Government to grant China a '$20,000,000, wheat loan has caused keen disappointment among officials of the Chiang Kat-shek administration, cording to trustworthy reports received in official quarters here today.
"The American Secretary of the 'Treasury, Mr, Henry Morgenthau, is reported. to have Tefected' the Nationalist Goverment's request made recent ly though Dr. C, 'T. Wang, Ambassador in Washington.
Coming soon after the British Government's. rejection of a money loan to China, the American refusal caused gloom in Hankow and Chungking, the reports stated.
After consulting Secretary of State, Mr. Cordell Hull, the American Secretary of the Treasury refused the Nationalist request, the reports stated on the grounds that granting of the wheat loan while hostilities are going on would "com plicate the situation by exciting public feeling."—Domel. land Anking, so that China's problem fof supply would also be increased by stich a catastrophe, Roughly speaking, major floods on the Yangtze would still allow of operations against Hankow from any direction round the compass are from northwest to southeast. South of lEfankow the railway to Changsha was. only slightly damaged: in 1931, and that was the most disastrous flood jover recorded.
Strain on Invaders If it is remembered that China is faiming at the exhaustion of Japan, it [will be realized that all is not lost leven if Hankow falls, since Changsha the limit beyond which Japan will hardly dare to push her armies. By the casual tourist in China it is rarely realized how much of that vast country is mountainous and inaccessible, Only 29 per cent. of China is Jeapable of cultivation, and this perlcontage includes the vast granary of /Manchoukuo, as well as the rice fields which, in the valleys, are stepped up mountain sides which would be the [despair of any tank commander.
Tt is patent that Japan's military occupation of much of level China still leaves 80 per cent. of the total tarea in Chinese hands. The portion far brought under Japanese ocfeupation is ringed with mountains, from whence guerrilla bands can sally, as already they have done in the north. Here, both before and since the floods guerrilla excursions have harassed the garrisons.
Japan will have to guard and patrol every yard of China that is important 10 her.. Every mile she penetrates will add to the commitments she must make to keep the conquered countryside safe for the trade that is vital to her. Her occupation of Manchuria has given her a foretaste of what her prepa quire an enormous garrison to pro-feet her puppet governments, whose weir will run only so far as a rifle lean carry beyond the post that fires It. Japan may win the war in China and still have the risk of losing the peace.
Tt is pertinent to ask how China can hold out with the bulk of her ports and railways in Japanese hands. As long as the railway from Hongkong is open to her she can import fas much material as she can secure from abroad. Her balances of silver in foreign hands can still last a few! months, while she is obtaining supplies on credit from Europe. and French Indo-China over) which 'Chinese roads" ere - nol. built' 4 heavy. tref even'~ if '-mechanieal transport was available in sufflelent Quantity. "Supplies from the, Russian Turkish railway have been "arriving over the 2,000-mile road from Central Asia, but fo organize thie dimeult and desert route for.. trae to: supply] 2,000,000. men is a colossal task be~ yond, the powers of China.
China's Munitions Wher it {s understood that in peace time China has to import all: her all land. 16 per cent. of her foodstuffs it will be realized that indifferent moun-Tain, roads: cannot solve the problem of ier war-time military trahsporiaion.
'But tucked: away inthe more inaccessible, parts of. Kwangsi and 'Szechuen "provinces are sufficient arsenal machines to'. supply. China with infantry. wespoiis and. ammuni-ion, "By splitting her~ armies into small bands who can live on the country, China can "copy her Red Army, which defied annihilation for ten years, and is now a growing thorn in the side of the Japanese in North [China Thus,. if" Hankow. falls. one can still believe in Gen:. Chiang Kai: shek's courageous words and feel the Chinese will enter a new war period. when new tactics will be tried on the: foe, whose modern military equipment will no: longer completely outweigh China's numeri= cal_ superiority.
Gen, Chiang. Kai-shek's plea for Sanctions against Japan is natural enough, but if. granted, it would have Little effect: oni the outcome "of, the war. -Russlan. experts consider. that Japan holds a two years' supply of fall; warlike essentials for a major war, The future trend of hostilities, in China will not reduce. this stod {to an appreciable extent, and, indeed, some economists friendly to' China might paradoxically advocate even, more excessive war supplies to Japan, for this would increase her adverse trade balance to the detriment of her economic situation.
Cost t6 Japan Tt is Japan's economic dimeculties lone that will cause her to abandon, her aims and gains in China. There is a point below which Japan dare not let her economic barometer sink unless she wishes to relinquish her position as, the strongest military power in the East. She had hoped {for a quick victory in China, when her economic and strategic position in the Pacific would have. been bet tered. But, the war has lasted one year, and her estimated expenditure For 1938-39 has-reached the. aston mical figure of ¥.12,000,000,000 of which roughly half will be met by 'a bond issue, Her supplies of commercial raw material for non-warlike industry have sunk to a very low level and need replenishment.
'The Generalissimo knows that time on his side; that is why he insists that. China's' resistance to Japan jean not be measured in terms of months or years.
Text read from the printed page and cleaned; old type leaves the occasional error.