1941-07-07 — Page 1

"Hongkong Daily Press," July 7, 1941.

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DOLLAR TT-1s. 2fd. T.T. NEW YORK.—244.

OK Hongkong Daily Press.

The Batter SAUCE

Registered as a Newspaper at the General

報西

ESTABLISHED 1857

# #

Post Office in the United Kingdom.

No. 25814

DEAR IS AN AERISTEX=M

HONGKONG, MONDAY, JULY 7, 1941.

CHINA'S FINANCIAL FRONT AFTER

ECONOMIC STRUCTURE IN PROTRACTED HOSTILITIES MORE CONDUCIVE TO THE CONSERVATIVE POLICY OF

OF MILITARY AND FINANCIAL RESISTANCE-DR. KUNG Chances of Ultimate Victory Depend Mainly On Playing For Time

* IN THE PRESENT HOSTILITIES, CHINA AND JAPAN ARE POLES APART IN BOTH THEIR MILITARY STRATEGY AND FINANCIAL POLICIES. Being primarily an agricultural nation with abundant hidden wealth, China's economic structure in pro- tracted hostilities is more conducive to the conservative policy of military and financial resistance, and the chances of its ultimate victory depend mainly on playing for time For and on the co-ordinated development of personal and national productive power. China, this is the logical wartime policy from the standpoints of both military strategy and financial power," said DR. H. H. KUNG, MINISTER OF FINANCE, in the course of a statement, entitled "China's Financial Front After Four Years" issued on the eve of the fourth anniversary of the Sino-Japanese War.

The full text of Dr. Kung's statement is as follows:

HEAVY OUTLAYS REQUIRED FOR

WAR RELIEF PURPOSES

The problems and difficulties confronting China's wartime Onances are numerous. Ways and means have to be found for meeting a war budget several times larger than peacetime expenditure Heavy outlays are required for war relief purposes arising from the enormous destru Lion of life and property both in the front, and in the rear. Still larger funds are to be provided to accelerate recon- struction projects essential to national defence and re- habilitation. The nation's Anancial and economic re- sources have to be mobilised and co-ordinated in order to overcome the wartime difficulties hampering the normal development of trade, industry, mining, agriculture and communications. Sound financial measures have to be adopted to assure the maintenance of the stability of the nation's currency and eredil structure.

"New Laxallon could not be expected to replace imme- diately the losses China's public finances have suffered from the seizure and destruc- tion of its revenue sources by the invading forces. Since China has not yet developed a relatively productive system of direct taxation, elasticity of tax yield is difficult to oblain even under normal conditions. China having a low capita wealth, people's tax-paying capacity could not be increased over- night to meet the country's urgent needs. Lack of full Jurisdiction over

the

foreigners

DR. H. H. KUNG

and in the foreign conces-

to finance their military needs sions and settlements has

hoping to altain a quick and de- added to China's difficulties cisive victory: and (2) countries

WILL JAPAN TAKE

THE PLUNGE?

LONDON, July 6 (Router) The Far Eastern situation is receiving increasing attention in London, says Reuter's Diplo¬ matic correspondent.

He adds that the frequent Japanese Cabinet meetings, Mr. Matsuoka's careful speeches and the veiled threats in Jap- anese newspapers against the N. F. I seem to portend an early crisis, but whether Japan, under Axls pressure or spurred by her own atras, wil; take the plunge, is still doubted.

ITALIAN CRUISER

SUNK

An Italian èruiser (10,000 tons),

of the Zara Class, was sunk by a submarine of the Mediterranean

Fleet on June 29, according to an Admiralty communique.

The cruiser had a complement of 700, with two aircraft, eight 8- and 12 3.9-in. guns, as well as A.A armantent and torpedo tubes. The communique states that the cruiser was with another cruiser, in company with four destroyers, when she was hit by two torpe- dues and her magazine blew up.

LORD HALIFAX

Lord Hallfax,. the British- Am- bassador to the United States," 16. returning to London shortly for a chat with his colleagues on the War Cabizēt.

FIRST AUSTRALIAN MINISTER TO CHINA Sir Frederir Eggleston has been appointed first Australan Minister to China.

He

and was Attorney-General Solicitor-General in Victoria from 1924 to 1927 and was Chairman of the Commonwealth Grants Com- mission in 1934.

16-10 Marina House, Queen's Road Central G.P.O. Box No. 1

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FOUR YEARS REVIEWED

CHINA'S LEADERS

Generalissimo Chiang Kai-shek and Madame Chiang pictured with a number of foreign correspondents in China's war-time capital.

