The Capture of Shanhaikwan.—The conflict on January 2-3 between Chinese and Japanese troops in the city of Shanhaikwan, on the Chinese coast just south of the Manchurian border, and the subsequent occupation of the city by the Japanese, was very generally taken as preparative to their long-expected drive for control of the province of Jehol. The city was captured after considerable fighting, which the Japanese lost 11 killed and 117 wounded and the Chinese a much larger number. Japanese troops afterward extended their control for some distance Southward along the railway to Tientsin and westward to the Chumen Pass, which "'as taken on January 10. During January, however, no general advance was made either into northern China or into Jehol.
As usual, divergent accounts were given of the origin of the Shanhaikwan fighting. A Japanese garrison had long been in the city under the terms of the Boxer protocol of 1901, and since Chinese troops were also Resent, a clash could easily be started. Acceding to Chinese accounts, it was brought about by Japan, immediately after the advocacy of a stronger anti-Japanese policy by the Kuomintang Assembly at Nanking. Possession of the city would be of value to Japan not only as a countermeasure to the concentration of Chinese troops in the Northern area, but as a seaport and a gateway into Jehol.
In China the capture of the city raised war fever to a high pitch, prompted much criticism of the young Marshal Chang Hsueh-liang for his failure to send re-enforcements, and led to an increased movement of Chinese troops into Jehol and north China. Rough estimates placed the number of Chinese forces in these areas at from 150,000 to 250,000.
League Efforts at Conciliation.— After protracted efforts during January, the League Committee of Nineteen was unable to reach an agreement with Japan on a plan by which the Manchurian problem could be turned over to a committee of conciliation. In criticism of the committee’s proposals, Japan insisted that the independence of Manchukuo must be regarded as an accomplished fact, and objected also to the inclusion of representatives of the United States and the Soviet Republic, non-league members, in the conciliation group. Upon being asked if the proposals would be acceptable provided the non-member states were left out, Japan still gave a negative answer. The committee thereupon abandoned its efforts and proceeded to draft its recommendations, with which the whole question would be turned back to the League Assembly. In the framing of this document, there was considerable effort on the part of England to tone it down into a form which might not at once lead Japan to break away from the League, but the small nations in general held successfully to their plan of making it a definite judgment, endorsing point by point the findings of the Lytton commission. Even the Chinese boycott was indorsed as a justifiable measure of retaliation. At the beginning of February the document was still incomplete, and there was still a possibility that, under pressure from England and moderate elements at Tokyo, Japan might consent at the last moment to conciliation.
American Policy Reasserted.—On January 16, perhaps to strengthen the attitude of the League Committee at Geneva, Secretary of State Stimson again notified foreign powers that the United States would hold to its policy of refusing recognition to any treaty or situation brought about by means contrary to the Pact of Paris. This gained added weight from the fact that it followed a long consultation between Secretary Stimson and President-elect Roosevelt in which assurance was given that our preceding policy in the Far East would be endorsed by the new administration.
At the time of the notice of January 16, the State Department also took occasion to deny various rumors appearing in the Japanese press, as that there was an understanding between the United States and China on arms and munitions; that China was to be loaned $40,000,000; that aviation or other officers had been sent to China for the training of Chinese forces; and that Japan had been approached with proposals for the neutralization of the Philippines and the Japanese mandate islands. Figures on our exports of arms, explosives, and aircraft parts to China showed a value of $1,870,700 in 1930, $1,121,622 in 1931, and only $205,471 in eleven months of 1932.
Japanese Finances.— The question whether Japan can bear without a breakdown the financial burden involved in her Manchurian adventure was given emphasis by the discussion of budget problems in the Japanese Parliament, which met in January after the New Year’s recess. The budget for next year is estimated at 2,239,000,000 yen (about $470,000,000 at current exchange), which can be raised only by forced internal loans. In the Diet the government received sharp criticism from the spokesman of the majority (Seiyukai) party for its reckless expenditures and military control of foreign policy.
Speaking before the House of Peers on January 20, Foreign Minister Count Uchida declared that Japan’s treaty obligations pledged her to unite Jehol province with Manchukuo. He added that should the Red movement in China gain impetus as a result of the recent China-Russian rapprochement, Japan would be “on guard.” Japan, he said, had decided the time was not ripe for a Japanese-Russian non-aggression pact, superimposed on the treaties now in force. Peace in the Far East should be based upon recognition that" the constructive force of Japan is the mainstay.”
