Second Year

The still-undeclared war in China, which Japan once confidently predicted would be a matter of a few months, this week entered its second year, still far from her loudly-announced goal of overthrowing Chinese Generalissimo Chiang Kai-shek's Government.

On the Yellow River front, their drive on Hankow halted, Japanese armies still waited for the flood waters of "China's Sorrow" to subside. South on the Yangtze River, the main naval drive upstream on Hankow received a temporary setback at Matang, where the Chinese had blocked the stream with a boom. Finally, aided by the rising river waters, a few vessels nosed across and at week's end had pushed their way to Pengtseh, some 175 miles from Hankow.

Britain and France, meanwhile, joined in warning Japan to stay off Hainan Island, which Japan might use as a base for an offensive against Canton and South China. Hainan is a Chinese island which lies close to the coast of French Indo-China and uncomfortably close to Britain's strategic sea route between her colonies of Singapore and Hong Kong.

At home, the Government of Premier Prince Fumimaro Konoye was forced to pull Japan's belt a little tighter to cope with the gnawing of war on her financial stomach. It decreed that some 47 types of articles (most important: cotton cloth and iron products), would no longer be produced for Japanese consumption. As soon as present stocks are exhausted, the populace will switch to staple fiber, synthetic materials.

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