The Guardian from London, Greater London, England • 13

THE MANCHESTER AUGUST 5, 1938 13 AUGUST 4, 1938 STRUGGLE ALONG IN News from Abroad LORD RUNCIMAN BEGINS HIS TASK First Meeting with Czech Ministers and Sudeten Leaders NEGOTIATIONS SUSPENDED FOR PRESENT From our Central European Correspondent ILL-TREATMENT GERMAN CONCENTRATION CAMP Growing Brutality at Buchwald 145 PRISONERS DRIVEN TO DEATH IN A YEAR From our Special Correspondent TllE EBRD Neither Side Gives BITTER FIGHTING IN GREAT HEAT The battle of the Ebro goes on. The fighting still centres on Gandesa, and largely to the north of the town. The rebels are unable to push back the Republicans the Republicans hold their ground, but of late have been unable to make any advance of note. The fighting is bitter, and is made the more gruelling by the intense heat. A Barcelona telegram received in Paris states that reinforcements for General) Franco's troops appear still to be coming "up.

Moroccan shock troops are attempting to storm the Republican positions, but the lack of roads and difficult ground are proving a hindrance. and he was executed. Of the two- AGREEMENT WITH EGYPT Cost of Barracks BRITAIN TO PAY HALF From our London Staff Fleet Street, Thursday. Before leaving London to-day the Egyptian Prime Minister, Mahmoud Pasha, said An agreement has been reached on all matters, and was initialled this morning by Lord Halifax and myself. I have been very much touched by the hospitality and friendship shown pie by Mr.

Neville Chamberlain and Lord Halifax. The friendship and goodwill which marked our conversations constitute true testimony to the cordial relations which exist between Great Britain and Egypt as allies, and the understanding now reached cannot but have the effect of rendering the relations between the two countries still more effective and harmonious. I will leave London this afternoon most gratified with the result of my visit and with the happiest memories of the warm welcome that I received and of the great kindness I received on all sides." TARIFF ON TEXTILES Mahmoud Pasha added that though no agreement had been reached yet on the subject of the Egyptian duties on imported cotton goods he had invited the representatives of Lancashire to come to Egypt in the autumn and discuss the problem with his Minister of Finance. He sincerely hoped that an agreement might be reached as the result of their visit. FOREIGN OFFICE STATEMENT The Foreign Office later issued the following statement Conversations have taken place with the Egyptian Prime Minister with regard to certain of the financial provisions of the Anglo-Egyptian Treaty of Alliance of 1936.

The Egyptian Prime Minister represented that the cost to Egypt of providing the accommodation required in the provisions of the treaty concerned had turned out to be greatly in excess of the estimate formed at the time of the signature of the treaty. An agreement has been initialled to-day, of which the principal effect will be that the British Government agree to raise their contribution to one-half of the cost of the construction of the accommodation for land and air forces, water and electric supply, amenities and convalescent camp arid the balance of the civilian The German concentration camp at Buchwald now rivals Dachau as far as the ill-treatment of the prisoners is concerned. The grisonerS number 3,500. Most of them are Social Democrats and many are Jews and "Bible students." These so-called Bibelf orscher are the most persecuted of all the Christian sects in Germany because they refuse to say Heil, Hitler," on the ground that only the Supreme Being is entitled to such an honour. There are also some S.A.

and S.S. men at Buchwald who have been arrested as being politically unreliable." The prisoners have to parade at four o'clock in the morning. They work on the roads and in the quarries. Many are in a weak condition because of the bad food, the ill-treatment, and overwork. Those who fail, in the opinion of their guards, who are S.S.

men, to do the required amount of work are punished with 25 strokes of the lash, which is a heavy, tapering thong of cowhide. These floggings occur daily, the victim being strapped on a trestle. PRISONERS' ESCAPE Last October, when two prisoners escaped, the other prisoners were made to stand on parade from six o'clock in the evening until eleven the following morning. Several prisoners collapsed and were punished by being rlonrfvpri nf fond for three davs. One prisoner, named Weinreiter, was found to oe fiiuiug in tne yesterday, and the Germans choose to speak of a deadlock in the negotiations.

