Wairarapa Times-Age WEDNESDAY, MARCH 8, 1939. STALEMATE IN THE FAR EAST.

Wairarapa Times-Age, 8 March 1939, Page 4

Wairarapa Times-Age WEDNESDAY, MARCH 8, 1939. STALEMATE IN THE FAR EAST.

t AS he was quoted in one.of yesterday’s cablegrams from London Mr George Shepherd (confidential atßisei 1 General Chiang Kai-shek) is of opinion that, the n \CJn"a will last for at least a further three years and is almost, certabi to end in stalemate.” Precisely what the last-mentioned prediction implies is not quite, clear. The prospect of an ultiraa *; stalemate may appear to offer the heroic Chinese a reward and recompense for the tremendous efforts and saciihces H is now making in its dogged resistance to a ruthless and. highly organised enemy. Happier davs at least, will have dawned for China however when it is. demonstrated that Japan is incapable o driving her invasion to a point of decisive success. That measure of disastrous failure on Japans part evidently is implied in Air Shepherd’s belief that the war is almost c eilan to end in a stalemate. Similar opinions have been e M )lcsS( ? cl bv other observers of the course of events in the bar East. In a‘recent book, for example, Mr E. A. Mowrer, tlie well-known American special correspondent, declares that the vital factor is that, of Chinese morale. If China holds the writes), it will be up to Japan to decide whether it wishes to limit its objectives and withdraw to the north with considerable plunder but great loss of f^ e sibility of a new and worse war on its hands five years thenc , or whether it prefers to continue an indecisive struggle unt forced by sheer exhaustion to clear out, not only of occupiec China, but conceivably from stolen Manchuria as we .... Always supposing there be no general war in the meant .... Tn all this there is, of course, a. considerable element of speculation, but the visible, and established facts of the position can hardly be regarded as encouraging the Japanese to hope ioi ultimate victory in China.

In nearly a year and a half of warfare, the Japanese have conquered virtually the whole coastal zone of China and on several lines have penetrated deeply mto'the interior notably up the Yangtse valley west of Hankow, where a. great battle is now being'fought, but they have failed completely to break the organised resistance of the main Chinese armies, which have time and again escaped attempted envelopment. Based on the western and south-western provinces which are probably in great part secure against invasion save by air bombers, General Chiang Kai-shek is drawing upon virtually unlimited reserves of man-power in organising additional forces, now said to number two million men. These forces are recruited in the areas occupied by the Japanese, as well as m those still immune from invasion.

With some routes of supply from the outside world still, open, amongst them the back-door road from Burma, the Chinese Generalissimo is reasonably well placed not only to maintain, but to build up forces, which the Japanese henceforth must attack, if at all, largely in mountain country m which their mechanised equipment will be of little avail. Ihe operations of the Chinese regular forces are co-ordinated with those of the guerillas of the allegedly occupied plains and even from a purely military standpoint, Japan is faced by a task of staggering and increasing immensity.

At the same time, while any thought of revolution being occasioned in Japan by war weariness is ridiculed by some apparently well-informed observers, the “China incident” is imposing economic and other burdens on the people of Japan and on Japanese industry which cannot well be borne indefinitely Japan’s war expenditure up to the end of 1938 is estimated to have amounted to over £43o,ooo,ooo—about three times the total annual State expenditure in pre-war days. About two-thirds of Hie increased expenditure has been from loan money. The total of the current year’s extraordinary Budget for naval and military expenditure is equal to that for the previous eighteen months —about £430,000,000. It is expected that practically the whole of this sum will have to be borrowed. On these figures, Japan’s national debt, by the end of another financial year, will be about four times the amount at which it stood in 1931.

The position and outlook might be modified if Japan were able to capitalise her gains of occupied territory, but the measure of her success in the organisation of puppet governments and other measures to that end appears to have been uniformly'.poor. There are on the whole good grounds for believing that the kind of stalemate that is being approached in China is likely to spell disaster for Japan.

THE POTATO EMBARGO.

A PART from what it means directly to consumers in Australia and to producers in this . country, the embargo on the importation of New Zealand potatoes into the Commonwealth is of interest from a wider standpoint as showing how far the Federal Government is prepared to go in imposing trade disabilities on a sister Dominion. The position in brief is that 1 he body of Australian consumers and New Zealand producers are alike being penalised in order to confer unmerited latonis on a limited section of Australian producers, the potato growers of Tasmania. Observing .the other day that the effect of prohibiting' imports from Now Zealand was that when tlieic was any shortage the price of potatoes in Australia “soarsJo any figure that consumers are willing to pay for the quantity placed on Ihe market,” the “Sydney Morning Herald” added :—

The unfortunate position for Tasmania is that the price soars highest when the mainland crop fails for want of rain, and Tasmania, though enjoying the receipt of an extraordinary income for her potatoes, suffers the obloquy which always attaches to those who are deemed gross profiteers.

A report that the Federal Cabinet is likely to agree this week to some modification of the embargo is the more likely to be borne out since the discontent of Australian consumers has of late been expressed forcibly. One suggestion is that a quota system may be adopted. Another is that potato imports should be subject to Customs taxation, varying inversely with the Australian price and supplemented by anti-dumping legislation guarding against imports being dumped into Australia at prices below parity with those ruling in the exporting country.

An early modification of Hie embargo in one way or anol her now seems to be reasonably assured, but the manner in which this question has been dealt with by the Australian Government is not in itself calculated, to facilitate and siniplifj trade negotiations between the two Dominions.