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President Roosevelt, on January 8, 1937, announced that he had directed the Navy Department to proceed with the construction of two replacement battleships. This was the first battleship construction to be undertaken by the United States since the Washington Naval Treaty of 1922. ()

Throughout this period the United States Army was proceeding with an expansion program which increased its enlisted strength from 118,000 in 1935 to 158,000 in 1937. Notwithstanding this increase, the Secretary of War said in his annual report of 1937 that the Army was not keeping pace with the enormous expansions in the military establishments of other leading powers and recommended that it be further strengthened.


Marco Polo Bridge Incident

On July 7, 1937 a clash occurred between Chinese and Japanese troops near Peiping in North China. When this clash was followed by indications of intensified military activity on the part of Japan, Secretary of State Hull urged upon the Japanese Government a policy of self-restraint. In a conversation of July 12 with Japanese Ambassador Saito, Secretary Hull elaborated upon the futility of war and its awful consequences, emphasizing the great injury to the victor as well as to the vanquished in case of war. He said that a first-class power like Japan not only could afford to exercise general self-restraint but that in the long run it was far better that this should characterize the attitude and policy of the Japanese Government; that he had been looking forward to an early period when Japan and the United States would have opportunity for world leadership with a constructive program like that proclaimed by the American republics at Buenos Aires in December 1936 for the purpose of restoring and preserving stable conditions of business and of peace. ()

Secretary Hull's Statement of Principles

On July 16, 1937, a few days after the beginning of Japan's undeclared war on China, Secretary Hull issued a statement of fundamental principles of international policy. The Secretary stated that any situation in which armed hostilities were in progress or were threatened was a situation wherein rights and interests of all nations either were or might be seriously affected. Therefore, he felt it a duty to make a statement of this Government's position in regard to international problems and situations with respect to which this country felt deep concern. He said that the following principles were advocated by the United States: maintenance of peace; national and international self-restraint; abstinence from use of force in pursuit of policy; abstinence from interference in the internal affairs of other nations; adjustment of problems in international relations by processes of peaceful negotiation and agreement; faithful observance of international agreements; modification of provisions of treaties, when need therefor arises, by orderly processes carried out

in a spirit of mutual helpfulness and accommodation; respect by all nations for the rights of others and performance by all nations of established obligations; revitalization and strengthening of international law; promotion of economic security and stability the world over; lowering or removing of excessive barriers of international trade; effective equality of commercial opportunity and application of the principle of equality of treatment; and limitation and reduction of armament. The Secretary stated that the United States avoided entering into alliances or entangling commitments but believed in cooperative effort by peaceful and practical means in support of the above-stated principles. ( )

This statement of fundamental principles of international policy was sent to the other governments of the world for comment. The reply from Germany was that the Reich Government had taken note with due interest of Secretary Hull's statement; that the Reich Government's "basic principle is, as is generally known, directed toward the regulation of international relations by pacific agreement and hence coincides with the ideas developed by the Secretary of State". The reply from Italy was that the Fascist Government "appreciates at their high value the principles enunciated by Secretary of State Hull"; that it favored everything which conduced to the pacification and to the political and economic reconstruction of the world; and that, therefore, it regarded with sympathy every initiative which tended to achieve that end by means of the limitation of armaments, by means of economic understanding among nations, non-intervention in the internal affairs of other countries, and any other means which might then or in the future appear responsive to this objective. The Japanese Government replied that it expressed concurrence with the principles contained in the statement by Secretary Hull; that it believed that the objectives of those principles would only be attained, in their application to the Far Eastern situation, by a full recognition and practical consideration of the actual particular circumstances of that region.

