STRAIN OF WAR ON JAPAN

Press, Volume LXXV, Issue 22796, 23 August 1939, Page 7

STRAIN OF WAR ON JAPAN

"ABILITY TO CONTINUE FOR SOME TIME” -

SHORTAGE OF FOREIGN EXCHANGE

Although Japan was clearly showing signs of severe economic strain under the burden of the Chinese war, it was wrong to assume that internal collapse was imminent, said Mr 1. F. G. Milner, a former New Zealand Rhodes Scholar, who has lectured extensively on China in the United States, in an address last evening. Mr Milner spoke optimistically of the ability of China •to continue the war to a successful issue, however, saying that the Chinese campaign was far from the popularly accepted idea of guerrilla warfare. “There is a danger of people doing Wishful thinking, to the effect that Japan will crack up economically and that the war wt\\ he ScUlcd by some sort of internal upheaval in Japan,” said Mr Milner. “We ought not to fool ourselves, as the Chinese certainly are not fooling themselves, about the ability of Japan under her totalitarian regime to continue the war on the present scale for some time yet. “Japan clearly shows very severe signs of economic strain, but one should not conclude that this will settle the problem. This would lead to the view that we do not need to do anything. The situation is much more serious than that.” Japan’s foreign trade with the socalled free exchange countries had declined very rapidly since the war began, and she was relying bn her gold reserves for the purchase of essential war materials abroad. But it could not be said that her gold would be exhausted at least till the end of 1940, leaving out the possibility of Britain granting credits. Inflation of Currency

Japan had been forced to restrict severely the importation of raw materials for her export industries, which in turn reacted on her ability to build up foreign exchange needed for the purchase of war materials. Prices had risen severely, and the flotation of huge bond issues—live and a half billion yen this year—was causing serious. inflation, since the Central Bank of Japan was forced to take up 20 per cent, of the issues. Though it was dangerous to conclude that a collapse was imminent, news which slipped past the censorship indicated that Japan was suffering severely. Accidents to workers in factories had increased enormously, through the bringing of untrained workers straight from the land into the factories. One American authority had suggested that there might be a repetition of the rice riots in the event of a bad harvest. A more serious danger to Japan were the divisions and rivalries among the Japanese generals in China, and the deterioration of the morale of the. army In the field. The evidence of reliable witnesses showed the extent of petty rivalries among the army leaders who were competing for shares of the loot.

Of the Chinese campaign. Mr Milner said that the guerrilla warfare was. associated With the Eighth Route Army’s policy of securing the goodwill, of the farmers and' peasants, educating them, training them to bear arms, and organising them into a national unity. The social and military problems Were treated as inseparable. This had been the chief cause of the breakdown of the Japanese attempts to establish puppet regimes, for which they could find neither responsible leaders nor ponular support. As far as reports could be relied on, he said, the Chinese had already

trained 3,000,000 of the soldiersfprthe great atmy intended for'use in a- big push against the invaders. At present pitched battles .were avoided, although orte or two experiments had brought victory; and the immediate aim was to draw the Japanese ever further into the difficult regions of the interior. ', - ......