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July 27, 1941 - Image 3

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Michigan Daily, 1941-07-27

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JiMY 27, 1941



ndo-Ch inese

Frozen Assets
Of Nippon


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U.S. eyes shifed from Russia back
to the Far East again last week, as
diplomatic relations between Wash-
ington and Tokyo strained near the
breaking point.
First indications of trouble came
late Thursday when Vichy announced
that France had accepted "in prin-
ciple" Japanese demands for virtu-
ally complete military control of In-
do-China to "protect" that colony
frqm falling under British domina-
f Japanese spokesmen rationalized
well, but not convincingly. Tokyo
papers painted vivid pictures of Bri-
tish, Free-French and Chinese troops
ready to take over the rich resources
of the colony. Japanese forces, they
indicated, wanted no part of the
booty, sought further military bases
only to protect Japanese interests
and Vichy forces in the colony from
the aggressors.
From Vichy, where conversations
between Vice Premier Admiral Dar-
lan and Japanese Ambassador Soto-
matsu Kato were proceeding "satis-
factorily," came a report that no def-
inite agreement had been reached.,-In
Hanoi, meanwhile, Governor General,
Admiral Jean Decoux and General
Raishiro Sumita, head of the Japan-,
ese military mission, worked out de-
tails for Japanese occupation.
By late Friday, Japanese warships
were reported hovering off the coast
of Southern .French Indo-China, and
12 troop transports were reported on
their way to Saigon. Tokyo was los-
ing little time in making good her
diplomatic gains.
In, swift movements, Japan was
establishing herself midway between'
Britain's colonies of Singapore and
Hong Kong, and in a position threat-
ening to Dutch, British and U.S. pos-
sessions in the Indies group. By
week's end, Tokyo was already treat-
ing the Indo-China negotiations as
"closed," while diplomatic and mili-
tary feelers edged toward Netherland
East Indies possessions.
Vichy's attitude was one of com-
plete resignation, the same attitude
that has become synonomous with
French negotiations since the German
Washington, however, was far from
acquiescent. Acting Secretary Sumner
Welles sent stern notes to Tokyo,
President Roosevelt threatened oil
embargoes. (See Col. 1 below).
Russian Stalemate
Again last week, Russian and Ger-
man communiques offered little but
contradictions. Berlin again cut its
communiques to undescriptive reports
telling of "troops advancing accord-
ing to schedule on all fronts." Mos-
cow, too, was terse; talked chiefly of
"stubborn resistance."
Despite conflicting reports, one

thing was evident: the Russians were
not fighting a 'inning war, but they1
weren't losing very fast either. Ger-
man panzer units were still engaging
the Russians in the vicinity of Smo-
lensk, not many miles further toward4
Moscow than reported last week. The
success of a panzer. drive is largely
determined by its speed, but Nazi col-1
umns last week apparently had lost3
most of their original momentum.
Only major Nazi advance admitted
by Moscow was a German-Finn drive
past Lake Ladoga. Blitz columns
were reported as far as Petrozavodsk.
Berlin also reported that the last
remnant of the Stalin Line had been
pierced in the Kiev sector to the
south, and that Nazi troops were ad-
vancing on a five mile front, less
than 80 miles from the Ukraine capi-
On the main Leningrad battle front,
German columns had already given
up their original blitz strategy in
favor, of heavyartillery and Stuka
bombing of strongly reenforced Soviet
While Russians and Germans ap-
peared to be deadlocked for the prbs-
ent in a victory-less war, time was
paying heavily into Stalin's hand, The
original Nazi drive was scheduled to
sweep through Russia at a time when
her grain fields were green and un-
burnable. That grain is, however,
ripening fast, and retreating Soviet
columns will leave little but ash and
charcoal for food-hungry Berlin.
Long ignored by*"the international
spotlight, the Mediterranean area and
the near east made page one briefly
again last week.
From Rome came the report that
Italian air raiders had claimed two
large merchantmen, an unspecified
unit and a destroyer, and had dam-
aged one battleship of the Nelson
class and one merchantman.
From Spain came persistant rum-
ours that Germany was planning a
lightning drive through Spain to cap-
ture Gibraltar. Berlin said nothing.
In Turkey, meanwhile, Nazi diplo-
mats were dickering for permission
to cross that country for a drive on
the Russian flank. , Ankara was non
commital, moved to play British vs.
Germans, hoped Turkey could remain

answered Argentina's note affirma-
tively, claiming that Bolivia was "al-
ways willing to accept a peaceful
settlement in the border quarrel."
Meanwhile, however, as nothing
concrete came from the good offices
of Argentina, Brazil and the U.S., bor-
der fighting increased in intensity,
and Bolivia called to the colors all
men 'born between 1916 and 1919.
Latin America's minor conflagra-
tion, an 118 year-old baby war in
world of adult new wars, meant litttle
to the rest of the world except for
its threat to reduce Pan-American-
ism to nothing more than a Cham-
ber of Commerce slogan.
Real news from the south' came
Thursday when Ecuador charged that
3,000 Japanese soldiers were seen in
the Peruvian front lines as an ad-
vance guard in border fighting.
Hasty denials came from Tokyo,
Lima, almost too hasty to suit cynics
who watched leerily the ever-widen-
ing scope of Nippon's ambitions. Em-
phatic denials met however with em-
phatic reassertions, and Saturday
brought only rumors-that Japan was
fostering the international arson in
Latin America, that the slant-eyed
soldiers were merely part of the large
number of Oriental citizens in Peru,
that Ecuador's propaganda chiefs had
profited from lessons learned from
Nazi professionals.