Offer of Good Offices

Secretary Hull called in Chinese Ambassador Wang and Japanese Ambassador Saito on July 21, 1937 and in separate conversations with them emphasized that the United States Government was ready and would gladly do anything short of mediation-which would require the agreement of both parties in advance-to contribute in a fair and impartial way toward composing the matters of controversy between China and Japan. The Secretary said that when two nations comprising 500,000,000 people were engaged in a controversy

in which general hostilities appeared imminent the United States could not help feeling great concern. He said that it was in the light of this situation and of the "intense desire" of the United States for peace everywhere that he conferred with them; that he thus approached each Government in a spirit of friendliness and impartiality in an earnest effort to contribute something to the cause of peace. He expressed the opinion that a war would result in irreparable harm to all countries involved and would prove "utterly disastrous" to human welfare and progress. ( )

On August 10, 1937 the United States Ambassador to Japan, under instructions from the Secretary of State, offered informally to the Japanese Government the good offices of the United States toward the settlement of the controversy between Japan and China. This offer contemplated the providing of neutral ground where Japanese and Chinese representatives might meet to negotiate and the giving of assistance in adjusting difficulties that might develop during negotiations. Japan did not respond to this offer; consequently the United States Government felt that there would be no useful purpose in making a similar approach to the Chinese Government. ( )

Meanwhile, the China "incident" had developed into large-scale military operations as Japan poured men and engines of war into China. On August 23, 1937 the Department of State issued a statement declaring that the issues and problems which were of concern to the United States in the existing situation in the Pacific area went "far beyond merely the immediate question of protection of the nationals and interests of the United States"; that the conditions prevailing in that area were intimately connected with and had a direct and fundamental relationship to the general principles of policy made public on July 16. In this statement it was declared further that the existence of serious hostilities anywhere was a matter of concern to all nations; that without attempting to pass judgment on the merits of the controversy, the United States appealed to the parties to refrain from war; that the United States considered applicable throughout the world, in the Pacific area as elsewhere, the principles set forth in the statement of July 16; and that that statement embraced the principles embodied in the Washington Conference treaties and the Kellogg-Briand Pact.

The Department stated that from the beginning of the controversy in the Far East the United States had urged upon both Japan and China the importance of refraining from hostilities and of maintaining peace; that the United States had been participating constantly in consultation with interested governments, directed toward peaceful adjustment; that this Government did not believe in political alli

ances or entanglements, nor in extreme isolation; that this Government did believe in international cooperation for the purpose of seeking through pacific means the achievement of the objectives set forth in the statement of July 16. ( )

On September 2, 1937 the Secretary of State sent a telegram to Ambassador Grew in Japan summarizing the attitude of the United States toward the conflict between China and Japan. The Secretary stated that the course of the United States as pursued during recent years in regard to the Far East had been animated partly by the thought of encouraging Japanese and Chinese efforts at developing toward each other and toward the world attitudes of real cooperativeness. The situation produced by the hostilities going on between China and Japan permitted, he said, little hope of any such attitude being reciprocally developed by those two countries in the near future. He doubted that those in control of Japanese policies valued appreciably the friendship of other nations or efforts made by the United States and other nations to cultivate good-will, confidence, and stability. Public opinion in the United States, he said, had been outraged by the methods and strategy employed by the combatants, particularly by the Japanese military, and had become gradually more critical of Japan; in addressing authorities of either side he did not intend to call names or make threats; however, he wished the Japanese Government to understand fully that the United States looked with thorough disapproval upon the current manifestation of Japanese foreign policy and upon the methods employed by the Japanese military in pursuit of that policy. He asked the Ambassador to suggest to Japanese officials that Japan, by the course it was pursuing, was destroying the good-will of the world and was laying up for itself among the people of the world a liability of "distrust, suspicion, popular antipathy, and potential ostracism", the liquidation of which would take many, many years of benevolent endeavor by Japan. ( )

A year later, in a conversation with the Canadian Minister, Secretary Hull said that since August 1937 he had proceeded on the theory that "Japan definitely contemplates securing domination over as many hundreds of millions of people as possible in eastern Asia and gradually extending her control through the Pacific islands to the Dutch East Indies and elsewhere, thereby dominating in practical effect that one-half of the world". ( )

On September 14, 1937 the President issued a statement to the effect that the question of applying the Neutrality Act remained in statu quo; that merchant vessels owned by the Government of the United States would not be permitted to transport to China or Japan any arms, ammunition, or implements of war; and that any other merchant

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