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Evening star. [volume] (Washington, D.C.) 1854-1972, December 26, 1937, Image 1

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(U. S. Weather Bureau rorecaet.)
Generally fair and slightly colder today;
tomorrow increasing cloudiness; gentle
variable winds. Temperature yesterday—
Highest, 52, at 3 p.m.; lowest, 33, at mid
night. Full report on page A-2.
(4s) Means Associated Press.
Full Associated Press
News and Wirephotos
Sunday Morning and
Every Afternoon.
K- -I r--«ri vr o.i OAT Entered as second class matter
O. —^\0. post office, Washington. D. C.
Death Comes Quietly as
Family, Assembled for Holi
days, Is at Bedside.
Spent Last Years in Effort for
Peace and the Relief of
Human Suffering.
By the Associated Press.
CLEVELAND, Dec. 25.—Newton D.
Baker, who as Secretary of War mo
bilized the greatest Army in the his
tory of his country, died today after
a heart attack.
The short, eloquent statesman who
served in the World War cabinet of
President .Wilson had been confined
to his bed since shortly after his 66th
birthday December 3. He was first
stricken several months ago in Syra
cuse, N. Y.
He recovered from this attack and
resumed some of his law practice here.
As counsel for a number of utilities
he recently appeared in court at
Chattanooga. Tenn., in a suit involv
ing the utilities and the Tennessee
Valley Authority.
In the later years of his lift he had
Withdrawn gradually from the multi
plicity of interests which he cultivated
after leaving public service, living
quietly at his home here and visiting
his law offices frequently.
Left Central Committee.
Last year he resigned as chairman
of the Cuyahoga County (Cleveland)
Democratic Central Commtitee, a
position he had held for 26 years. He
said then: ' It's up to us older men to
give the young fellows their chance.”
Although reluctant in late years to
express himself on political questions,
he studied international affairs closely.
A little more than a year ago. he said,
“the world is in the most unsafe
eituation I have ever seen it."
“Outside my profession,” Baker said,
*'my two major interests are Interna
tional affairs from the point of vie*
of helping to build up in the w rid
effective, constructive agencies for the
preservation of world peace, ard, sec
ond, the extension of educa* onal op
portunity and the adapt*‘.on of edu
cation to the p-esent erudition of the
world so that den- ...racy can have a
chance to act with intelligence.”
Members of Family Present.
Baker is survived by his widow; one
ion, Newton D. Baker, 3d: two daugh
ters. Mrs. Margaret Wright of St.
Louis and Mrs. Elizabeth McGean of
Cleveland and five grandchildren.
Members of the family had gathered
nt the Baker home for a quiet Christ- !
mas. The former War Secretary's son.
Mrs. Baker, Mrs. McGean, a physician
and a nurse were with him when he
Members of the family said he was
“cheerful to the last" and felt well
enough to join in some of the Christ
mas festivities. He conferred for a i
while early in the day with his law I
partner, Joseph C. Hostetler.
Dr. Roy Scott, one of his physicians,
laid Baker had suffered from heart
trouble for several years. Death was
caused, he said, by coronary throm
Members of the family said he made
his last visit to his law office Decem
ber 3, his birthday.
Gained Fame in War.
To the lot of Newton Diehl Baker, I
lawyer and fighting pacifist, fell the
task of conducting the greatest mili
tary activity in which the United
States ever has been engaged. Though
he has risen to national fame as a
lawyer, it was his brilliant work as
Secretary of War in the cabinet of
Woodrow Wilson that gave him his
greatest hold on the American people.
After the World War, Mr. Baker
fought consistently for the ideals of
Wilson, sacrificing personal popularity
and political prestige whenever neces
•ary to champion these ideals.
Returning to the practice of law fol
lowing the war, Mr. Baker was
chief counsel in some of the greatest
Industrial cases handled In the Amer
ican courts during the last decade. He
was regarded at the time of his death
as one of the most capable lawyers In
the country.
Among those who knew him Mr.
Saker was noted for his prodigious ca
pacity for work. Stories still are told
In the War Department of his inex
haustible energy, which wore down all
With whom he came in contact. His
driving force was all the more remark
able In view of his slight physique—he
never weighed more than lio pounds.
It also is indicative of his character
that he never was known to lose his
Newton Baker took office as Secre
tary of War amid the most dramatic
circumstances and on his first day he
met a major crisis in military affairs
with the coolness which later charac
terized his conduct of the Nation’s
military affairs in its greatest conflict.
