TABLE OF CONTENTS

                                                            Page No.
Chapter IV  Third Year of the China Incident (1939)              44

            Operations against China during 1939                 45

               General Outline of Operations                     45

               Hainan Island Operation (10 February 1939)        46

            Nomonhan Incident (May - August 1939)                47

            Political Relations with China during                49
            the Third Year of the China Incident

            Policy for Readjusting Sino-Japanese Relationship    49

               Japan's Political Moves for the Estab-            51
               lishment of the Wang Ching-wei Regime
               (New Central Government)

            Abrogation of the American-Japanese                  53
            Commerce Navigation Treaty (26 July 1939)

CHAPTER IV

Third year of the China Incident (1939)

 
 4 January:   Konoye Cabinet resigned en bloc.

 5 January:   Hiranuma Cabinet formed.

16 January:   Manchukuo joined the anti-Commintern Pact.

21 January:   League of Nations adopted a resolution to support
              Chiang Kai-shek.

10 February:  Japanese Army and Navy units occupied Hainan Island.

12 February:  Naval air force bombed Lanchou. (Repeated on 20 and 23   
              February)

25 February:  Operation against Haichou started. (February - March)

 4 March:     Japanese forces occupied Haichou.

15 March:     Czechoslovakia became a German protectorate.

27 March:     Japanese forces occupied Nan-Chang.

              Spain joined the anti-Commintern Pact.

 5 April:     Italy invaded Albania.

 8 April:     Naval air force bombed Kunming.

16 May:       Levee works on Yellow River completed.

26 May:       Japanese and Soviet army units clashed at Nomonhan.
              (Battle continued until July. Cease-fire agreement reached 
              on 16 September).

31 May:       Amoy captured.

14 June:      British and French concession in Tientsin blockaded.

21 June:      Swatow captured.

 2 July:      General offensive in Nomonhan area started.

 8 July:      Decree for conscription of civilian technicians issued by 
              Japanese Government.

15 July:      Japan and Britain held parley in Tokyo. Talks broke
              down on 20 August.

26 July:      US suddenly notified Japan of the abrogation of the
              US-Japan Treaty of Commerce and Navigation.

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16 August:    Aid-to-Chiang route through Hongkong severed.

21 August:    Russo-German Non-Aggression Pact concluded. Signed on 
              23 August.

28 August:    Hiranuma Cabinet resigned en bloc.

30 August:    Abe Cabinet formed.

31 August:    British-German talks broke-down.

 1 September: Germany began invasion of Poland; World War II began.

 3 September: Britain and France declared war on Germany.

 4 September: Japanese Government issued statement of non-intervention 
              in the war in Europe.

 4 November:  US repealed Arms Embargo Act.

15 November:  Operation against Nanning started. Japanese forces land at 
              Gulf of Tonkin.

24 November:  Japanese forces occupied Nanning.

30 November:  Soviet-Finnish war began.

14 December:  League of Nations ousted the Soviet Union. 

21 December:  Japanese forces began new operations on the French
              Indo-China border.

Operations against China during 1939

General outline of operations

Operations during 1939 were not conducted on as extensive a scale as those of the preceding year. Japanese forces shifted to the defensive through their mopping-up and blockading operations at various places and devoted themselves to peace preservation and reconstruction works. They also gradually extended their line of blockade against Chiang Kai-shek southward, further increasing friction with the British and the French. The Chiang regime, on the other hand, announced such counteroffensives as the April offensive, the September offensive and the Great Winter offensive, but all these operations were contained in the early stage by Japanese forces.

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Chinese military strength at the beginning of the war was said to total 195 divisions comprising some 2,000,000 troops. However, subsequent successive defeats reduced the strength by approximately one half. With their arms reduced by one-half, the Chinese tried in vain to obtain munitions supplies. In particular, after the loss of Canton, the Canton-Hankow railway stopped functioning and shipment of material from abroad depended upon the French Indo-China route, Burma route and the northern Red route. Only a trickle moved through. The only other supplies were those sneaked through the blockade lines of the Japanese Navy.