Confidence Behind

Review By Chinese War Minister

HONGKONG CHINESE RENEW LOYALTY TO CHIANG

BROADCAST BY MR. M. K. LO

our

"As we remember the ser- vices of our

women behind the front--we inevitably think of our great men defending thai front and

great leader, Generalissimo Chiang Kai-shek. To him and his brilliant helpmate and wife, we send our deepest respect and affection renewed affirmations of loyalty, our love of our country and de- votion to her cause.

"To our gallant soldiers, we pay tribute to their valour and honour their undying heroism. May they and our leaders gu on from strength to strength and may God guide and protect them until the dawning of the great day of vie-

CHUNGKING, July 6 (Beuter}~Confidence Hes behind the state-tory!"

ment made today by GENERAL HO YING-CHIN, WAR MINISTER, Thus spoke the HON. MR. LO reviewlug lite - Lingalananese situation on the occasion of the 4th MAN-KAM, C.B.E, when he broad- annivesary of the outbreak of the China War.

"Despite every attempt by the declared: "We have over 300 Japanese to break through in re- divisions with 5,000,000 soldiers in cent months." he declared, "we are the field and 10,000,000 more in re- holding firmly the line, from the serve or in training behind the North to the South. of 2,800 miles" lines.

General Ho estimated that "Over 1.100.000 guerillas are up to the end of 1940 Japanese harassing the enemy garrisons and losses in China exceeded lines of communication while more 1,600.000 killed and wounded. than 600.000 regular troops are Referring to the strength of the operating behind the Chinese Army, the War Minister lines."

DANGERS OF JAPANESE DRIVE

SOUTHWARDS

THE TIMES:

EMPHASISED

BY

ABOUT TO MAKE ANTI-SOVIET

MOVE WHICH IS NOT

LONDON, July 6 (Reuter)-The dangers of a Japanese drive southwards and the need for Britain to watch developments there were emphasised by the Diplomatic cor- respondent of THE TIMES.

The correspondent says: "NEWS REACHING LONDON IN THE PAST FEW DAYS HAVE SUGGESTED THAT JAPAN IS KEEPING UP THE DRIVE SOUTHWARD AND IS SEEKING AIR AND NAVAL BASES IN SOUTHERN INDO-CHINA AND THAILAND. Nothing is known for certain but the speeches of Prince Konoye and Mr. Matsuoka at the beginning of the week hinted that Japan was about to make a move which would not be anti-Sovlet."

Borneo

The Diplomatic correspondent of

AIR LOSSES

Japanese

Cont'd Page 7, Col. 5

Americans Answer British Call

LONDON, July 8 (Reuter)—The NEW YORK SUN, writing on June 30, said, "Americans trom every State in the Union are answering the British call for non-combatant clvillan technical corps.

In the four years of war the Chinese have succeeded in destroy- | ing over 1.000 Japanese aircraft,

"Applicants m the first contin- according 10 official figures re- leased by the Chinese Air Force, gent of volunteers are expected to Of these, 321 were claimed to have sail from an unnamed Canadian been shot down by Chinese planes, port. They will comprise radio tech- 290 destroyed on ground, 170 shot, nicians, metal workers, electricians, down by A.A. fire, 136 shot down mechanics, machine tool setters and by ground forces, 97 destroyed by operators, workmen skilled in bulld- guerillas and 45 crashed behind or ing and maintaining marine en- close to the Chinese lines.

gines. The majority will serve as These figures. It is added, do not radio locators. include Japanese planes damaged "More than 3,000 applications were and unlikely to have returned to received during the first week of their buses nor those lost in acci- recruiting, and each mall brings dents behind the Japanese lines. in scores of others. Applications Fifty-four Japanese airmen were have come from people from every taken prisoners by the Chinese, it station of life".

further claimed, while more than 1,200 dead Japanese airmen were found.

is likely to renew the offensive some time this summer.

