THE WAR IN CHINA
Renewed American Protests.—Following the settlement of the Panay affair in December, the United States government found it necessary once more to protest vigorously on January 17 against illegal entry of property owned by American citizens and seizure of American-owned goods at Nanking and elsewhere in China. It expressed the view that the steps taken to protect foreign property were evidently inadequate and requested further safeguards. Mr. Grew, the American Ambassador at Tokyo, was informed that an investigating commission of high military rank would be sent at once to Nanking. Ten days later dispatches from Mr. John M. Allison, 3d Secretary in charge of the American Embassy at Nanking, reported that while entering a Japanese barracks with police officials, in the investigation of outrages committed after illegal entry into American property, he and another American had been slapped in the face and otherwise injured by Japanese troops. Further protests and apologies resulted, together with an assurance from Japan that the officers and 20 men involved in the assault would be tried by court- martial.
Developments in Japan.—At a January session of the Japanese Imperial Conference, the fifth to be called in Japanese history, it was decided to break off diplomatic relations with the Nanking government in China, without precluding “friendly co-operation” with the Chinese people, or with other governments that might be set up in China. Assurance was also given, in the official report of the conference and later in the Diet by Foreign Minister Hirota, that there was no change in the Japanese policy of respecting the territorial integrity of China, the Open Door, or the interests of foreign powers.
Following the rupture of relations, the German government announced that it was no longer concerned in mediation between Tokyo and Nanking. It was made clear that the Japanese peace terms offered by Japan and rejected by China included (1) Chinese participation in the Anti-Communist Pact, (2) establishment of demilitarized zones in the necessary regions, (3) trade and political accords between China, Japan, and Manchukuo, and (5) indemnities.
According to news dispatches from Tokyo the possibility of Japan’s economic and financial collapse have perhaps been exaggerated. It is true that her national debt has doubled in the last six years and now amounts to nearly 12,000,000,000 yen, but this is only 6 times the annual national revenue, as compared with a British debt of 10 times the revenue. Japanese foreign trade actually increased ln the first 10 months of 1937, though it is now suffering seriously from governmental control measures. Military expenditures, already consuming more than the total national revenue, will increase with the prolongation of the Chinese conflict and well-recognized danger of the involvement of other powers.
League Council Action.—At the 90th session of the League Council, which ended on February 2, the only action taken regarding the Far Eastern situation was the adoption of a resolution which deplored the intensified hostilities in China and recommended
that League members refrain from any action which might have the effect of weakening China’s Power of resistance, thus increasing her difficulties in the present conflict, and should consider how far they can individually extend aid to China.
The resolution further suggested that those states represented in the Council with special interest in the situation should lose no opportunity to consult with other powers over the feasibility of further action. The Chinese delegate, Dr. Koo, declared the resolution “inadequate,” but expressed the hope of more positive steps later on the part of the interested powers.
In the matter of League reform, no decision was reached regarding the removal of League sanctions obligations on the member states, though it was pretty well understood that acceptance of such ligations would be voluntary on the part of individual members.
THE SPANISH WAR
Mediterranean Sinkings.—In England political writers have made confident prophecies of concerted aggressive action in the early spring on the part of Germany in Central Europe and Italy in the Spanish War, and some support for this forecast was found in the renewal of submarine attacks in the Mediterranean. On January 31 the British steamer Endymion was sunk by torpedo off Cartagena with the loss of ten lives. According to survivors no warning was given. The Barcelona government at once asserted Italian responsibility and declared that Italy had turned over two submarines and four destroyers to the Insurgents. British naval patrols in the Mediterranean were increased, and British, French, and Italian diplomats met in London to consider further action against Mediterranean piracy.
The Endymion was the first ship sunk since the Nyon Agreement of last September. In the case of the United States tanker Nantucket Chief, seized January 17 about 48 miles north of the Balearic Islands while carrying oil from a Russian Black Sea port to Barcelona, the Franco government agreed to release the ship and the captain, who had been imprisoned, but gave no assurance of settlement for the seized cargo.
In the land war the Barcelona government’s offensive in the Teruel area held up General Franco’s expected drive toward the east coast cities. The Franco government, however, proceeded to a more permanent organization of civil administration. On February 1 a new cabinet was announced with General Franco at its head and with all but two of the other ten posts filled by civilians.