Hainan Island Operation (10 February 1939)

The capture of Hainan Island was an operation conducted mainly by naval forces (including special naval landing forces) and supported by army forces.

Hainan Island lies midway between French Indo-China and Hongkong, occupying a position south of the Leichou Peninsula across the Strait of Hainan, It is also near Kwangchowan, a French-leased territory. It is a large island, having a population of 2,200,000. The island was guarded by the 152nd Division, approximately 25,000 strong, under the command of Yu Han-mou, who was in charge of peace preservation in Kwangtung Province.

The Japanese Navy, after the capture of Canton the previous year, had maintained a formidable blockade all along the coast of south, central and north China. However, loopholes were found in the southern end of the blockade line, examples being the supply route to Chiang Kai-shek with Hongkong and Northern trench Indo-China as relay points and the direct routes though Hainan Island and Kwangchowan areas. Because of these loopholes, as well as the necessity to conduct air operations deep into the interior as far as the Kunming area, the Navy came to feel the necessity for establishing air bases on Hainan Island. The Central Authorities of the Navy advocated this

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move. Operations were carried out by the special naval land combat units with Army elements supporting them.

Escorting a convoy, the South China Naval Force (Fifth Fleet) commanded by Vice Admiral Kondo Nobutake, entered and anchored in Tsinghai Bay on the northern shore of Hainan Island at midnight on 9 February 1939 and carried out a successful landing. In addition, Navy land combat units effected a landing at Haihow at 1200 on 10 February. Thereafter, the Army and Navy forces acted in concert to mop up the northern zone, On 11 February the land combat units landed at Samah at the southern extremity of Hainan Island and occupied the key positions of Yulin and Yai-Hsien. Thereafter, the units engaged in the occupation and subjugation of the entire island.

Later, Hainan Island became a naval administrative district with Hainan Guard District Headquarters established at Samah. Strategically, the island was built as a forward air base as well as an advance base for blockading Chiang. At the same time, the iron and copper resources of the island were exploited.

Nomonham Incident (May - August 1939)

Although this incident had no relation to the China Incident, it developed from a small clash between Manchurian and Outer Mongolian troops. in an area where the Manchurian-Mongolian border was obscure. Later it expanded into a sizable conflict between Japanese and Soviet armed forces. It involved about four months of land and air engagement, and terminated without developing into an open war between Japan and the USSR. In view of the singularity of the incident, a brief account of it is given below:

The independence which Manchukuo gained in 1932 brought about drastic changes in existing administrative boundaries, thus giving rise to the issue of the border between Manchuria and Mongolia. Although talks for demarcation were begun at the time of the Khalka-Miao Incident in 1935, the talks were fruitless and the actual demar-

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cation line was left unsettled. The incident in question began on 11 May 1939 when a small unit of Outer Mongolian troops crossed the Khalka River and suddenly attacked a Manchurian observation post. Approximately a regiment of Manchurian troops fought back, and a series of skirmishes ensued. Gradually, the Outer Mongolian troops were replaced by Soviet troops. Part of the Kwangtung Army took part in these engagements after 14 May. In addition to engagements by ground forces, there were several encounters between units of the Red Air Force and air units of the Japanese Army up to 1 June, when the Japanese forces returned to their original station. The incident appeared to have come to a close. However, about 18 June, a Red mechanized force, having 70 guns, 26 AA guns, 860 vehicles and 140 tanks, together with two Outer Mongolian cavalry divisions and several dozen aircraft, again attacked us. Intent upon the capture of Moro Hill and the Khorsten River, both sides gradually increased their strength and the battles continued throughout July. On 20 August, the Soviet forces launched a heavy counterattack. Soviet forces had some 45,000 troops, equipped with approximately 350 tanks, 340 armored cars, 210 heavy field guns and 200 aircraft. The Japanese, unaccustomed to large-scale tank combat, were inferior both in equipment and in strength and suffered approximately 17,000 to 18,000 casualties with a loss of about 100 aircraft. At the same time, however, the Soviet forces seemed to have suffered considerable losses. Major and minor counterattacks occurred thereafter but the situation returned to normal about the early part of September. Diplomatic negotiations were begun and the conflict was settled with the conclusion of a cease-fire agreement on 15 September.

