Tokyo, July 31.
Indications that Japan' has not} abandoned hopes for a peaceful settloment with China were given by. Government leaders in speeches today in Parliament, "I have still not abandoned hope for a peaceful settlement," doctored the Prime Minister, Prince Fumimaro Konoye, "but I'am prepared against the worst."
Mr. Koki Hirota, the Foreign Minister, said that Japan's policy was for a settlement on the spot and non-aggravation. Possibly, he declared, ]would not work smoothly unless China reconsidered her attitude. In such an eventuality, he added, the Government would pursue a different polley.
The War Minister, General Gen Sugiyama, said that the supplementary, budget bill, calling for an appropriation of about 97,000,000 yen, which was approved by the Diet, was complied under & policy of a settlement on the pot and non-aggravation, but since the situation in North China had witnessed a sudden change, another supplementary budget would be. expenditure, introduced to cover the necessary
Japanese garrison troops in North "China, the War Minister asserted, had been "endeavouring to effect a' peaceful settlement on the spot with patience and self-restraint, but now things have come to such a pass that a fundamental solution of the Issue must possibly be sought through the use of armed force."
Admiral Yonai, the Navy Minister, stated in the House of Peers that the Third Squadron, in ce-operation with the naval force at Port Arthur, was Patrolling the China coast and the Yangtze River, while part of the squadron was ce-operating with the Another had been ordered to stand by for an, emergency.
"He drew attention to the recrudesconce of anti-Japanese agitation in Shantung and central and south China, and added that the "Japanese squadron is trying hard to prevent the North China incident spreading. and also the outbreak of a fresh,
Text read from the printed page and cleaned; old type leaves the occasional error.