One of the few big concerns that has started operations as a result of the Japanese occupation is the Lung Yen Iron Works, near Shihchingshan on the Hun River, about twelve miles to the west of Peiping. But this was already in existence before {he invasion. It was erected as long ago, as the early twenties by certain members of the Anfu Party which was at that time in power, with money borrowed from Japan. After the Anfu party was overthrown, the works which were practically completed were never opened and have stood derelict for nearly fifteen years. 'The Japanese have now put them in working order, and iron ore brought from the Lunyen mines near Suanhuafu' on the Peiping-Kalgan line is smelted there. The output is said, however, to be small and the production not very efficient, because "the machinery is out of date and needs to be completely replaced.
The railways are functioning more or less, though, here again, owing to the shortage of cars and the activi ties of the guerillas, the service i often irregular on some of the lines, and certainly very much more limited than before the invasion. The only line that is running much as it used to is the Peiping-Mukden Railway; the Peiping-Suiyuan line is open along the whole of its length but with a greatly curtailed service; the Tientsin-Pukow line is running as far as Tsinanfu and Hsuchow; and the Peiping-Hankow line as far as Sinsiang in North Honan. But these last two lines are still subject to frequent hold-ups, while there is very little freight movement along them owing to the shortage of rolling-stock. all occupied again. The other day the writer took a walk to Chiehtaissu, a well-known temple in the nearer hills and a favourite spot for picnics, and found everything peaceful and quiet there. But only a few miles beyond, over the first range, it is a different story. There the guerillas are in complete cóntrol, and from all reports life goes on there just as if there had been no Japanese invasion.
Little progress has been made in the task of suppressing the guerilla forces in North China. The so-called Red army which marching from these kills round by the north of Peiping broke into East Hopei in August last still hold about twelve districts, and repeated. attempts of the Japanese from the Peiping Railway have fai ed to dislodge them. Despite the spectacular and much-advertised expedition to Wutaishan which the Japanese claim to have captured, though with heavy losses, the vast mountain quadrilateral bounded by the Peiping-Suiyuan, the Peiping-Hankow and the Shansi Railways, still remains in the complete control of the so-called Red armies. The greater port of Hopei between the Peiping-Hankow and Tientsin-Pukow lines as far as the Yellow River is also in Chinese hands. In northern Honan on the Taoching Railway which runs to.the Peking Syndicate Mines there has been constant and heavy fighting, the guerillas making sudden raids from the mountains of South Shansi and inflicting heavy losses on the Japanese forces.
The greater part of northern Kiangsu including the salt district round Haichow remains in Chinese hands. The situation round Tientsin has got worse in recent weeks, guerilla bands being active in the immediate outskirts of the city. Mongolia, however, is, quite, quiet; and by dint of large reinforcements the Japanese have for the third time regained control of the central plateau of Shansi stegighing southwest of Taiyuanfu. But taking it all in all there is very little, if any, improvement in the pacification of the North.
Text read from the printed page and cleaned; old type leaves the occasional error.