Although it is not clear with what intention the Soviets waged the conflict, it is judged that, as in the case of the Changkufeng Incident and the Changlingtsu Incident, the Soviet action was a demonstration of force, in line with the policy of using force to frustrate

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the least development of Japanese confidence in her strength. It is clear that Japan had no reason to start the incident. She was deeply involved, in the China Incident, and it was to her disadvantage to send any part of her strength to the northern region.

From this incident, the Japanese Army learned that there were serious shortcomings in its armored units as well as in its tactics. Strenuous efforts were made thereafter to remodel equipment and build up tanks and fire power.

Political Relations with China during the Third Year of the China Incident

On January 1939, immediately after the formation of the Hiranuma Cabinet, the "Policy for Readjusting the Sino-Japanese Relationship" was decided upon at an Imperial Conference. As is seen from the following, this policy was noteworthy in that it contained the framework of a ideal for "establishing a new order in East Asia," although it left unchanged the policy of "establishing neighborly and friendly relationships between Japan, Manchukuo and China."

Policy for Readjusting Sino-Japanese Relationship

Japan, Manchukuo and China will unite as good neighbors under the ideal of establishing a new order in East Asia and will work for the common aim of forming an axis for peace in the Orient.

1. Establishment of the principles of general cooperation, will include good neighborliness and friendship, and cooperation in the defense against communism as well as cooperation in the economy of Japan, Manchukuo and China.

2. Creation in North China and the Mengkiang area of zones of solid Sino-Japanese unification in national defense and economy. Establishment of special military and political positions in the Mengkiang area for anti-Communist defense.

3. Establishment of an area of solid Sino-Japanese economic unification in the lower reaches of the Yangtze River.

4. Establishment of special positions on specific islands lying near the coast of South China.

Essentials for readjusting Sino-Japanese relationship were:

1. China will recognize the Empire of Manchukuo while

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Japan and Manchukuo will respect the territorial integrity and sovereignty of China.

2. Japan, Manchukuo and China will eliminate such measures and causes as are detrimental to their friendship.

3. The administration of the new China will be based on the policy of decentralization and cooperation. Shanghai, Tsingtao and Amoy will be special administrative areas.

4. With the development of neighborly relations between Japan, Manchukuo and China, Japan will consider gradual restitution of concessions and extraterritoriality.

5. An anti-Communist military alliance will be concluded between Japan and China.

6. Japan and China will jointly exercise defense against communism. For this purpose Japan will station the necessary troops in strategic areas in North China and the Mengkiang area.

7. Japanese troops will be withdrawn as soon as the overall and local situations permit. However, some naval forces will be retained at specific points along the Yangtze River and on specific islands off the coast of South China for the maintenance of peace and order. Free navigation and anchorage for Japanese ships on the Yangtze and along the coast of China will be permitted.

(Matters relating to policies for economic cooperation omitted)

Supplement

1. China will pay reparations for damages sustained by Japanese nationals in China to their rights and interests since the outbreak of the Incident.

2. Economic activities or rights and interests maintained in China by a third power will be restricted only when such restrictions are deemed necessary for national defense and existence. However, there is no intention of exercising unjust discrimination.

The above national policy toward China was maintained without substantial modifications after its formulation. However, since in the final analysis it was a policy unilaterally imposed by Japan, it failed to win the support of the majority of the Chinese populace. Thus, it failed to achieve the goal of having China trust Japan or of converting it to the idea of coprosperity between Japan, Manchukuo and China. The reason for this failure was that the Chinese people, regardless of class, were possessed with the idea that Manchukuo was, in fact, only a nominally independent state controlled by Japanese

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occupation forces, and that the so-called solidly united anti-Communist zone in North China was actually an area invaded by Japan. There was in fact no change in the prevailing view that Japan could not be trusted.

