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Includes: Summary of the events of the year and its effects on Chinese morale, on cooperation between Britain and America and on Japan's economy. Military Events. Extent of Japanese military control, Chinese victory at Taierchwang [Tai'erzhuang]. Fall of Hsuchow and Kaifeng followed by breaching of the Yellow River dykes. Capture of Amoy, bombing operations in the South and the landing in Bias Bay resulting in the capture of Canton [Guangzhou]. Capture of Hankow [Hankou]. Guerrilla fighting replaces positional warfare. Political Events. Japanese policy statement and peace feelers, Wang Ching-wei accepts Japanese offer and is expelled from the Kuomintang. China's Communists. Relations with the Central Government and degree of Soviet support. China and the Western Powers. Dr Wellington Koo appeals to the League, Britain gives a credit to China as does the USA and Belgium, barter agreement with Germany. Economic Conditions. Estimation of losses. Foreign Trade. Customs statistics, nature and provenance of trade, supplies of raw materials to Japan, transfer of industry to the interior. Communications. Building of the Burma Road, railway construction continues, reports on railways in general and the damage suffered, loan servicing ceases, setting up of special committees to watch over the interests of foreign financial interests in railways seized by the Japanese. The Yangtsze. Japanese military refuse to reopen the river to foreign trade despite the reoccupation of Hankow [Hankou] by Japanese businessmen and their resumption of trade, statistics and commentary. The Pearl River. Closure corresponding to the Yangtsze situation. Tsingtao [Qingdao]. Only Japanese and German ships permitted to enter the harbour and use wharves. Others compelled to handle cargo outside, and Japanese monopoly handles all lighterage. Export permits refused unless finance arranged through Japanese Banks. Monopolies. Monopolistic syndicates formed in the Teintsin [Tianjin] area. Japanese Government sets up and subscribes half the capital for a North China Development Company and a Central China Promotion Company for the acceleration of economic development in North China. Affiliated thereto are a North China Telephone and Telegraph Company and a Central China Communications Company. Japanese industrial investments in the Shanghai area and setting up of the Yangtsze River Steamship Company. The Currency. Federal Reserve Bank established in Peking [Beijing] and Teintsin [Tianjin], description of its powers, receives credit from the Bank of Japan, control of China's silver reserves in Peking [Beijing] and Teintsin [Tianjin], new note issue to be on a par with the Yen. China maintains the convertibility of the dollar but has to ration sales of foreign currency, effect on exchange rates. The Currency in North China. Competition between National currency and Federal Reserve Bank notes (FRB). Activities of the Federal Reserve Bank. Incheffo and Tsingtao [Qingdao] [the use of national currency in prohibited, requirement that export documents be covered by an Export exchange certificate endorsed by the F.R. Bank, effect of control and restrictions on North China trade. The Position in Shanghai. Formation of a Chinese Currency Stabilisation Board, success in maintaining the value of the Chinese dollar. The Chinese Customs. Revenue, Foreign and Internal Loan service, narrative and statistics, Japanese proposals for servicing foreign loans ex customs revenue, China objects, integrity of the Customs. The Affairs of Shanghai. High level of industrial activity, report of factories destroyed during the fighting, terrorist and guerrilla activity. Murder of officials of the 'Reformed Government'. Japanese press for larger share in the administration of the settlement, anniversary of the outbreak of Sino-Japanese hostilities, cooperation between the settlement police and the Japanese Gendarmerie. The Whangpoo [Huangpu] Conservancy Board, Japanese participation. Affairs of Teintsin [Tianjin]. Restrictions on the movement of foreigners and prevention of the entry of food supplies to the British and French Concessions, Kidnapping of the Chairman of the British Chamber. Hankow [Hankou]. Evacuation of foreign residents, establishment of a safety zone. Following the departure of all Chinese government officials, the Refugee Zone Committee take over control of the Special Administrative Districts, foreign naval forces land, Chinese appoint W.S .Dupree Director of the Chinese Municipality. Hongkong. Minor incidents on the border, incursion of Chinese refugees, continuing closure of the Pearl River reduces trade. The Past Year in Japan. Continued resistance of China dominates Japanese affairs, Cabinet changes result from dispute between army and Foreign Office regarding the Department of China Affairs, giving Army and Navy control over five ministries. National Mobilisation Act brings industry under control. Resignation of Prince Konoye, growth of totalitarianism. Economic Conditions. Restriction of non-essential imports, and control of raw materials, trade statistics, effects on industry, exports to British Dominions and Colonies. Balance of Payments. Export of gold to balance accounts, Note Issue and specie cover, inflation, the budget and the national debt. Domestic borrowing, costs of the conflict. International Effects of the Sino-Japanese Conflict. Negotiations with Russia on the release of ships and Chinese Eastern Railway payments, fighting at Changkufeng, extent of German and Italian support, demarcation of the disputed frontier. Germany and Italy. Cultural agreement between Germany and Japan, strengthening of the anti-Comintern pact. Great Britain. Anglo-Japanese relations, numerous interferences with British subjects, detention of British ships and the bombing of HMS. Sandpiper, violations of Hongkong territory, exchange of Notes regarding British commercial interests. Representations for the return of British property and of British subjects to Nanking [Nanjing], Japanese Press censorship, the continued closure of the Yangtsze, the Nine Power Treaty. The United States. Protests over the treatment of American nationals, the sequestration of American property, the bombing of universities, an attack on a C.N.A.C. passenger plane, exchange control in Manchuria. Japan, in effect, denies of the applicability of the Nine Power Treaty. New version of the 'Open Door'. American considers the strengthening of its bases in the Pacific, including Guam. France. Effect of the France-Soviet pact and the arms traffic of the French Indo-China border. France refuses to accept a new Ambassador in place of Sugimura. Japan seizes Hainan, violating the French-Chinese Convention and the French Japanese Convention. Work of the Committee. Reference to the Chairman's speech at the forthcoming Annual General Meeting. Attempts to persuade HM Government. to adopt a more positive policy. Representations of the China Liaison Committee and the London Chamber of Commerce. Contact with the British Residents Association. London Chamber of Commerce, China Section. Formation. Chinese Apprenticeships. Continuation of the scheme by the F.B.I. and the Association. Report on the progress of the past five years. Relief of Distress in China. Activities of the Lord Mayor's Fund. Universities China Committee. Activities, new premises. Appendix. Japan's Aims in China. Text of British Note Extra-Territoriality.
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