Massed 100,000 Troops in Month.
Hie night Mr. Baker left his home
at Cleveland to take up his cabinet
duties Francisco Villa, the notorious
Mexican bandit, raided the town of
Columbus, N. Mex. The next day,
when he took the oath of office, Amer
ican troops were sent into Mexico to
pursue the raiders as a result of ai- I
most his first orders, and a tew days
later Gen. John J. Pershing crossed
the border at the head a strong col
umn on his famous ,-punitive expedi
Mr. Baker mobilized along the inter
national border within a month 100,000
National Guard troops from the va
rious States. Though Pershing’s ex
pedition failed to captiVfe Villa, it suc
ceeded In driving bandit bands away
from the border, and what 1s more
Important, it gave thousands of Amer
ican officers and men excellent train
ing for the World War service that
was to come in another year.
Mr. Baker faced a tremendous job
when this country entered the World
War. Though the war had been in
progress three years, the only military
activity In which this country had en
(See BAKBR, Page A-5).
All-Time Peak in ’38 Is Pre
dicted by U. S. Chamber
of Commerce.
Mounting governmental costs
and taxes provide political fodder
and bid fair to be one of the most
important issues in the 1940 elec
tion. President Roosevelt has ex
pressed concern and urged econ
omy on Cong ess. Discussion of
tax relief, as offset to business re
cession. at recent special session
brought no action, but is expected
to be major item on agenda of im
pending session. Recent congres- j
sional investigation disclosed tax
loopholes and evasions.
Americans next year probably will
pay $1 out of every $5 of income to
Federe., State and local governments,
tlie T nited States Chamber of Com
mer> e predicted yesterday.
This will represent an all-time and
d .ngerous tax peak, the chamber
The forecast was contained in a re
port of a special committee, which es
timated the total 1938 tax burden at
about $13,500,000,000, and urged over
hauling of State tax laws and con
certed civic pressure for local economy.
The 20 per cent ratio of taxes to
income was described as one "which
has been regarded a* the danger sig
Breaking down the predicted total,
the committee estimated that Federal
taxes would amount to $6,400,000,000
and State and local taxes to $7,100,
National Income Prediction.
“Government agencies," it stated,
“calculate that the total national in
come next year will be silghtlv below
the $69,000,000,000 estimate for this !
year. On this basis, the Nation's tax ;
collectors will dip into the national in
come and take about one out of every
five income dollars.”
The report said the current business
recession emphasized the need for re
tarding the rate of increase in govern- |
mental expenditures and taxes, "to
the end that the restraints and handi
caps which taxes place upon enter
prise may be moderated and business
given more freedom to cope with cur
rent difficulties."
The Federal Government, it pointed
out, is taking steps to revise its tax
laws to eliminate inequities and dis
criminatory features, and stated there ;
is an equal need for similar action by
State governments.
“Eleven State Legislatures will be in 1
regular session this winter and
spring," stated the report, “and a
number of special sessions are likely
to be called. In some of these States
there are outstanding hardships re
sulting from inequitable provisions
of tax laws. If uniformly the States
join with the Federal Government in
efforts to remove or lighten those
taxes which are most oppressive upon
business operations it will have a pro
nounced effect in encouraging eco
nomic improvement and increasing
Warn Against U. S. Encroachment.
It warned, however, that "any fur
ther encroachment by the Federal
Government” In its revenue-raising
efforts will handicap State and local
governments in placing their fiscal
affairs on a solid foundation and
lead to a greater dependence on
Federal grants.
Using a three-year comparison to
show the tax load growth, the com
mittee found:
“The total volume of taxes in 1935
was about $10,400,000,000—$3,900,
000,000 of Federal and $6,500,000,000
of State and local.
"The total volume of taxes in 1937
may reach as high as $11,800,000,000,
of which $5,000,000,000 is Federal and
$6,800,000,000 State and local taxes.”
It pointed out that total taxes for
1937 are well in excess of the pre
vious peak of $10,300,000,000 reached
in 1930 and are about $3,500,000,000
in excess of the total amount col
lected in 1920, when the highest war
time rates were in effect. The $13,
td0,000,000 total forecast for 1938
will be 35 per cent above the 1936
total, 30 per cent above the 1930
peak and 60 per cent above the maxi
mum war-time yield in 1921.
Chairman Nichols Declares
Committee Will Consider
Revenue Plans First.