-- - - Japanese Crisis

Abortive Putsch


Next door to pugnacious little Peru
and Ecuador is Bolivia, favorite hunt-
ing grounds of Berlin's silent South
American agents. And there last week
news was made when an abortive
Putsch failed, and President General
Enrique Penaranda declared that the
country was in a state of siege.
General Penaranda refused to dis-
close the plot, but newsmen wagered
more than beer that it had something
to do with a man supposed to be 6,000
miles away, fire-eating, 36-year-old
aviator, Major Elias Belmonte, Air
Attache of Bolivia in Berlin.
Too tough, for his bosses, Belmonte
had been sent to Berlin, where he
grew to admire the Nazi system, wrote
glowing letters home, was pre-or-
dained the logical Fuehrer for Bolivia.
Nothing more was known about the
attempted coup d'etat, except that
Bolivia has always been Latin Ameri-
ca's chief Nazi hotbed. And at week's
end Berlin smarted at the ousting of
its minister to Bolivia, held the U.S.
responsible. Four thousand Indians
revolted, were' quickly -repressed Fri-
day, and officials blamed Berlin.
Numerous arrests were made by
scurrying officials, four newspapers
suspended as Bolivia recovered from
its worst "Hun scare" since World
War I.

'Peaceful Means'


Glib grandmothers of inter-hemi-
sphere good will at week's end prog-
nosticated a quick finish to the lat-
est encore in. South America's two-
bit war as the Peruvian government
Friday sent a note to Argentina ac-
cepting proferred "peaceful means" to
halt border fighting with Ecuador.

I Quito's diplomats



--Karl Kessler and Bill Baker




WHEN Peter The Great trans-
formed an insignificant Russian
frontier village into the great for-
tress city of Leningrad two and a half
centuries ago, he called it Russia's
"Mindow on the west."
As reconstructed, the "window" had
the strongest iron bars. It became
known as virtually impregnable. So
secure were the czars behind its walls
that they made it'Pcapital of all Rus-
sia and gave it a glittering, brilliant
court. Napoleon - reckoned it too
strong and invaded Russia from Po-
land. Even in 1914, Germany avoid-
ed it, attacked from a different direc-
The Leningrad of 1941, second city
of Russia, is a far cry from the Len-
ingrad of earlier years-so different,
in fact, that' most military men con-
sider it more vulnerable to attack
than any other large city in the
world. Almost on the frontier, it
stands out like a sore thumb invit-
ing bomber attacks froni the west.
Natural defenses against a land army
are little better than a series of
swamps and lakes and marshes, many
of which have been drained. High
ground exists nowhere.
* * *
FOR SOME strange reason Lenin-
grad is cursed with more galvan-
ized iron roofing than any other city
in Europe. Such material is duck
soup for bombers. The big wharves
along the crowded winding waterfront
always are crowded with lumber-lad-
en barges headed for the Baltic or
along the Neva river canal and the
Volga for Moscow. These are more
duck soup for bombers.
Any enemy force, especially with
the aid of Finland, has a simple stra-
tegy cut out for it. 1 It must concen-
trate on encirclement of the city from
the southwest, then gradual envelop-
ment -until the great capital of the
czars has been cut off from its pre-
cious rail and water communications
with the rest of Russia. An army
successful in this operation has Len-
f-- T 'F rvaf

nerable metropolis-but the blitz
pace of the German army was not a
matter of common understanding, at
the time of their acquisition. An-
other link in the city's defense, ren-
dered useless in the case of a land
attack, is the fortress of Kronstadt
built by Peter in 1704 on an island
20 miles west of the city.
A force of close to a million men
is required to defend Leningrad-a
city worth defending for many reasons
besides its numerous concentrated
industries, railroad terminals, arma-
ment factories, and trade facilities.
Its greatest value to the Soviet lies,
however, in its position-it is a stum-
bling block on what otherwise might
be an easy road to Moscow.
** *
LENINGRAD, as a great city, dates
back to 1702. In that year Peter
The Great marched on the village at
the head of the iFinnish gulf, took it
away from the Swedes, and built him-
self a comfortable log house. Then
he brought thousands of serfs from
all parts of the empire and set them
to work driving myriad log piles into
the swampy land for the foundation
of the modern Leningrad. From his
cabin he directed the building of the
great fortress of St. Peter and St.
Paul-a stone bastion conceived as a
keystone of defense against any prey-
ing enemy. Palaces, parks and broad
boulevards were constructed, but dis-
ease and hardship claimed the lives
of so many workers that the city was
said to be built on bones.
The streets were laid out lavishly,
crossing and recrossing the delta
channels of the Neva river on some
600 bridges. The finest of building
materials were collected for the great
palaces and ornate private homes,
most of them now museums, hospitals,
schools and clubs. 4
NTUMEROUS rail lines serve the
.20th century city, particularly
important to a Russia-at-war be-
cause of its munitions, machinery,
precision tool and instrument plants.