EUROPEAN POLITICS
New Chautemps Cabinet.—After four days’ delay following the fall of the French Cabinet on January 14, a new government was formed with M. Chautemps still at its head but with the Socialists and Communists out and the ministerial posts filled almost wholly by members of M. Chautemps’ own Radical Socialist (in reality left center) party. Most significant was the reorganization of the Army, Navy, and Air ministries under one office with M. Daladier at its head as Minister of War and National Defense, and with General Gamelin as Chief of Staff. This was with the expressed aim of putting France on a war footing. Georges Bonnet remained in the Cabinet as coordinator of National Economics and Finance and Yvon Delbos continued as Foreign Minister. The fall of the Ministry and its reorganization were attributed chiefly to the decline of the franc and the desire of M. Chautemps to free himself from the pressure of the Communist wing of the Popular Bloc. The new Ministry was dependent on the Socialist Party for a narrow majority, and was generally regarded as transitional in character and as paving the way for a Ministry based more solidly on the Center parties, in accord with the more conservative swing of popular feeling.
Prior to the formation of the Chautemps Cabinet M. Blum had failed in an effort to organize a government on a wide front representing “all parties attached to democracy.” Such evidence of solidarity, though not achieved, appeared at least highly desirable in view of the weakness of French finances and French loss of prestige in foreign affairs. The latter decline, increasingly rapid since the seizure of the Rhineland in 1936, would apparently explain the efforts of some of France’s Balkan allies to neutralize their position by better understandings with Berlin and Rome.
Fascist Trend in Balkans.—The decline of French influence in Central Europe may be attributed partly to the uncertain support of England, partly to the economic advantage of Germany in that she offers a better market for Balkan goods and for the present at least can offer better bargains in return. Germany’s commercial advance in the Danube Valley has been accompanied by an aggressive spread of political doctrines, so that in nearly every Balkan nation there is a strong fascist if not pro-German party. Though German and Italian aims in this region might easily conflict, they are kept in harmony for the present by the mutual advantage to the two nations in a united front against the democratic powers. At Budapest in early January, at a meeting of the Italian, Austrian, and Hungarian Foreign Ministers, the efforts of Italy to break down French influence and the solidarity of the Little Entente were clearly manifest. Austria and Hungary, however, declined definitely to consider joining in the Anti-Comintern Pact would enter only into a very general criticism of the League, and went no further than to extend de jure recognition to the Franco regime in Spain. Italy sought also, though without much success, to act as mediary between Hungary and Rumania in their territorial disputes, as a means in smoothing Rumania’s path toward an accord with Rome-Berlin. Later in the month, much attention was paid the Yugoslav Prime Minister, Milan Stoyadinovitch, during his visit to Germany, and he was treated to an impressive demonstration of social and military progress under Nazi rule.
German Cabinet Changes.—In Germany a weakening of conservative influences in Nazi leadership and a trend toward more adventurous policy was seen in the Cabinet shake-up at the opening of February. Of chief significance in the change was the resignation of General von Blomberg as Minister of War and the substitution of Ambassador von Ribbentrop for Baron von Neurath in the Foreign Office.
Rumanian Elections.—Following the appointment of Octavian Goya as Rumanian Premier, with the support of only 9 per cent of the Chamber, King Carol’s next move was to dissolve Parliament and call new elections to be held during the first week of March. With Goya’s recognized skill in manipulating election machinery, it was hoped that he might secure for his party the 40 per cent of the total vote which, under the peculiar Rumanian system, would ensure parliamentary control. Against such manipulation, leaders of both the Liberal and Peasant opposition parties were pledged to fight tooth and nail. The election was of some international significance, for upon it might hinge the decision whether or not Rumania would come to terms with Italy and Germany, opening to these nations free access to her vast oil, grain, and other natural resources. Another theory was that after Using Goya for the anti-Semitic campaign, which had a popular appeal despite its injurious effect on business, the King would throw over his minority Premier and turn hack to the Liberals.
Soviet hostility to the changes at Bucharest was shown by the withdrawal of the Soviet ambassador. Pressure from England was also manifest in the warning that Unless the present trend of Rumanian Policy were checked, King Carol’s projected visit to London might well be deferred. At the League Council meeting in Geneva, Jewish protests against Rumania were kept off the program, but only in the belief that pressure could be exerted more effectively through diplomatic channels. King Carol’s reply to these criticisms was that warmer relations with the fascist powers meant no change in Rumania’s old friendship with France or her loyalty to the Little Entente.