Effort to Revamp Local Govern
ment Will Be Based on Citi
zens' Report.
While two sources of D. C. rev
enue, the business privilege tax and
the 25-cent real estate tax hike,
terminate at the end of this fiscal
year, Congress has received 1939
Budget Bureau estimates calling
for $1,900.000 in appropriations
over the current $46,000.000. At
the same time proposals recom
mending a score of changes in the
District Government set-up, in
cluding national representation
and freedom of local budget from
Federal Budget Bureau domina
tion, are also before the House.
Plans for reorganization of the mu
nicipal government will be temporar
ily sidetracked for the more urgent
tax-increase program for the coming
fiscal year, it was disclosed last night
by Chairman Nichols of the Fiscal
Affairs Subcommittee of the House
District Committee.
"We are going to get the tax legis
lation out of the way before even con
sidering reorganization," he declared.
According to the present program,
the Fiscal Affairs Subcommittee will
tackle the tax program as soon as
Congress convenes for the regular ses- i
sion, January 3. Reorganization prob- :
ably will be considered in February, j
Report Basis of Study.
Mr. Nichols explained the reorgan
ization plan outlined in the report of
the Citizens’ Committee on Efficiency
would be used as a basis for the sub
committee's study.
"That doesn’t mean the subcommit
tee will be governed by the recom
mendations in that report,” he said.
"In fact that report may be scrapped
entirely. I'm inclined to believe, hdw- I
ever, the subcommittee may accept j
some parts of the report and discard
"My idea is to have the subcommit- ;
tee consider all proposals for reorgan
isation. I am convinced there can be
a reorganization of the District gov
ernment that will save taxpayers thou
sands of dollars and at thi same time
increase the efficiency of the munici
pal services.”
One of the few members of Con
gress to remain in Washington for the
holidays. Mr. Nichols said he would
spend most, of the time studying the
District’s financial situation in prepa- j
ration for the hearings. He is hope- j
ful the Commissioners will make their
recommendations for a new tax pro
gram early this week to give him
sufficient time to analyze it in ad- !
vance of the subcommittee's initial
meeting. i
Proposed Tax Plans.
Mr. Nichols already has made sev
eral inquiries at the District Building
in connection with the tax program
and was told it had not been com
pletely mapped out. There have been
reports, however, the Commissioners
are seriously considering recommenda
tions of the Citizens' Advisory Com
mittee on Taxation for a general sales
tax and an increase in the Federal |
payment toward District expenses.
Since the personnel of the Fiscal Af
fairs Subcommittee has not been com- j
pleted, it is not known how a sales
tax proposal would be received by the
members. Mr. Nichols favors con
tinuation of the business privilege tax
in a modified form, largely because he
does not believe Congress would ap
prove a direct sales tax. Representa
tive Cole, Republican, of New York,
who will serve on the subcommittee,
is an income tax advocate. Both are
opposed to an increase in the Federal
payment at this time.
favors Present Really Tax.
Mr. Nichols also favors retention of
the present $1.75 real estate tax in
the coining fiscal year. The levy auto
matically would return to the former
$1.50 rate at the close of the current
fiscal year unless continued by direc
tion of Congress. The present busi
ness privilege tax also is destined to
die at the same time, v
No figures have yet been submitted
to Mr. Nichols as to the probable
budget deficit in the coming fiscal
year. Rough estimates, based on the
Budget Bureau's $47,800,000 budget,
indicate that about $4,000,000 will have
to be raised by additional taxation.
CHICAGO, Dec. 25 <^P).—Roy Don
ovan, 32, suffocated beneath 20 tons
of coal today, while his brother, James,
43, worked frantically in an effort
to extricate him.
Roy slipped and fell while attempt
ing to dislodge lumps of coal in a
hopper and the mass tumbled over
him. Firemen recovered his body
after digging frantically for three
Liquid Helium Will Be Made
Wholesale in Yale Laboratory
By ihe Associated Press.
NEW HAVEN, Conn., Dec. 25.—
Yale University physicists expect
soon to go into the "wholesale" manu
facture of liquid helium as a result of
a new apparatus being set up in the
Sloane physics laboratory.
It will take one hour for the appa
ratus to produce one quart of liquid
helium, but that is 80 times better
than the results obtained with older
The new apparatus, invented two
years ago by a Russian scientist, is
being constructed under tbs direction
of Dr. Cecil T. Lane, physics instruc
tor. in collaboration with Norman I.