Japan's political moves for the establishment of the Wang Ching-wei regime (new Central Government)

After the Japanese forces captured Nanking, Hankow and Canton in 1938, Wang Ching-wei, the vice-president of the Nationalist Party of China at the time, began to advocate peace with Japan. However, the Chinese Government would not adopt his ideas and he finally broke with Chiang Kai-shek. On 20 December 1938 he fled from Chungking in strict secrecy. He arrived in Hanoi, French Indo-China and issued a telegraphic statement on 29 December advocating peace with Japan based on an anti-Communist policy. Thus, Wang steadily pushed peace plans in Hanoi while such people as Mei Ssuping and Lin Posheng made preparations in Shanghai and Hongkong. He left Hanoi on 25 April, and arrived in Shanghai on 8 May. He then secretly crossed to Japan with Chou Fu-hai, Mei Ssuping and others on 20 May and conferred with Prime Minister Hiranuma, War Minister Itagaki and others concerning the establishment of a new government and its fundamental relations with Japan. 0n 13 June he left Japan and returned by way of Peiping to Shanghai where he conferred with Liang Hung-chih, head of the reformed government, on the establishment of a new central government. Japanese who took part in these activities include Col. Sadaaki Kagesa and Col. Nakao Yahagi of the Army, Capt. Hikojiro Suga of the Navy, Kinzo Shimizu and Masaki Yano of the Foreign Office, as well as Ken Inukai and Hiroshi Hata civilians.

Thus, preparations for establishing a pro-Japanese Central Government progressed favorably. On 28 August the Wang faction held the Sixth National Convention in Shanghai, and, on 5 September, Wang met Liang in Nanking. When the attitude of the Japanese Government toward the scheme had been determined, Wang Chao-ming, Wang Keh-min

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and Liang Hung-chih held another meeting at Tsingtao for three days from 24 January 1940. At this conference the concrete policies and structure of the Central Government were determined.

On 31 March 1940, Wang established his regime in Nanking under the pretext of reorganizing the government and restoring the capital city. Simultaneously, the provisional and reformed governments were abolished. Among the leading figures in the new government were Wang Chao-ming (Ching-wei), Action President of the Executive Yuan, Chen Kung-po, President of the Legislative Yuan, Chou Fu-hai, Finance Minister, Chu Min-i, Foreign Minister, Chen Chun, Interior Minister, and Lin Po-shen, Propaganda Minister. Thereupon, the Japanese Government appointed Gen. Nobuyuki Abe, former Prime Minister, as Envoy Extraordinary and Ambassador Plenipotentiary to the regime. In July, negotiation were commenced in Nanking between Wang and Abe for the readjustment of diplomatic relations between Japan and China. These negotiations resulted in the formal signing of an agreement on 30 November. The treaty aimed mainly at establishing good neighborly relations and friendship and Joint defense and economic cooperation, but it also stressed the special nature of the North China and Nengkiang areas. (See Appendix 13)

The Japanese Government agreed in the main with China's requests, but they differed on the following points:

1. The Japanese Government agreed that it would not be wise to appoint political advisors or Japanese officials to the Central Government. However, in the zones where Japanese and Chinese people were closely allied and also in other specified districts, it considered that it would be to the advantage of both sides to appoint Japanese advisors and officials.

2. Military advisors would not include third power nationals. It was necessary, however, for some particular military units to accept Japanese military experts to deal with matters of military

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cooperation between Japan and China.

3. The Japanese Government hoped that the day would come soon when the situation would allow Japanese forces to lift the restrictions on the Yangtze area, at least partially, if not totally. However, under the present circumstances, it was impossible to indicate exactly when this would be done.

Wang agreed to such items as the recognition of Manchukuo, the creation of special anti-Communist zones, and anti-Communist joint defense. Nevertheless, he strongly advocated a policy of respecting the autonomy, independence and sovereignty of China. In response, the Japanese Government exerted its utmost efforts to help Wang's regime develop as the Central Government. Thus, in June 1940, about eighteen months after Wang's flight from Chungking, the Japanese Government concluded a treaty with the new Central Government.

