims being of long standing.

Through December, Japan continued to feel concern over the coming expiration of her trade treaty with the United States on Jan. 26, 1940. As gestures of appeasement, more claims for damages to American property were paid, and on Dec. 18 the Japanese Foreign Minister stated to Ambassador Grew that the Japanese Government intended to reopen the Yangtze River between Shanghai and Nanking, and also the Pearl River 'at the proper time.'

This action brought about severe criticism from the intensely nationalist elements in the Government, who warned the Premier and the Foreign Minister that they would not tolerate any policy of 'appeasement' towards the United States, which would have the effect of encouraging continued resistance by Chiang Kai-shek. Demands were made that the China 'incident' be speedily brought to an end. Discontent with Government policies and dissatisfaction over the failure to settle the China affair resulted on Dec. 27 in the adoption of a resolution by the Lower House, signed by 240 out of the 446 members, asking the Cabinet to resign. While the Cabinet refused to comply, it was clear that a crisis was approaching, and that in face of increasing criticism the Abe Cabinet could not last. (A new Cabinet was formed early in 1940.) (See also UNITED STATES: Foreign Relations — Far East.)

Agreements with Russia.

It became clear during November that a movement for accord between Russia and Japan was gaining favor both in Moscow and Tokyo. On Nov. 20, the Russian Commissar for Foreign Affairs and the Japanese Ambassador in Moscow 'exchanged opinions on the fundamental principles upon which a Soviet-Japanese trade treaty must be based,' according to the official Russian News Agency. Trade between the two countries since 1925 has been limited to payment in certain classes of goods, as part payment for the Chinese Eastern Railway. However, the advocates of cooperation with Russia do not have wide support, as there is still great distrust of Soviet intentions. The element most in favor of a rapprochement with Russia now is the Army, worried over the progress of the war in China, and believing that if Russian aid to Chiang-Kai-shek were cut off, Chinese resistance would collapse, and they could write finis to what has been a very costly venture.

At the end of the year Japan reached an agreement with Russia, whereby Japan agreed to pay the final installment on the Chinese-Eastern Railway, which she had so far refused to do, claiming the road had been sold to Manchukuo. The final payment on the Railway amounted to ¥5,900,000; but ¥1,300,000 was to be deducted for railroad accounts owed by Russia. In return, Russia renewed the Kamchatka fisheries agreement for another year, with a promise to begin negotiations for a long-term agreement immediately. (The agreement reached on April 2 covered the fishing rights for only the remainder of 1939.)

Mandates Commission on Japanese Pacific Islands.

The Mandates Commission of the League of Nations announced on Dec. 12 that Japan had failed to send a scheduled report to the Permanent Mandates Commission regarding her administration of the former German Islands in the South Pacific. However, Japan made it plain when she withdrew from the League that she considered the former islands her outright possessions, and was prepared to back up her claims with force if necessary. (See JAPANESE PACIFIC ISLANDS.)

Economic Situation.

Early in December, Japan faced a serious rice shortage because of the failure of the rice crop, and 80,000 bushels, purchased in China by the Army, were sent to Japan to relieve the scarcity. The drought, 'the worst in 170 years,' also brought on a power famine, and this situation caused the Electricity Board to warn that Japan must restrict Her consumption of power for several years.

New taxes on a number of commodities were announced on Dec. 5, as well as an increased income tax. Three days later the Japanese Cabinet approved the largest budget in the country's history. It calls for expenditures of ¥10,360,000,000 (the yen was valued at about 23½ cents on Dec. 8). Of the total, ¥6,767,000,000, or 64 per cent is for military purposes. It is expected that ¥5,400,000,000 will be raised by a loan. The Japanese newspaper Asahi stated that financial circles in Japan were concerned over the budget, not because of the increased amount called for, but because they believe Japan does not possess sufficient material to carry out the work for which budgetary provision was made.

Contrary to predictions at the end of the first year of the war in China that Japan's finances would be unable to stand the strain much longer, she has come through another year and a half of warfare with her finances, though weak, still not on the point of collapse. It was claimed, as one authority has pointed out, that Japan could not stand a debt of 10,000,000,000 yen, but that she has survived a debt well over that amount and that Government bonds issued to support her expenditures have been absorbed by Government banks at the rate of ¥300,000,000 a month. This, of course, cannot go on indefinitely. Although Government figures showed a favorable trade balance of ¥26,300,000 for 1938, which was a decided improvement over the adverse balance of ¥607,700,000 for 1937, this did not result from increased exports, which fell by 35 per cent, but from sharp curtailment of imports of industrial raw materials; and furthermore, these figures did not include the huge volume of exports to Manchuria. If we exclude this trade, which contributes nothing to necessary foreign exchange, the so-called surplus becomes a deficit of ¥426,900,000 (the yen is valued at roughly 25 cents in United States money). To balance her accounts, Japan has been compelled to export gold. In the two and more years she has been at war, she has sent somewhat over ¥1,685,000,000 abroad; and her total gold reserves now are not much over half that amount. (See also INTERNATIONAL BANKING.)

Trade with United States in 1939.

For the first five months of 1939, American exports to Japan totaled $96,290,000, as against $109,669,000 for the same period in 1938. American imports from Japan in the same period amounted to $50,242,000 — an improvement over the $47,849,000 for the corresponding period of 1938. During the first six months of 1939 Japan shipped gold to the United States amounting to $85,227,000, and silver amounting to $2,587,000. Owing to the income from these bullion shipments, she converted a five-month trade deficit of over $45,000,000 into a net credit balance against the United States of over $40,000,000, which has enabled her to make down payments on various types of machinery. By August, Japan's exports to the United States amounted to ¥54,486,000, and by October they had risen to ¥78,553,000 — an increase of 44 per cent. In the same period her imports from the same country rose from ¥68,158,000 to ¥82,857,000. Her trade with Latin America showed a similar trend.

Trade with Germany and Russia.

Owing to the British blockade, Japan's trade with Germany, which before August 1939 showed exports averaging ¥3,000,000 a month, had dropped in value to ¥7,000 by October. Her imports from Germany dropped 46 per cent. Japan's trade with Germany has never been large, and she has purchased from the Reich about eight times as much as she has sold. Roughly 75 per cent of Japan's foreign trade has been with Great Britain and the United States. While for a time Britain's imports of Japanese canned foods rose sharply owing to the possibility of a submarine blockade, Japan's European trade as a whole has declined so far this year from ¥31,854,000 to ¥24,058,000. Japan's Russian trade is slight, the total Russo-Japanese trade for the first ten months of 1939 being valued at ¥13,000,000. (See also WORLD ECONOMICS.)