Adams, jr., associate professor of
Dr. Lane said the production of
liquid helium in comparatively large
quantities will broaden the field of
scientific research. He pointed out,
for example, that it could be used to
determine whether some bacteria, im
pervious to liquid air, can survive a
liquid helium bath. Liquid air is 150
degrees warmer than liquid helium,
which has a temperature of minus
450 degrees Fahrenheit,
1 j
Session to Consider Relations
Of Science and Human Society
Series of Conferences Arranged by Dr.
Moulton of Brookings—Dr. Par ran
Also Schedules Meeting.
An effort to balance the jumbled
ledger of science and society will be
the central objective of the annual
meetings of the American Association
for the Advancement of Science, open
ing at Indianapolis tomorrow.
Nearly a thousand scientists from
the research institutions and uni
versities of Washington. Virginia and
Maryland will attend these sessions
for the association's 18.000 members
which will continue throughout the
week. Notable among the events will
be a three-day symposium on the
present relations between science and
human society. During the last half
century many of man's ancient dreams
of Utopia have been made everday
realtities, and the • impossible” has
been accomplished over and over
The length of life has been almost
doubled. Every map, woman and
child in America is master of 10
to 15 slaves in the form of mechan
ical power. Lead has been changed
inio gold. It is a commonplace to
talk around the world. The continent
can be crossed in a few hours. And
yet human happiness, it seems to
many, has not vastly improved and
the problems involved in human be
ings living together have become more
complex than ever.
Aims of Conference.
An effort will be made to clear the
decks so that this apparent paradox
can be explained. World authorities
will render an accounting of the
stock on hand in the form of power,
material goods and prospects for the
future and will try to determine what
mistakes have been made in handling
these resources so that society, it
seems to many, has been brought
(See HENRY, Page A-5).
Downtown Yule Revelers
See Conflagration at Gar
rison’s Store.
Handicapped by strong fumes from
burning merchandise In the basement
of Garrison's novelty store. 1215-17
E street N.W., eight firemen were over
come last night In battling the t^o
alarm blaze, which attracted several
hundred Christmas revelers.
In an effort to get to the fire in
the wir.dowless basement, firemen
chopped six large holes in the store's
two-and-a-half inch concrete, fire
proof floor. Stock stored in the base
ment was estimated as worth between
$10,000 and $15,000. Only the fire
proof floor prevented considerable
damage to Christmas merchandise on
the main floor.
Wearing Gas Masks.
As firemen fought to get into the
basement they were forced back by
the fumes, caused apparently by the
burning of cellophane, toys and
school supplies. Several had to be
carried from the buildings, while others
were helped out by fellow workers and
police. A number of the fire fighters
were affected by the fumes, but re
fused treatment.
Smoke Pumped Out.
Potomac Electric Power Co. squad
men cleared away the heavy smoke
by pumping several hundred pounds
of compressed air into the cellar.
Receiving first aid at Emergency
Hospital were Capt. Millard Sutton
of No. 16 Engine Co., who was ad
mitted, and Pvt. Edward Krapke of
No. 3 Engine Co. He was dismissed
after treatment.
Those treated at the scene of the
fire included Sergt. C. E. McFarland
of No. 6 Engine Co., Sergt. E. M. War
field of No. 1 Rescue Squad, Pvt. J. F.
Madigan of No 2 Engine Co, Acting
Deputy Fire Chief Edward O'Connor,
Andrew Buscher, acting chief engi
neer, and a private named Crawford.
W. B. Garrison, proprietor of the
store, who came to the scene upon
(See FIRE, Page A-3.)
Blast Causes $80,000 Damage at
Coraopolis, Pa,, Plant.
CORAOPOLIS, Pa., Dec. 25 (A*).—
An explosion wrecked a 20.000-gallon
gasoline tank today, tossing the top
across railroad tracks 100 yards away
and igniting a second tank.
EL V. Helm, assistant superintend
ent, said damage likely would not ex
ceed $80,000 and that no one was
seriously hurt. One workman was
knocked down.
Firemen fought the flames for three
hours, preventing a spread to other
tanks containing 500,000 gallons of
The holiday lull saved workers in
the plant, where less than three years
ago a similar blast took two lives.
Radio Program* PageF-3
CwqlUti Un, Pi|i A»2
Man. 71. Struck by Car Near
Laurel—Woman Dies of
Head Injuries.
