It is possible to be more hopeful of a peaceful local settlement of the latest Sino-Japanese clash. Ominous signs which might well be marshalled to justify the worst fears have been set off by the steadiness of the markets, Volubility once again has been reassure ing despite its dangerous tendency to exacerbate feeling. There has been much argument on both sides to prove or disprove premeditation. In truth the issue is academic. Whether the Japanese forces were sent on manoeuvres near Marco Polo Bridge to create an incident is unimportant. The moment the incident arose the fundamental significance of Japan's ability to dictate terms became the really vital factor in the situation. China Las officially cited the Nine-Power Pact in evidence of her wrongs. The move is technically justified but it can be met by technical objections to support the same inaction as marked the attitude of the signatories toward the virtual annexation of Manchuria, including Jehol, and the inroad of Japanese armed force into East Hopei and North China generally. So long as the terms of the Hi Umetsu agreement are secret it is impossible for the other Powe: io resist the contention that by her own action, under the pressure of force majeure no doubt, China has acquiesced in a substantial breach of the Pact, leaving Manchuria out of account, Senator Pittman has jumped in at once to defend his country from any responsibility by alleging that in 1931 Great Britain failed to cooperate effectively with the United States of America in stopping Japanese aggression in Manchuria. His allegations receive some colour from the uncertainty of Sir John Simon's attitude at that time, but, on the whole, Colonel Stimson's authoritative disclosures have shown that the United States was then prepared only to join in moral pressure" and nothing more. In any case the real issue is what is happening in 1937, not what might have happened in 1931. China has not at present invoked the Nine-Power Pact any more than she did in 1931; she has only cited it She evidently is convinced therefore that the present crisis must be determined as between herself and Japan direct, although it is perment for both parties to consider the light in which the signatories of the Pact may regard whatever settlement is reached.
Japan is thought to be disposed io a less "positive" line of action than recent statements seemed to warrant. She has r She has not had a good ", judging irom comments on all sides. She is in a difficult position because, materially, there is little real limit to her action. She has, however, to bear in mind that the very ease with which she can enforce demands, such as the cutting off of Hopei from but the barest sem-blanco of control by the Central Government at Nanking, may, ultimately, tell against her. The restraint which has been shown by the Chinese Government is matched by a remarkable absence of violent declarations from political opinion which in the past has been apt aggressively to assume the róle of mentor to Nanking. Japan herself has set in train certain military preparations. She [can hardly be surprised if the Chinese authorities feel impelled to go through similar motions, albeit with an agile eye on the terms of the Ho-Umetsu agreement. General Chiang Kai-shek has been reticent. It is possible that he—and his colleagues—take the view that they are not going to prejudice the undoubted improvements effected in the national defences by putting them to a test which would inevitably destroy the cohesion so far achieved. They might be prepared to acquiesce in, without specifically endorsing, a local settlement which dangerously weakened their still precarious control in the North, because thereby they would maintain the fabric of the national defence and continue to strengthen it against such time as would enable them more effactively to counter subsequent attempts in extending Japanese aggression, This policy, admittedly, might be dificult to justify to the newly-stirred national sentiment which they have been able to consolidate, but there, are grounds for believing that, for the first time, that sentiment rests on a firm confidence in the Central Government's judgment of the whole situation and has powers of restraint which, despite the immediate consequences of inaction, may prove to be more formidable in the long run.
If that is a correct reading of the situation Japan has every reason for caution. Too ready acceptance of the opportunities which seem so attractive to the Kwantung Army is likely to involve Japanese policy in commitments the extent, cost and end of which cannot be foreseen, It'is just as if the Central Government at Nanking were acting like a guerrilla force in luring the well-equipped and overwhelmingly superior armies of Japan to advance confidently into apparently unresisting territory only to find that more responsibilities had been shouldered without actually settling anything. Liabilities, menacing and incalculable, would develop on all sides and, as the months passed, the prospect of liquidating them would create greater anxieties in relation not only to Japan's contacts with China but*probably also to her future standing with other Powers whose freedom to assert their views may be expected to increase as their present preoccupations diminish. At the moment, too, Japan is unlikely to desire an addition to the complications of her domestic problems. She might be more pleased if China were inclined to intensify the provocation which the recent clash would generate. China apparently, being wise enough io refuse that excuse for forceful action from Japan. Even if it be accepted that there is ground for demanding some sort of reparation for the Marco Polo Bridge affair and China's evident weakness encourages a generous estimate of the requirements of the case, Japan may come to the conclusion that moderation is her bet card. It puts the least difficulty in the way of resuming approach to the rear basis of Sino-Japanese ce-operation. Japan wants to reconcile the differences of view at present blocking that approach; her own desire for economics to be considered before political issues are determined is opposed by China's clear conviction that the economic cart cannot come before the political horse. Diplomacy can solve that enigma; military force cannot. China on ner side should realize that it is dangerous to paint too glowingly the undoubted advances made in her national organization. Inattention to that point may conceivably have prompted actions which have all foo clearly exposed the still vulnerable condition of a nation during a transitional period of development. That, again, is where diplomacy and not sabre-rattling may best exercise its influence.
Text read from the printed page and cleaned; old type leaves the occasional error.