CENTRAL EUROPE
Czech-German Tension.—Feverish diplomatic activity over the central European situation continued through the first week in September, and it appeared that even among German leaders chiefly responsible for the outcome there was still uncertainty whether or not to force the issue with Czechoslovakia at the risk of a European war. On September 1 Chancellor Hitler rejected a 3-month truce suggested by the Czechs, but showed willingness to continue immediate negotiations. The Czech proposals for a “cantonal-district” reorganization had already been put forward as a basis for negotiations, apparently with mediator Runciman’s approval, but it was at once manifest that on this and all other questions, the Sudeten leaders could make no decision without word from Berlin.
Meantime the grand scale “autumn maneuvers” of the German Army on the Czech frontiers were declared in anti- Nazi quarters to be in reality an advance mobilization, and it was significant that naval maneuvers would put the British Fleet in its battle stations at the north of Scotland coincidently with the Nazi party Congress in September and the outbreak of bellicose nationalism to be expected at that time.
It would appear that England, by consenting to the employment of a former British cabinet officer as mediator in the Czech-German dispute, however unofficially, had inevitably taken on increased responsibilities. If Czech proposals, approved by Runciman, were finally rejected by the Germans, and a rupture followed, would not England be practically forced to join France and Russia in support of Czech independence? In any case, as in July of 1914, speculations as to England’s course had much to do with the decisions at Berlin.
Courting Hungary.—During August the favor of Hungary was sought both by Germany and by her smaller possible opponents in central Europe. From the Little Entente, in conference at Bled, Yugoslavia, came consent to Hungarian rearmament, accompanied by exchange of conciliation pacts between Hungary and the states of the Entente. From Germany, as an accompaniment to the visit of Regent Horthy to Berlin in the third week of August, came assurances that Germany would respect Hungary’s frontiers, and that Hungary might profit by economic and political co-operation with Rome- Berlin. With the Nazi movement growing in Hungary, and with Germany taking two-fifths of all Hungary’s exports and three-fourths of her agricultural produce, it appeared that a “cold Anschluss” might be not far away.
SPAIN AND MEDITERRANEAN
Franco Bars Withdrawal Plan.— Although accepted by the Loyalists, the proposal for joint withdrawal of foreign troops from Spain was vetoed by General Franco in all its essential details. His note late in August insisted that withdrawals must be not proportionate but equal from each side; that belligerent rights should be granted prior to withdrawals; and that the proposals for boundary supervision and neutral sea control were unsatisfactory in many ways. Thus hopes were dashed for the adoption of the plan or for contingent adoption of the Anglo-Italian agreement. It was assumed that Italy influenced Franco’s reply, and that Italy was less concerned over the execution of the agreement than over a Franco victory. British efforts thereafter were directed toward keeping the leaky nonintervention craft afloat as long as possible, and avoiding a break with Italy so long as there was no flagrant disregard of the Anglo- Italian pact. In Spain, despite stiffened Loyalist resistance, the prospects were increased for a Franco victory rather than the stalemate hoped for by British leaders.
Palestine Troubles Increase.—The most serious aspect of the strife between Jews and Arabs in Palestine, which British writers allege to be still fomented and supported by Italy, is that it has spread unrest throughout the Mohammedan world. Ecclesiastical authorities in Bagdad were reported to be advocating a “holy war,” with financial if not direct military aid for the Palestine Arabs. The flying visit of Colonial Secretary Malcolm Macdonald to Jerusalem in August emphasized the seriousness of the problem, but he could advocate no better course than to await the Woodhead Commission’s final report. Rumor had it that this report would suggest reduction of the proposed Jewish state to a small coastal strip about 40 miles long by 10 miles wide, containing a 95 per cent Jewish population, and that the rest of Palestine remain indefinitely under British mandate. Naturally this solution would satisfy neither Zionists nor Arab nationalists. Meantime bombings, arson, and other lawlessness continued on an increasing scale, and the League of Nations Mandates Commission meeting in August criticized England for her delay in finding a solution and for the resultant unrest.