Two more holiday traffic deaths
occurred last night when a 71-year
old man was killed instantly near his
home oil the Skaggsville road, about
a mile north of Laurel, Md., and
another victim, injured in an accident
on the Baltimore pike Friday, died in
Casualty Hospital. Five persons were
killed Friday and Friday night.
John T. Cole, 71. who lived at the
home of Mrs. B. W. Harding on the
Skaggsville road, was returning home
about 6:30 p.m. when he was struck
by a car police said was operated by
Charles M. Bentling, 19. also of
Skaggsville. Mr. Bentling was released
on $1,000 bond to appear at the in
quest set for January 5 by Justice of
the Peace J. I. Trobaugh of Savage,
Md. '
The other victim w-as Mrs. Clara L.
Powell. 38, of Amelia Courthouse, Va.,
who died last night in Casualty Hos
pital of head injuries. Her husband,
Conway J. Powell, 40, was killed in
the same accident. Their deaths or
phaned their two sons, Conway, jr.,
15, and Charles, 12, who were not seri
ously injured in the accident.
Richard Eckstine, 17-month-old son
oi ram EcKsune or 406'i Eightn
street S.E.. was injured yesterday when
a car driven by his father collided
with a car driven by Joseph W. Mar
tin, colored, of Whitesboro, N. J. The
child was thrown against the wind
shield, receiving lacerations of the face
and head. He was treated at Casualty
Hospital and discharged.
Bessell A. Parks, 1826 California
street N.W., received a broken leg and
nose and mutiple cuts and bruises
when struck by a hit-and-run motor
ist at Eighteenth street and Kalorama
road N.W. shortly before last mid
Earl Foster. 6, 3521 Nichols avenue
S.E., received a fractured leg and
bruises on his face when he ran from
behind parked cars in front of his
home into the path of a car police said
was driven by James L. Backstrom. 51,
2121 New York avenue N.W. Earl
was treated at Casualty Hospital.
A colored man who died' Friday
night in Gallinger Hospital from in
juries received when he was struck
by a taxicab was Identified last night
as Edward Grayer, of 1117 Seventh
street S.E.
Lloyd H. Dreisonstok, 20, of 5803
Chevy Chase parkway N.W.. and Miss
Ann McCloskey, 16, of 2603 Mozart
place N.W. escaped with slight in
juries last night when the car In
which they were riding plunged down
a 50-foot embankment and came to
a stop on Its side in Rock Creek near
Riverside drive and P street N.W.
The youth, who is the son of Lt.
Comdr. Joseph Y. Dreisonstok, U. S.
Navy, retired, told police he was forced
from the road by another par. He
received a slight cut cm the ear. while
MiM McCloskey suffered lacerations to
her forehead. Both were treated in
the emergency room at Emergency
Hocpital and discharged.
Yule Death Toll Exceeds 231.
Five Die in Oil Stove
E» tbe Associated Press.
Violent death shackled tragedy onto
the Christmas scene of scores of fam
ilies across the Nation today.
With more than 160 reported killed,
the toll mounted hourly—fatal crashes
on streets and highways, shootings,
train wrecks; and flaming death in the
night came to five members of a fam- 1
ily gathering at Auburn. Me., when
an oil heater exploded and destroyed !
a flimsy lake-shore cottage where 25
persons had gathered. Two of the vic
tims. trapped as they slept, were little
, girls.
Six men were drowned as their au
tomobile plunged over an embank
ment into a creek four miles south of
Wellsburg. W. Va. The sedan, all
windows closed, sank in 10 feet of
Bodies Finally Recovered.
i Rescuers worked three hours to free
' the bodies from the car. a sedan.
' Sheriff Herbert Traubert identified the
men from papers found on the bodies
as: Thomas Whitfield. Samuel Ross
and Thomas Vaska, all of Houston.
Pa.; Donald Everett and John Kur
koski. both of Midland, Pa.; and How
ard Codol of Canonsburg. Pa.
The only witness, Mrs. Melvin Rai
; righ, who lives nearby, said the car
plunged from the highway just be
.. fore it would have reached a small
bridge spanning the creek. The car
was traveling at moderate speed and
left the road suddenly.
Frosted windshields cost the lives of
three persons in a head-on auto crash
at Fort Dodge, Iowa, and a railroad
; crossing collision near Danville. 111.,
resulted in sudden death to Fred Car
I ter. 51. Gates, Ind., coal mine oper
ator, whose car was hit by a Wabash
Railroad freight train.