- Reprisal Measures
/ \


Japanese moves in Indo-China last
week (see above) brought quick re-
prisal measures from Washington.
By the end of the week, Japanese
found their credits frozen in this
country, a virtual embargo on essen-
tial war materials that this country
has been supplying-mainly, oil and
scrap metal.. -
The freezing order works thusly:
A Japanese merchant has assets in
this country. If he wishes to con-
vert these assets to casl\ in order to
buy American goods, he must now
procure a license from the Treasury
giving him permission for the con-
version. The Treasury must know
what the -money will be spent for,
and if it happens to be war materials,
no permit is issued.
The order can work both ways. This
country has been the principle buyer
of Japanese silk. It is unlikely that
the Japanese will continue to ship
silk here if the assets gained in the
sale must be frozen.
However, experts say that if Bri-
tish and American shipments to
Japan of iron ore, scrap iron, copper
and other metals, cotton, wool and
oil were stopped, Japanese industry
would be on its knees in a few months.
Britain has already joined with
the U.S. in freezing Japanese assets.
Japan, in turn, has retaliated and
frozen British and American assets, a
fact received calmly by the State De-
partment here.
By request of Chiang Kai-shek, the
freezing order was extended to in-
clude Chinese assets also. Chiang's
fears were that Japan might make
use of credits gained during the
China invasion.
Army Wins Round
The battle continued in Washing-
ton last week over the question of re-

for the carrying out of Roosevelt's re-
Yesterday the Senate Military Com-
mittee approved a resolution and
slated it for appearance on the floor
of the Senate Wednesday.
The Committee's measure would ex-
tend the period of service indefinite-
ly, depending on the desire of the
President. This authority, however,
according to the proposed resolution,
could be curtailed at any time by Con-
gressional action.
The Committee's version mentioned
nothing of sending troops outside the
Western Hemisphere, nor did it in-
clude the War Department's sug-
gestion of a Congressional declared
national emergency.
The Defense Front'
On the defense front, three devel-
opments were outstanding last week:
Leon Henderson's production cur-
tailment predictions, the country-
wide aluminum drive and the com-
pleting of the draft for a property
seizure bill.
Henderson, early in the week, or-
dered a tentative reduction in the
production of automobiles of 50 per-
cent, a complete surprise to the
OPM, which had counted on a 20
percent cut. Friction developed, and
by the end of the week a showdown
before the President concerning the
overlapping functions of Knudson's
OPM and Henderson's OPACS ap-
peared inevitable.
Question was, does Henderson have
the necessary authority to put
through his projects? Answer will be
as Congress and the President see
it; probably no.
With the opening of the aluminum
drive, pots, pans and cocktail shakers
appeared from kitchens all over the
country to add to growing piles in

Meantime news came from London
that a Soviet military mission was
on its way here to discuss U.S. aid
to Russia.
Tax Rise Ahead
The House will consider this week
a defense tax l bill completed last
week by the Ways and Means Com-
mittee after three months of writing.
The measure calls for a revenue
of three and a half billion dollars
plus, some 29 million above the fig-
ure set last April by Secretary of the
Treasury Morgenthau. It would be
the greatest increase in taxes in the
nation's history.
The Committee approved a higher
excess profits levy on corporations,
a surtax on individual incomes, an
additional surtax on corporation in-
comes and increases in estate and
gift taxes.
In addition, if the bill passes, ex-
cise taxes will be imposed on such
items as soft drinks, club dues, auto-
mobiles, radios, . phonographs, rec-
ords, jewelry, furs, toilet prepara-
tions, coin-operated devices and
bowling alleys.
In The Dog House
Senator Wheeler remained in the
dog house last week as Secretary of
War Stimson and the President both
expressed their disapproval of his
propaganda tactics.
Stimson accused Wheeler of "com-
ing very near the, line of subversive
activities against the United States,
if not treason." This was brought
on by Wheeler's sending cards urging
opponents of the interventionists to
write to the President and Congress-
men urging them to keep the coun-
try out of war.
Cnm'.a nf tho a n . .n ahma aa A A ,'.noai


odds with Germany, the name was it in honor of Lenin in 1924. It thus
changed to Petrograd because Peter becomes significant that present Ger-
The Great was descended from a Ger- man communiques refer to the city as
man family. The Bolsheviks renamed St. Petersburg.
Nazis Behind Schedule

It is much too soon to conclude
that Hitler's big parade to the East
has definitely bogged down in mud
and blood in western Russia. There
can be no doubt that the Nazi propa-

Yet German propagandists empha-
sized that six-week schedule and as
the last week of it opens, it is glar-
ingly obvious that the Germans have
very badly miscalculated some-
where. Probably it was the techni-

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