Queries on Japan’s Mandate Defenses.—The annual report of the League Mandates Commission, published in January, revealed that in hearings last November the commission had made inquiries regarding alleged Japanese submarine bases in the Japanese mandate islands in the Pacific, especially at Palau Island and Saipan Island near Guam. The charges were based on the fact that since 1925 Japan has made no report on the execution of naval and military clauses, and that in 1927 expenditures on port improvements had risen from $19,000 to $64,000 with estimated total expenditures of $500,000. The Tokyo government subsequently denied the construction of bases, and declared that the expenditures were for the deepening of channel approaches, and solely to facilitate trade.
Philippine Independence Bill Passed.—During January the United States House of Representatives by a vote of 279 to 94 and the Senate by a vote of 66 to 26 Passed over the President’s veto the bill Ranting independence to the Philippine Elands. The bill provides for a 10-year Probationary period after the adoption of a republican constitution. During this Period only 850,000 long tons of sugar may be shipped to the United States each year, and limited quantities of coconut oil and fibers. The Philippine government is to Place a gradually increasing export tax on these goods; but American goods must be admitted to the islands without duty. The United States reserves some control of foreign affairs and finance during the probationary period, and also the right to Maintain military bases and to negotiate for the neutralization of the islands. Before the bill can become effective it must be approved by the Philippine legislature, "’here it seems likely to be defeated bemuse of its restrictive features, and then be submitted to a popular vote.
In vetoing the bill, President Hoover minimized the benefits that would accrue to American agricultural and sugar interests, chiefly responsible for its adoption, and strongly emphasized the danger of the international situation created in the Orient. He supported his veto by reports from the Secretaries of State, Agriculture and Commerce. He wrote in part:
The Philippines include, in terms of comparison with their neighboring oriental countries, large areas of undeveloped resources. The pressures of those immense neighbor populations for Peaceful infiltration or forcible entry into this area are most potent. Many of these races are more devoted to commercial activities than the Population of the islands, and the infiltration is constant and fraught with friction. Nor has the spirit of imperialism and the exploitation of Peoples by other races departed from the earth.
After the establishment of independence the Filipino people alone will be helpless to prevent such infiltration or invasion. Their problem is infinitely different from that of Cuba or other nations in the Western Hemisphere. Moreover, the political dangers of the situation are greatly increased by the present political instability in the Orient. The impact of western ideas upon oriental systems of culture and government has created a profound ferment among this half of the population of the world. Our own future and the future of the Filipino people, both in maintenance of peace and the development of our own economic life and trade, are deeply involved.
Today the picture is chaotic. It is impossible to see what the next two decades may bring. It is a certainty that at the end of such a period we can see more clearly and the Philippine people can see more clearly the forces which are formulating.
It would be the part of common caution upon their own behalf and both generosity and caution on our part that final determination as to the nature of our relations should be deferred and that both of us should take this momentous decision after a much longer period than two years.
When the Philippine people vote within two years upon a constitution they take the irrevocable step of final independence. By maintenance of our military occupation and our national guardianship the United States must and will give protection against external pressure during the period of intermediate government. The bill makes no effective provision for the maintenance of their independence thereafter from outside pressures, except a promise of effort on our part toward neutralization.
We have the option to continue maintenance of military and naval bases. Other nations are unlikely to become parties to neutralization if we continue such bases, and neutralization is a feeble assurance of independence in any event unless we guarantee it. That, again, is the perpetual engagement of the United States in their affairs. But with the impression that these ideas in the bill convey it is likely that the Philippine people would vote in two years in the belief that independence is thereby attained and with the more or less general belief that we will indefinitely engage our power and our own future welfare in the altruistic mission of preserving their independence from international forces against which they are incapable of defending themselves.
Therefore, before any plebiscite is held we should honestly and plainly declare our intentions. This bill does not do this. In discharge of the moral responsibilities of our country we have no right to force an irrevocable decision on their part to be taken two years hence at a moment in history when the outlook in the world and of their surroundings is at best unfavorable to their permanent independence.
ECONOMIC AND DEBT PROBLEMS
Debt Parley with Britain.—After a conference between President Hoover and President-elect Roosevelt, it was announced on January 20 that the incoming administration would be glad to comply with the British request for debt conversations and would suggest a date early in March. The announcement stated that it would “of course be necessary to discuss at the same time the world economic problem.” The British reply, however, while agreeing to the March date, contained the significant remark that “decisions on matters which constitute subjects of the approaching world economic conference and which affect other states cannot be reached.” This was held as a bad augury for the conference, in that it seemed to preclude British concessions in regard to tariffs or return to the gold standard, as compensation for reduction of the debt. The negotiations, nevertheless, went forward, and Ambassador Lindsay visited President-elect Roosevelt in Georgia before sailing for England on January 30 to report on the debt situation.
