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Supercilious Mandarins set aside for the foreign devils of Shanghai a separate area, eventually enlarged to a long strip of mud flats and pestilential swamps on the elbow bend of the Whangpoo River. Here separate concessions were established by Britain, the U. S., France. The French Concession has remained a separate entity, the other two combined in an International Settlement governed by a mixed commission to which other nations, including Japan, were later admitted.
On that swamp land there has risen the sixth largest city in the world. Around the international kernel has grown a Chinese city of nearly 4,000,000. souls. Just outside the city at Hungjao airdrome (see map) occurred the incident which started the war. There two Japanese sailors were reported murdered early this month, whereupon Japanese Admiral Hasegawa promptly demanded indemnity and the withdrawal of Chinese troops to a distance of 20 miles from the International Settlement. When the Chinese expressed distaste at being ordered out of their own country, the Japanese piled sailors ashore to reinforce their permanent garrison and the fighting began.
At the corner of the famous Bund which skirts the Whangpoo, and Nanking Road, heart of the section where Americans congregate, the sky fell fortnight ago when a Chinese air bomb intended for the Idumo fell, plunk!, into the Palace Hotel (No. 10 on the map). Another, a mile away, snuffed out 500 lives when it plunked into the Great World Amusement Palace, crammed with gibbering Chinese.
Concentrating their forces last week in the Hongkew section, the Chinese drove down towards the river through the eastern extension of the International Settlement, until the Japanese warships opened fire to support their forces on land. Across the river on the right bank other Japanese troops tried to push back Chinese defending forces. Down from the Bund through this crossfire Americans were ferried to the mouth of the Whangpoo where ships picked them up to carry them to sea and safety. Meantime Admiral Harry Ervin Yarnell placed the U. S. S. Augusta (see map) so as to give maximum protection to the western half of the International Settlement where the remaining Americans and British were seeking safety. And the battle went on: a major engagement with approximately 100,000 Chinese and 60,000 Japanese troops involved, with the Japanese fleet of 50 vessels swollen this week to 82, not counting scores of transports arriving almost hourly at the mouth of the Yangtze.
There was good reason to believe that it was no part of the original Japanese plan to become involved in this desperate Shanghai engagement. Their original land-grabbing intentions were confined to the Peiping area and they had every reason not to waste ammunition and divide their strength by taking on another battle in Shanghai. Whether the navy's Shanghai move was a blunder, or whether the Japanese demands were a bluff which the Chinese called—perhaps more out of excitement than shrewdness—the result was a war big enough to endanger Japan's precarious economic structure. For the longer the war lasts, the greater, almost inevitably, will be Chinese defeats, but the greater also the danger of economic collapse in Japan.