UNITED STATES AND LATIN AMERICA
American Policy Restated.—It has been noted that each new pitch downward in international politics has been followed by a pronouncement from the United States Foreign Office which reiterates the American stand in favor of the sanctity of treaties, avoidance of war, reduction of armaments, and in general the right if not always expedient attitude in international affairs. To some it has appeared that such statements have not proved of much practical value, though each new one has been a little stronger than the last. In the seven-point program against “international lawlessness” set forth by Secretary Hull on August 16, the significance lay not so much in the points themselves, which were already familiar, as in the guarded statement that “our practical problem is that of finding and employing the best methods ... of co-operating with other nations that are seeking as we are to proceed along that way [the way of reason].” This tended to confirm the view that the Administration is trending away from our “traditional policy of non-entanglement” and from the isolationist sentiment which put our disregarded Neutrality Act into the statute books last year.
Support for Canada.—The movement away from isolation implied in Secretary Hull’s address of August 16 was further confirmed in President Roosevelt’s speech two days later at Kingston, Ontario, upon his acceptance of the degree of doctor of laws from Queens University, when he said:
The Dominion of Canada is part of the sisterhood of the British Empire. I give you my assurance that the people of the United States will not stand idly by if the domination of Canadian soil is threatened by any other empire.
This was hardly an extension of the Monroe Doctrine for, though not explicitly stated in the doctrine, it has been generally held that any transfer of New World territory among non-American powers would be contrary to the policy there stated. Moreover, it has been well understood for many years that the United States would be quite as much concerned as the British Empire in any threat to Canada from overseas. The speech was warmly received by Prime Minister Mackenzie King, who in trade and defense has pursued what is described as a “North American” policy as opposed to the more imperialist views of his conservative opposition.
On Canadian foreign policy in general Mr. James Frederick Green writes as follows in the July Foreign Affairs:
While profiting from the protection which the United States Navy would afford against any serious threat to Canadian territorial integrity, the Dominion contemplates with some alarm its position as an “innocent bystander” in the struggle for power in the Pacific. Inasmuch as either neutrality in a war between the United States and Japan or belligerency in an Anglo- Japanese conflict would force Canada into a highly unsatisfactory position, any move toward appeasement in the Far East is to the advantage of the Dominion.
Post-war developments have emphasized the essentially North American quality of Canada’s foreign policy. From the Versailles conference, where subsequent events proved Sir Robert Borden rather than President Wilson the more accurate spokesman for the New World, to the Spanish civil war, in which both countries proclaimed their neutrality, Canada has pursued a policy almost identical—mutatis mutandis— with that of the United States. The future holds for both North American countries the same promise of economic and political progress if the menace of a general war can be averted, and the same promise of economic distress and internal disunity in case of war—even greater perhaps in the case of Canada.
Pressure on Mexico.—In another note to Mexico on August 25 the American Department of State characterized Mexican land seizures without provision for effective payment as “unadulterated confiscation,” and again proposed arbitration or submission of American claims to United States and Mexican commissioners and a third neutral commissioner named in accordance with the Gondra treaty. Whatever method was adopted, it was insisted that Mexico should promise to make no further seizures without arrangements for “prompt, adequate, and effective payment.” In a note earlier in the month Mexico declined arbitration but was willing to enter into bilateral negotiations, if Mexico’s economic difficulties were given due consideration. The Mexican Foreign Office took the ground that no principle of international law “makes obligatory immediate or even deferred compensation for expropriations of a general and impersonal character.”
The problem created by the Mexican oil and land seizures is undoubtedly the most difficult faced recently by the United States in the field of inter-American affairs. By conservative critics the State Department is blamed for encouraging confiscations by undue leniency, and by radicals for holding Mexico to stricter accountability than is demanded of other debtor states. Pressure on Mexico endangers the “good neighbor policy,” while any other attitude may encourage a policy of expropriation in other Latin- American countries. Furthermore, in view of the Monroe Doctrine, Great Britain and other European creditors look to the United States to bring Mexico to terms.
Next Pan-American Conference.— The .eighth international conference of American states is scheduled to meet in Lima, Peru, on December 8. Agenda for the meeting will include consideration of an Inter-American Court of Justice and also an Inter-American League of Nations, although most of the American states oppose a union as close as that implied by the latter plan. Other less ambitious projects are concerned chiefly with ratification of arbitration pacts and economic and cultural co-operation. A favorable trend in inter-American relations was indicated by the ratification in late August of the Chaco Peace Treaty, as was emphasized by Secretary Hull in his otherwise gloomy statement, August 27, on the tenth anniversary of the Kellogg-Briand pact.