Abrogation of the American-Japanese Commerce Navigation Treaty (26 July 1939)

The abrogation of the United States-Japanese Treaty of Commerce and Navigation by the United States served as a warning to Japan. The step was taken as a result of the Japanese ignoring repeated protests made by the United States against arbitrary acts of Japan, such as the handling of the Manchuria situation, actions during the China Incident and the blockade of Tientsin concessions. The abrogation had a grave influence on Japan. It was the first step in the alienation of the two countries.

On the afternoon of 26 July 1939, Assistant Secretary of State Sayre handed Councilor Suma a note announcing the abrogation of the 1911 United States-Japanese Treaty of Commerce and Navigation. This note was from Secretary Hull to Japanese Ambassador Horiuchi and stated:

For the past several years the United States Government has been examining existing treaties of commerce and navigation concluded between the United States and other nations in order to ascertain what changes should be made in order that such treaties

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will better serve the purposes for which they were concluded. During the examination, the United States Government has reached the conclusion that the United States-Japanese Treaty of Commerce and Navigation signed in Washington on 21 February 1911 includes articles requiring renewed consideration. In order to prepare for such consideration and to further guarantee and promote the interests of the United States as the new situation requires, the United States Government, in accordance with procedures set forth in Article 17 of said treaty, hereby serves notification of its intention that said treaty be terminated. Through this notification your government should expect that said treaty, together with the protocol attached to it, will expire with the completion of a six months' period beginning this day.

In response to this, the Japanese Foreign Office on 27 July issued the following statement:

Since the recent formal notification was made abruptly and the reasons given were too brief, it is impossible to ascertain the intention behind the action.

If there are any reasons for the United States to abrogate the treaty, those same reasons must simultaneously constitute grounds for revision of the treaty. However, it is not made clear why such a drastic step should be taken suddenly.

The United States Government has explained that the notification has no connection with Mr. Vandenberg's proposal made during the discussion in the United States Senate Foreign Relations committee on abrogation of such treaties of commerce and navigation. However, since the action was timed with the Tientsin negotiations currently progressing between Japan and Britain, there is a great danger that people will attach considerable political significance to this action.

A new situation is now developing with remarkable rapidity in the Far East. It has been the expressed desire of the Japanese Government that the world take a realistic view of this fact instead of shutting its eyes to it. Should the United States Government be desirous of concluding a new treaty consonant with the new situation in the Far East, the Japanese Government will be happy to respond to overtures.

The following is the background behind the action taken by the United States: At the opening of Congress that year, President Roosevelt in his State of the Union message recommended a revision of the Neutral Act. However, the Senate Foreign Relations Committee, after prolonged debate, on 11 July, voted to postpone deliberation on the Neutrality Act until the January session of the following year. Revision of the Neutrality Act was advocated on the following grounds: In the event of an outbreak of a mayor war in Europe, such a revision would enable Britain and France, by virtue of their superior sea power, to maintain command of the sea,

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and thereby secure communications routes between Europe and America for the shipment of military supplies from the United States. At the same time, however, such revision would be of advantage to Japan and disadvantage to China as far as the China Incident was concerned. Consequently, it was assumed in connection with the proposed revision of the Neutrality Act that some provisions would be made to off-set this advantage to Japan. As was expected, on 15 July, Chairman Pittman of the Foreign Relations Committee submitted an Embargo Bill calling for the embargo of munitions to countries violating the Nine Power Pact. On 18 July, a proposal calling for the abrogation of the United States-Japanese Treaty of Commerce and Navigation was made by Mr. Vandenberg. Article 5 of the United States-Japanese Treaty of Commerce and Navigation stipulated that neither of the signatory powers might prohibit the export of items to the other unless such items were expressly forbidden to be exported to any other country. Since the Pittman proposal was an evident violation of this provision, Mr. Vandenberg offered the resolution which, if adopted, would call on the Government to issue a notification of the abrogation of the existing treaty as a means of protecting the rights and interests of the United States under the new circumstances, as well as providing a background for negotiating a new treaty with Japan, This Vandenberg proposal met with considerable objections from various quarters, and, on 26 July, debate upon the measure was postponed. On the same afternoon, the State Department issued the surprise notice of abrogation to Japan.

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