WAR IN CHINA: Money and Meaning

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Fortnight ago the U. S. Export-Import Bank granted China $25,000,000 worth of credit for the purchase of American agricultural implements and machinery. Prompt use of this credit was made last week when China purchased 1,000 trucks from Chrysler and General Motors which could be used to carry Russian supplies over her new motor road from Siberia.

In Tokyo, sleepy-eyed Japanese Foreign Minister Hachiro Arita meanwhile had told foreign correspondents that this extension of credit was a "regrettable act," and, if a political gesture against Japan, "most dangerous." Summoned to meet at Peking last week were the heads of the puppet Governments of Peking and Nanking and the "provisional" Governments of Hankow and Canton. One of the purposes of the meeting was to teach the puppets a politico-economic trick that has already been successfully employed by Japan in Manchukuo. Japan would formulate, the puppets promulgate, trade rules discriminating against other nations. Thus Japan will be able to pretend that she has not slammed the open door in China.

Ignoring Arita's veiled threat, the U. S. Treasury Department announced last week the indefinite extension of an arrangement with China which permits China, when caught short of cash between her monthly shipments of silver to the U. S., to make and pay for purchases in this country by borrowing from the Treasury's $2,000,000,000 Stabilization Fund on the security of Chinese gold held in U. S. banks (estimated to be somewhere around $110,000,000). When China's next shipment of silver arrives in the U. S., she sells it to the Treasury, and with the dollars thus obtained, repays the loan to the Stabilization Fund.

This news, coupled with the report that Britain would advance China $2,500,000, gave the Japanese pause. Since the war began Japan has dreaded more than anything else the possibility of united economic pressure from the U. S. and Great Britain. Premier Prince Fumimaro Konoye hastily issued a long awaited statement on Japan's final aims in China. The statement, unusually moderate in phraseology where outside nations were concerned, was virtually an outline of Japan's peace terms. Premier Prince Konoye blandly announced that Japan sought no territory (that could be left to her puppets), no indemnity (that probably could not be collected from scorched China), no economic monopoly in China, was willing to respect the interests of third powers who "grasp the meaning of the New Asia."