Soviet-American Trade Pact.—Early in August the trade agreement between the United States and the Soviet Republic was renewed for another year, accompanied by the promise that Soviet purchases in the United States will amount to at least $40,000,000 during the next twelve-month. Imports from Russia to the United States in the past few years have ranged between $20,000,000 and $30,000,000.
Cultivating Inter-American Ties.— The propaganda drives of both Fascism and Communism among the Latin-American nations have apparently led the United States to consider measures of a similar nature, as indicated by the recently announced establishment in the State Department of a “Division of Cultural Relations” and a “Division of International Communications,” both intended to foster friendly relations with other nations of the New World. By means of educational exchanges and radio broadcasts the aim is to “disseminate abroad the representative intellectual and cultural work of the United States.”
Pacific Islands Agreement.—According to an announcement of August 10 the United States and Great Britain have reached a partial settlement of the sovereignty over Canton and Enderbury Islands in the Central Pacific by agreeing to share the use of the islands for commercial air transport and communications. It is stated that the arrangement is in no sense political, and it does not have in view the use of the islands for naval or military purposes. Administration of the islands will be arranged by subsequent negotiations.
Panama-Costa Rica Settlement.— Without the intervention of other nations, Panama and Costa Rica were able to announce in August agreement on a plan for settling their long-standing boundary dispute along the Sixaola River. If the plan is finally adopted, both nations will make territorial concessions at points on the frontier, and will share navigational privileges on the Sixaola.
FAR EAST
Russo-Japanese Truce.—Fighting between Russians and Japanese along the eastern frontier of Manchukuo, which continued with considerable violence for nearly a month, was finally ended by a truce on August 11. According to the agreement then made, the disputed frontier will be established by two Soviet commissioners and two representing Japan-Manchukuo. Japan’s eagerness to secure a settlement was suggested by this arrangement, for she had formerly insisted that the commission include two from Manchukuo and two from Japan. Previous to the truce the Japanese were reported to have moved large forces from North China to the Siberian border, and there was some slackening of the drive on Hankow. The diplomats, however, if not the forces on the spot, were eager for a settlement— Japan obviously because of the strain of her China war and Russia because of the tension in Central Europe. It was reported that Germany had counseled moderation at Tokyo and had warned Japan against dependence on direct support from her western allies.
Japan’s Strained Finances.—During the last week in July Japan shipped nearly $6,000,000 in gold to the United States, bringing the total of gold exported to about $120,000,000 for the present year and over $50,000,000 since July 1. By the close of the summer it was figured that she would have slightly less than $100,- 000,000 available for foreign purchases up to the end of the year. Possibly these difficulties may have accounted for the reported cabinet decision in August to better Japan’s relations with other powers concerned in China, at least to the extent of staving off direct aid to Nanking. Whatever the purposes of the politicians, they had apparently slight influence on the military leaders, for the shooting down on August 24 of a Chinese civil passenger airplane—belonging to a company 45 per cent American owned—with the loss of most its passengers, brought another sharp protest and warning from Ambassador Grew. The Japanese response de- dared that the attack was justified and that no third power was involved.
As has been expected, Japan since the occupation of North China has almost monopolized its trade, taking over about 70 per cent of its exports and supplying 80 per cent of its imports. But if Japan’s trade with Manchukuo and China is omitted both her export and import trade have declined by more than 50 per cent, during the first five months of 1938, and the excess of imports over exports has created an unfavorable trade balance 48 per cent greater than last year. It is noteworthy that Japanese exports to the United States for this period were only about half as great as in the same months of the year before. War demands, however, have increased American exports to Japan. In 1937 it is figured that the United States supplied about 54 per cent of Japan’s import requirements for prosecution of the China War. But according to David H. Popper, Foreign Policy Report for August 1,
A proposal for crippling Japan’s fighting power by means of a unilateral American embargo on the shipment of items in which this country possesses a more or less complete monopoly— high test aviation fuel, special lubricating oils, special steels and alloys, machine tools and the like—is gaining considerable headway. If public opinion in the United States should be aroused by Japanese excesses and other world events, these measures may be followed by a direct drive for revision of the Neutrality Act which may permit more efficacious governmental action.