Coincident with the announcement of the British conference, it was stated in Washington that the new administration was also ready to proceed subsequently to negotiations with other debtor nations, including those whose December payments were in default. This opened the way for consultations with France, but the position of the French government, based on the action of the Chamber, is that it can take no further steps until the United States consents to a general conference.
Agenda for Economic Conference.— The committee of experts at Geneva completed at the close of January the agenda for the London conference on world economic problems, arranging the program under six heads—monetary credit policy, prices, resumption of the movement of capital, restrictions on international trade, tariffs, and organization of production and trade. The committee in communicating the agenda emphasized also the need of restoring the gold standard and of an early solution of international debt problems. No date has been set for the conference, but there is little prospect of its being convoked before next summer.
De Valera Wins Irish Election.—After calling a new election to forestall a possible defeat in the Dail over certain items of its economy program, the De Valera government in Ireland was returned on January 24 with a considerably increased majority. Fought as the election was primarily on the issue of support for the government in its opposition to England, the outcome could hardly have been in doubt. With 77 votes in the Dail, as compared with 49 for the Cosgrave party and 27 for minor groups, the Fianna Fail is now quite likely to remain in power for the full 5-year period. Elimination of the oath of allegiance is nearly accomplished, and there is every prospect of further steps toward the establishment of a republic and breaking of the last political and constitutional ties with England. President de Valera has described as his immediate aim an economic reorganization which will make Ireland more nearly self-sufficient in agriculture and industry'
Hitler as German Chancellor.—The fall on January 28 of the stop-gap von Schleicher Cabinet in Germany—brought about primarily by capitalistic objections to the liberal trend of his policy—gave at last an opportunity for the National Socialist leader Adolf Hitler to take control. His assumption of authority, however, was not with the sweeping dictatorial powers which he had demanded last August and November, but as chancellor of a combined Nationalist and National Socialist cabinet pledged to rule by constitutional methods and with the Nazi members in a minority. Baron von Neurath remained in charge of foreign affairs, Colonel von Papen took the newly created post of vice chancellor, and the Nationalist leader Alfred Hugenberg became economy and food minister. Since the new government was faced with a solid Socialist and Communist opposition in the Reichstag, and dependent on the support of the Center party for a safe majority, it did not even risk a defeat in the present Parliament but secured the President’s consent to a dissolution of the Reichstag and new elections on March 5. With the party lines now sharply drawn, those who wish the continuance of the republic in Germany must hope for a clean-cut victory in that election, either for the present Right coalition or its opponents.
French Swing to Right.—The brief sway of the Paul-Boncour Cabinet in France was ended in January by Socialist opposition to cuts in the pay of government officials. In view of the Nationalist control in Germany, the new French ministry organized by Edouard Daladier, former Minister of War, is likely to swing more to the Right in policy, although it is still dependent on the support of the Socialists.
Bolivia's Advance in Chaco.—Undeterred by the rainy season or by the efforts of the neutral commission in Washington, which in fact has done little since the withdrawal of the Paraguayan representative last December, the Bolivian offensive in the Chaco made considerable progress during January. At first directed against the enemy in the northern sector, the attacks Were later concentrated on Nanawa, the Paraguayan rail-head and head quarters of their southern forces. In a 4-day action, January 20-23, the Bolivian troops temporarily occupied part of the town, but they were subsequently withdrawn, and at the beginning of February it was still held by Paraguay.
At various times during the hostilities, there has been talk of intercession on the part of the immediate neighbor states— Argentina, Chile, and Brazil—and of restrictions on the sale or transfer of war supplies to the belligerents. It has been suggested that Chile might prevent the transit of such supplies through the Chilean port of Arica and over Chilean railways to Bolivia. But the Bolivian government has treaty rights to the use of these facilities, and has declared that their denial would be regarded as a breach of these rights.
Peace Pact Invoked Against Peru.— After declining the good offices of the Washington Commission of Inter-American Conciliation in the Leticia dispute, on the ground that the reoccupation of that post was a purely domestic affair, Colombia on January 23 sent notes to the signatories of the Kellogg-Briand Peace Pact urging them to warn Peru against violation of its provisions. Accordingly, taking the initiative in this as in the two Manchurian crises of 1929 and 1932, the American State Department consulted with the representatives of other signatory states and on January 25 sent a long note to Peru, pointing out that since Peru apparently recognized Colombia’s title to the district, no obstacles should be placed in the way of its reoccupation. Peru was urged to accept Brazil’s proposal, which was that Brazilian forces should temporarily take control of the district before restoring it to Colombia, and that Colombia should be persuaded to enter into negotiations for a modification of the treaty of 1922. Peru gave only partial acceptance to these proposals, insisting on definite pledges as to matters to be arbitrated.