Pact, Parliament, Planes

The Japanese Press announced with indignation last week that the long fingers of Dr. Hjalmar Horace Greeley Schacht, the German Economics Minister and Reichsbank President, have now dipped into China as well as into the Balkans (TIME, June 29 et seq.). The official Japanese Domei news agency put on its wires that China and Germany have just signed a trade pact with three clauses:

I. If China goes to war with any country except Germany, the Reich will "employ its good offices" to enable China to import munitions.

II. China undertakes to supply Germany with raw stuffs in the event of war.

III. Germany undertakes to supply China with munitions.

In a typical Tokyo official squabble the Japanese Foreign Ministry denied having given this story to Domei, implying that it had been released by the Japanese War

Office. Hitherto Japan and Germany have been so deep in diplomatic cahoots that Russia has openly been arming to resist an East and West "pinching of Communism" between the armed forces of Germany and Japan. Last week, however, the Japanese War Office liked its story of an economic pact by Germany and China behind Japan's back so much that at once in Peiping "reprisals" were taken by Japan's swashbucklers.

Japanese tanks and armored cars escorting Japanese troop detachments rumbled through the main streets and chief business section of Peiping to the famed Forbidden City of the vanished Manchu Emperors. At the gates of the Forbidden City was posted without explanation a heavy Japanese "guard."

Meanwhile 27 U. S. bombing planes, newly purchased by Chinese Generalissimo Chiang Kaishek, were kept thundering over Nanking, his capital, to impress last week's arriving delegates to the so-called Chinese Parliament or Central Executive Committee. This gathering's name, copied from that of the ruling body in Moscow, recalls the days when Generalissimo Chiang fought with the assistance of Communist subsidies. Today Nanking is a modern Capitalist capital and Chiang's bureaucrats keep fit with daily calisthenics dictated by his New Life Movement, appear nattily efficient and most different from the opium-soaked Chinese often found warming seats of power in the provinces.

As it convened, the Chinese Parliament faced challenging demands from South-west China that the Nanking Government gather all its strength and fight Japan as best it can. These demands have been keynoted by the provincial leaders of Kwangsi and Kwangtung, who have even marched their armies into warily rebellious contact with those of Generalissimo Chiang (TIME, June 22). Last week Nanking split the Kwangtung warlords by the usual Chinese financial method. Kwangtung's No. 2 warlord General Yu Han-mou and nine battle planes landed in Nanking. Whereupon Chiang's parliament boldly dissolved the rebellious Kwangtung Government, named General Yu peace preservation chief in Kwangtung and sent him back south to try to take over his job.

This done, Generalissimo Chiang proceeded to take the wind out of the South's irresponsible anti-Japanese yipping with the strongest anti-Japanese blurt of his own he has yet dared. Cried he valiantly: "We are not afraid but we are not willing to be a second Ethiopia. If and when every available political means fails to balk aggressive designs on Chinese territory by a foreign nation [Japan] which aims at ending the existence of the Chinese nation, then it will be time for China to make the supreme sacrifice. Any attempt to force China to sign a paper recognizing Manchukuo would be the signal for war." This was in the nature of an anticlimax, since Chiang had not specifically said that any attempt to carve new Japanese-dominated Manchukuos out of China would also be the signal for war.

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