When considered in retrospect, one of the most interesting phases of the recent Sino-Japanese conflict was a local condition that arose in North China between the years 1935–37, known to the Japanese as the “special trade” in China.

Following the Mukden incident of September 18, 1931, the Kwangtung Army began its inexorable march to the southward. Within two years Manchuria had been conquered, an independent “Manchukuo” had been proclaimed, and Japanese troops stood at the gates of the Great Wall. The story of Japanese penetration beyond that historic barrier is a fascinating study in diplomacy. For four years, the Island Empire sought by every means short of war to establish its position of paramountcy in North China. Intrigue on a vast scale, involving official proclamations, “spontaneous” autonomy movements, organized smuggling, threats of reprisals, and even direct military action was the order of the day.

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