Illinois reported 25 Yuletide deaths,
Pennsylvania, 18; California, 15; Ohio,
16, and Maryland, 14.
25 Hurt as Trains Collide.
A collision between a 10-car mail
! and express train and an 11-car pas
j senger train at Hopkinsville, Ky„*
caused injuries to 25 persons. Dr.
! Egbert W. Smith, 76, Nashville, secre
j tary of the Foreign Mission Board of
; the Southern Presbyterian Church,
suffered broken ribs.
Santa Claus meant death to Jim
mie Maloney, aged 3, in Lancaster,
S. C. Toddling across a street to
display his Christmas gifts to neigh
bors, he was struck down by a car and
instantly killed.
In Winchester. Va„ James Corbin,
14. met violent death when struck
down as he rode on a shiny new
bicycle he had just received for Christ
Chicago had a similar incident. Po
lice said Thomas Burns, 32, shot and
killed his father, James Burns, 65,
when his father became angry “for
nothing at all.” The father was
found dying on a chair beside an
undecorated Christmas tree.
Tries to Run Down Policeman.
In New York a hit-run motorist,
after killing a pedestrian, attempted
to run down a policeman in making
his escape. The driver swung his car
at the patrolman and sped away amid
gunfire from the officer’s revolver.
Hours later the pedestrian victim was
identified by his son-in-law in the
At Pittsburgh, the two sons of
William Strous, a railroad fireman,
waited anxiously for their father to
arrive home from his run for Christ
mas dinner. He never came. He was
killed in a wreck a mile from the
Panay Incident Is Considered
Closed Although Indemnifi
cation Remains to Be Set.
“Mistake” Version Is Rejected With
Reliance Still Being Placed in
Naval Court's Findings.
Text of the latest note of the United States to Japan will be
found on Page A-4.
Ey the Associ*t*d Press.
The United States accepted yesterday Japan’s guaran
tees “against infringement of, or unwarranted interference
with, the rights and interests of the United States” in China.
The Panay incident, which threatened to create serious dip
lomatic trouble, if not worse, between the two countries, was con
sidered closed as to its general lines. Some technical points,
chiefly the amount of the indemnification, remain to be worked
Response Seen to C. S. Request.
Secretary Hull, in a formal reply to the Japanese note Friday,
“The Government of the United States regards the Japanese
government’s account, as set forth in the Japanese government’s
note of December 24, of action taken by it. as responsive to the
request made by the Government of the United States in this
Government’s note of December 14.”
Secretary Hull conferred with President Roosevelt, Under
secretary Surrner Welles and Assistant Secretary Hugh W'ilson
before inditing his reply.
The United States continues to rely, however, on the facts
contained in the findings of the Navy court of inquiry. This
may be taken to mean that this Government does not admit the
version of “mistake,” as contained in the Japanese note, but does
not intend to pursue the argument further.
Three U. S. Warcraft Stand
By in Harbor to Aid 300
B» the Associated Press,
SHANGHAI, Dec. 26 (Sunday).—
The Japanese navy announced today
that a blockade had been thrown
around the industrial city of Tsingtao,
where three United States warcraft
were standing by to evacuate 300
Japanese land forces pushing for
ward into North China previously had
cut off communications between
Tsinanfu, Shantung Province capital,
and Tsingtao, which is on the coast
390 miles north of Shanghai.
War Fronts Widened.
With the Japanese widening their
war fronts both in North and South
China, there was little in the Orient
to mark the Christmas message of
peace on earth.
The navy announcement said the
blockade was directed at Chinese ships
only and that foreign shipping would
not be affected.
Troop movements during the past
week had caused increasing fears that
Tsingtao would be attacked in re
taliation for the destruction of Japa
nese cotton mills there.
The steamer Shenking. which left
Tsingtao before the blockade was
established, arrived in Shanghai witn
a number of foreign refugees, includ
ing 15 Americans.
Ships Sunk in Harbor.
Preparing to defend tne city, the
Chinese sank numerous vessels, in
cluding a large Japanese-owned
dredger, in the inner harbor to pre
vent^'entrance of Japanese warships.
Mrs. Ellis Gerber, wife of the man
ager of the Universal Leaf Tobacco Co.,
from Charleston, S. C., reported Tsing
tao was an armed camp, and said more
Chinese troops were arriving daily.
The city’s famous beaches, have been
mined, she said.