Soviet Purge Checked.—The Supreme Soviet or first all-Russian parliament under the new Constitution adjourned on January 19 after a week’s session and with no legislation other than approval of a new Council of Commissars or Cabinet under Molotoff as Premier and a new Presidium or permanent Committee which, when the Parliament is not in session, can issue decrees with the full effect of law. Of much greater significance was the order of the Central Committee of the Communist Party, issued the day before the Parliament ended, which called a halt on wholesale dismissals from the party and loss of jobs or “elimination” of the people thus cast out. The accompanying denunciations of the purge in the Soviet press were more violent than any reports sent out by foreign correspondents.
While thus easing attacks on suspected enemies at home, the Soviet government took action abroad by withdrawing its envoy in Rumania and by suspending commercial payments to Italy. This last was on the ground that the Italian government had failed to meet payments due on Russian oil and had held up Soviet ships in Italian ports. The Italian retort was that Russia was in debt to Italy “some tens of millions of lire falling due in the current year.”
BRITISH EMPIRE
Anglo-Irish Negotiations.—The meeting in London in mid-January for a settlement of Anglo-Irish difficulties went off with scarcely anticipated smoothness. The Ulster problem was raised but laid on the table by common consent. What seemed a possible solution was brought forward for the conflict arising out of Ireland’s refusal since 1932 to pay the $25,000,000 land annuities due to English landlords. This refusal caused England to lay a penalty duty on Irish products and led to a mutually injurious tariff warfare. The solution proposed was that British naval bases on the Irish coast be turned over to Eire, that England be allowed to use these and other bases to be constructed, and that Eire pay $25,000,000 annually for new armaments and as its share in the upkeep of these defenses. Further negotiations were suspended while experts set about making arrangements for a trade agreement based on mutual tariff concessions.
On the Ulster question, De Valera’s proposal was for boundary revision, guarantees for the Protestant minority, and an all-Irish parliament together with a large measure of self-government in Ulster. The British position is that this could be accepted only with Ulster’s consent.
Palestine Partition Delayed.—The British White Paper published in January indicated that the government was no longer fully committed to the much criticized plan for a tripartite division of the Holy Land, but had appointed a new technical committee to investigate all proposals and either draw up a new plan of division or suggest alternatives. Thus months will pass before the problem will again come before the League and the races concerned. In Palestine, the British military campaign was reported to have brought increased order, but to have been met by a new flood of anti-British propaganda from foreign sources.
UNITED STATES AND LATIN AMERICA
Anglo-American Trade Pact.—Following the appointment of Joseph P. Kennedy as new American Ambassador at London, it was announced that British trade experts would arrive in Washington in February for the opening of Anglo- American trade negotiations. The State Department published a list of articles in which tariff revision would be considered and requested the filing of views by persons or firms concerned prior to hearings set for March 14. Hearings on proposed changes in the trade pact with Canada were set for early April.
Haitian Settlement.—The dispute over the alleged massacre of Haitians in the territory of the Dominican Republic was settled in January by the signing of an agreement which provides for the payment to Haiti of $750,000 indemnity. The agreement was reached at Washington through the assistance of the Permanent Committee of Inter-American conciliation, under the terms of the Gondra Treaty of 1923.
Brazil Not Fascist.—Dispatches from South America show the anxiety of the Vargas government in Brazil to demonstrate that it is a dictatorship of the familiar American pattern and not of a fascist or other imported brand. It is true that moves were made for the expulsion of Jewish immigrants, but the processes employed were legal, and the deportation order was later suspended. The new government was described as a highly expedient and popularly approved move to abolish state and local control and concentrate power in the central government, with the President’s term extended six years to insure that this power should remain in the proper hands. Foreign investments are still sought for, though there is an inevitable trend toward government control of production and services, such as mines, water power, banking, and insurance. The political changes are characterized as an experimental effort toward developing a purely Brazilian type of government suited to the country’s needs-
Mexico Raises Tariffs.—Following its abrogation of the Morrow-Calles oil agreement on January 1, as a step toward forcing increased payments from foreign oil companies, the Mexican government m the same month adopted severe measures against American trade. Duties were doubled or tripled on most imports from the United States except machinery, and were apparently directed chiefly against American goods, rather than such articles as hardware and chemicals, which come largely from Germany. In the past about 70 percent of Mexico’s imports have come from the United States.