RENEW OFFENSIVE

In this connexion, it is pointed The correspondent points, that an arc drawn from them, with

Outside the few surprise attacks out that American air volunteer out that Japan has the right|2 radius of 750 miles, cuta the the DAILY TELEGRAPH says that by the Chinese bombing squadrons, pilots are at present on their way and a close watch is being maintained the Chinese statement reveals the to China from the United States in enforcing rigid measures with rich resources generally pre- to pass troops through Nor- Philippines, North

Malaya and that from the southern-in London on developments of Chinese Air Force is at present re-under the programme of American of financial control such as ter cautious conservative methods thern Indo-China

has mcst point of Thailand, Singa- Japanese policy following Germaining Inactive but predicted. It aid for China. adopted by other countries at! of war financing with minimum increased her influence in pore is only 350 miles away.

danger to nationa) recovery in Indo-China and Thailand.

war.

PRIMARY PROBLEM * "Obviously, the primary problem

order to achieve ultimate victory after a protracted struggle.

Cont'd Page 7, Col. 1

and

He says that both Indo-China and Thailand have valuable har- bours, particularly Camranh, and

of China's wartime finance is to i raise funds to provide the sinews of war as well as to meet the de- mands of war relief and accelerate various projects essential to na; tional defence and reconstruction

"There are, as a rule, Ioar prin- ! cipal methods of war financing: mamely, voluntary contributions, in- | creased taxation, loan flotation and SINGAPORE, July 6 (Reuter)—Overseas Chinese are undeceived by note-issue expansion,-aside from the Nipponese declarations of "sinoere friendship,” said · DR. LIM those of requisition, mobilisation of BOON-KENG broadcasting from Singapore, on war fund reserve and conversion of Chinese in Malaya, a message to Chungking. state properties. Although China, He said overseas Chinese fool saddest and--horrified-when--they like any country at war, has re-

think of the terrible disasters and holocaust of human Ilves in the sorted to these usual means the invaded territories of their fatherland. fundamental feature of its finan-

Consequently, men, women and even children feel it their duty clal policy should be noted. Study of wartimo nancial policles of

la make utmost sacrifices in order to contribute for help and different countries shows that, comfort of the victims of war.

Chinese In Malaya Send Message To Chungking

behalf of overseas

with divergent backgrounda and Chinese throughout Malaya and elsewhere abroad have greatest objectives, they may be divided confidence in their compatriots at home never to think of sny com- into two groups: (1) countries | promise in yielding untii victory is mohloved because they know the. *With Anited natural resources nation le fighting for the defence of righteousness and democratie

usually rely on reckless expedients freedom as England is doing in the West..

-On Other- Pages

Page

2-Lawn bowls: Aquatle gala at Lalchikok; Big baseball upset; Bicycle racing con- test. 3-Radio programmės; Coming eventa: Crossword puzzle, Findings of Chungking tun- nel tragedy; Sweden's apo-. logia; British bomber offen- sive centred on Krupa artament factory; Air losses in June, 5-Decrease recorded in visible trade of Colony; No men to leave KK.; To aid China's

many's attack on Russia and it is recognised that Japan has consi- derable military forces available in Formosa, Hainan Island and Nor- thern Indo-China.

WILL PONDER

It is hoped in London that Japan will ponder well before taking any action that was bound to constitute a threat to British Interests in the Far East, a threat whigh could not be overlooked.

seems evident, the correspon- dent concludes, that Germarly has strongly urged Japan to return to active collaboration with the Axis

Big Counter-Attacks

By Soviet Troops

MOSCOW, July 6 (Reuter)—Soviet troops on Saturday launched three big counter-attacks—one in the North against German forces alming toward Leningrad, and two further South against two main prongs of the German pincer movement along Napoleon's road to- ward Moscow through Smolensk,

A Soviet War communique issued previously succeeded in crossing and that strong influences are at in the early hours of Bunday and where the Germigna were do- work in Tokyo almed at securing morning states German troops veloping one of the main pitcer advantages for Japan trom the have been hurled back from the movements. latest development of the war town of Ostrov in the railway from

A third Russian counter-attack situation.

Dvlsk toward Leningrad,

in took place Alerce fighting Hundreds of Nazi tanks and around Borisov on the Beresina

The Soviet Air Force raided the .........ÜHUNGKING, July 0 (Heuter)--.

FORCED BACK

Rumanian Black Bea (portabl Twenty-seven Japanese: alreraft At Poltak,, 136 miles north-west Constanka and Bulina as well as heavily bombed the western of molensk, the Soviet counter the Russian off pipeline in the suburbs of Chungking Yesterday attack forced back the Nasl forces centre of Ploestl

Borose the River Dving, which they Cont'd Page 7; Col. 7

transportation problems: CHUNGKING RAIDs of motored infantry were River, east of Minsk,

destroyed.

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