The principal worry of the foreigners,
she declared, was the Chinese mili
tary's threat to blow up the water
works and completely cut off the city's
water supply.
News from the Hangchow area,
south of Shanghai, was meager be
cause of disrupted communications,
but foreign sources reported stiff fight
ing was going on in the suburbs north
west of the captured city and fhe Chi
nese still wrere resisting to the north
American marines and sailors within
Shanghai had their first overnight
furloughs since fighting began here
last August. There were turkey din
ners aboard battleships, and curfew
(See SHANGHAI, Page A-4).
nopes steps Are Effective.
After accepting Japan’s note,
Mr. Hull said in his reply:
“It is the earnest hope of the
Government of the United States
that the steps which the Japanese
Government has taken will prove
effective toward preventing any
further attacks upon or unlawful in
terference by Japanese authorities or
forces with American nationals. In
terests or property in China."
The United States note, of seven
paragraphs, consisted chiefly of ref
erences to the American note of
December 14 and the Japanese notes
of December 14 and 24.
It “observed with satisfaction the
promptness with which the Japanese
government in its note of December
14 admitted responsibility, expressed
regret and offered amends."
Mr. Hull, who soon after the receipt
of the Japanese reply of Friday con
sidered it satisfactory as to guaran
tees (having already regarded as sat
isfactory’ the note of December 14
with respect to apologies and indem
nifications!, took less than one day
irf which to reply.
Guarantees Are Listed.
What Mr. Hull accepted as guar
antees were the following:
1—'That “rigid orders” were issued
to Japanese military, naval and for
eign office officials to observe more
strictly repeated instructions against
infringement of United States rights
and interests in China.
2. That the Japanese government is
“studying carefully every possible
means of achieving more effectively
the above stated aims.”
3. That the Japanese government
“is ascertaining, in closer contact with
American authorities in China, the
whereabouts of American interests and
nationals,” presumably so as to avoid
unwarrantably interfering with them,
4. That the Japanese government
is improving means of communicating
intelligence with regard to the where
abouts of American nationals and in
terests in China to the Japanese au
thorities on the spot.
Indemnity Up to U. S.
Japanese sources here said the ques
tion of indemnifications would be
speedily settled by Japan's accepting
any figure set by the United States.
The Japanese note said that govern
ment “will make indemnifications for
all the losses.”
Sources close to the State Depart
ment summed up Mr. Hull's note as
an acceptance with two- implied reser
1. That “the Government of the
United States relies on the report of
findings of the court of inquiry of the
United States Navy, a copy of which
has been communicated officially to
the Japanese government”—(circum
stances which may be interpreted as
disproving the Japanese contention of
2. The United States will wait to
see how effective will be the Japanese
steps toward preventing interference
with Americans and American in
Friendship for Japan Growing,
Hiroliito Says, in Opening Diet
By the Associated Press.
TOKIO, Dec. 26 (Sunday) .—Em
peror Hirohito, specifically mention
ing a “growing friendship and cordi
ality” in Japan’s foreign relations, to
day opened the 73d Diet session.
“In opening the Imperial Diet we
take the opportunity to inform the
members of the House of Peers and
the House of Representatives we
feel greatly gratified to see relations
between Japan and her treaty powers
growing in friendship and cordiality,”
the Emperor's rescript said.
“Our officers and men, winning every
battle, are enhancing their military
prestige both at home and abroad,
while the nation is solidly uniting in
overcoming difficulties attending the
current situation.
“We are confident of attaining our
ultimate objectives by depending on
the unswerving loyalty and devotion
of our whole nation.
“We have ordered the ministers of
state to submit to the Imperial Diet
an ordinary budget for 1938 and an
extraordinary military budget together
with various legislative bills. In view
of the gravity of the situation, we
hope you will co-operate in deliberat
ing these bills and do your share in
the conduct of state affairs."
Japanese Foreign Office Staff,
Showing Relief, Witnesses
Br the Associated Press.
TOKIO, Dec. 28 (Sunday).—Am
bassador Joseph C. Grew today pre
sented the United States note accept
ing Japan's reply to protests on the
bombing of the gunboat Panay to
Foreign Minister Koki Hirota.
The entire staff of the Japanese
Foreign Office was present, wreathed
in smiles and apparently greatly re
lieved, when Mr. Grew delivered the
The only aftermath of the bombing
of the Panay and three Standard Oil
Co. vessels December 12 in the Yangtze
River still to be settled, it was be
lieved, would be indemnification.

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