FIGHT FOR HANKOW

New Zealand Herald, Volume LXXV, Issue 23129, 30 August 1938, Page 11

FIGHT FOR HANKOW

CHINESE CONFIDENT JAPAN MUSTERS FORCES EARLY FALL PREDICTED ADVANCE HAMPERED By Telegraph—Pr»ss Association —Copyright (Received August 30, I.QO a.m.) LONDON, August 20 The Japanese are mustering their forces for a full-strength attack on Hankow to avoid a winter campaign, but are hampered by heat, sickness and the difficult terrain, says a message from Shanghai.

In continuous bombing the railway line has been severed, resulting in Hankow being temporarily isolated. The Chinese, however, believe th.it Hankow will hold out for six months. On the other hand, foreign observers believe it will fall before the middle of November.

The Japanese estimate that 800,000 Chinese are holding Hankow's double line of defences but they lack artillery to deal with Japanese naval guns from the Yangtse. A message from Tokio says the Japanese, converging on Teian, the Chinese base midway between Kiukiang and the Nanchang railway, captured Tungkilling, north of Teian, after stubborn resistance.

As the result of the Japanese attack on a civil passenger aeroplane on Wednesday, the German-Chinese-owned air line has suspended its services from Hongkong to Hankow. The China National Company has already ceased its service.

After a sudden Chinese counteroffensive which extended over a 200mile front, the Japanese have fallen back to the river.

Thirteen thousand women, aged from 17 to 28, are included in the Chinese army on the Yangtse front. The Chinese assert that by the recapture of Tsienshan and Taihu, north of Kiukiang, they crashed through the Japanese centre and threaten An king, the Japanese base for their drive to Hankow. Half a million men are now engaged on the Yangtse front.

JAPAN'S FINANCES

UNDUE STRAIN DENIED

CONSUL-GENERAL'S VIEW STATE OF GOLD RESERVES [BY TELEGRAPH PRESS ASSOCIATION] WELLINGTON, Monday A reply was issued to-day by the Consul-General for Japan, Mr. K. Gunji, to statements in a Press Association cablegram from London that "Japanese finances are subject to an almost unbearable strain" and that "the general belief is that a sharp deterioration in Japan's economic position is likely in the near future." "This is a great exaggeration," Mr. Gunji said. "We admit the fact that Japan's trade will be decreased this year in comparison with that of last year, but one must not omit the fact that the figures for 1937 reached the highest point since trade was opened with foreign countries. Export figures for the half years January to June of 1936, 1937 and 1938, to the nearest million yen, are 1218, 1528 and 1287 respectively.

"I venture to submit that almost every country's trade will be decreased this year owing to the world-wide recession The trade decrease of Japan by boycott is quite negligible, taken in a geneiai assessment. "The cable also mentioned that 'Japan nas lost from 50 to 60 per cent of its gold reserves since the war in China began.' Actual figures will show that the proportion mentioned greatly magnifies the amount of gold reserves exported.

"It may be said that our gold reserve is less than at the time war started, but the major portion of that exported was due to our newlv-estab-lished fund in foreign countries for the purpose of our import trade. Some foreign banks, having refused to give credit to our merchants, the Japanese Government has taken appropriate measures by sending portion of its gold reserves to some important foreign cities.

"In the first half of the .year Japan has the usual unfavourable trade balance, but the contrary is the rule in the last half of the year, and this more than compensates for the unfavourable balance of the first half. So if we indue Japanese trade by the first half year's figures it will be a miscalculation or pure illusion, unjustified by past records."