But the Government's point of view is that the three laws which the Government will introduce in Parliament are only a framework, and that a compromise between the Government proposals and the memorandum of the Sudeten Germans is still possible. The negotiations are suspended only until Lord Runciman is ready to offer his services as mediator. DR. HODZA'S PLANS Dr. Hodza proposes that further negotiations should be carried out by four commissions, consisting of members of the Government coalition parties and representatives of the Germans, Magyars, and Poles, and the legal experts of these groups.

The problems to be dealt with would be divided between the commissions. The German press has renewed its violent attacks on Czecho-Slovakia, and amongst other things is trying to argue that Czecho-Slovakia must fulfil the promises which she made in 1918, when a solution on the Swiss pattern was suggested. CZECH APOLOGY TO GERMANY Airmen Punished Prague, August 4. The German Charge d' Affaires called upon the Czech Foreign Minister this morning to protest against the flight Of two Czech aeroplanes over German territory at Glatz. Expressing regret at the incident, Dr.

Krofta, the Czech Foreign Minister, said that an inquiry had established the responsibility of the Prague, August 4. Lord Runciman, who arrived in Prague yesterday afternoon, had already begun to establish his contacts this morning. He visited the Czecho-Slovak Foreign Minister, Dr. Krofta, paid a twenty-minute visit to the Premier, Dr. Hodza, and at noon had an interview with the President of the Republic, Dr.

Benes. This afternoon the four Sudeten German leaders, Herr Kundt, Dr. Peters, Herr Sebikovsky, and Dr. Schiecketanz, called on Lord Runciman. They were introduced by Mr.

Ian Henderson, who has been one of the British observers Czechoslovakia and at present is attached to the staff of Lord Runciman. In Sudeten German quarters it is emphasised that the visit was merely an act of courtesy for establishing contact. A certain amount of interest has been created in Prague by the arrival by air of Mr. Hugh Wilson, a former assistant State Secretary in the State Department in Washington and at present American Ambassador in Berlin. Though it is said that his visit is of a private nature, it has been noted that the American Minister in Prague, Mr.

Wilbur Carr, broke his holiday and returned to the capital to meet Mr. Wilson. Undoubtedly the two diplomatists discussed the Czecho-Slovak situation, in which the United States takes a keen interest, but the Legation here emphasises that Mr. Wilson's visit is not connected in any way with Lord Runciman's mission and that it was planned long before the mission was decided upon. Mr.

Wilson saw only his colleague and visited none of the important Czech politicians. The negotiations between the Czech Government and the Sudeten Germans have been postponed for the present. of the Sudeten German leaders saw, the Premier. Dr. Hodza, BIG DEALINGS IN GOLD Traffickings by Continental Hoarders From our Financial Editor GERMAN SEARCHLIGHT ON PRAGUE From our Correspondent Berlin, August 4.

"In the light of the German searchlight the negotiations with the unwanted minority (the Sudeten Germans) are being begun." These words from a leading article that will appear in the "Frankfurter Zeitung" to-morrow indicate the German attitude towards the discussions in Prague, which have entered a new phase with Lord Runciman's arrival. The appearance of Czecho-Slovak. 'planes oyer Glatz reported yesterday is held -up as an object-lesson of difficult' Czech and again 'it is-the "Frank-f urter Zeiturig which; best describes the German view when it writes Maybe they will try to convince Lord Runciman that this was an insignificant incident. But it reveals the psychology: of the Czechs. Thus they have treated the Sudeten Germans for twenty years, and thus they would treat them to-day if Germany had ret directed the full Blare of her searchlight on this questionable remnant of Versailles which has still maintained Itself in the heart of Europe." So the first stages of Lord Runciman's negotiations in Prague are London, Thursday.

The bullion market to-day transacted another large turnover in gold, to a value of about 2,400,000, after a turnover yesterday of very nearly 3,000,000. These are the amounts at the "official" dealings when the price is fixed. Outside this session about 1,000,000 more was sold yesterday, and a smaller amount to-day. The "Control" has to pro vide the great bulk of the gold sold. The Bank of England acts for it, but has not yet required, and need not for some time at all events, to touch its own gold reserves.

In recent weeks, since early July, fully 20,000,000 of gold has been bought at the bullion market fixings alone, and a considerable amount after hours. The Control has allowed a depreciation of the pound in terms of dollars from $4,953 to $4.89 during that time, and as there is a fixed dollar-gold price that price in sterling is now 1423. against lius. aa. Gold has not.

however, appreciated fully in line with the dollar, as the "Control" tor tne uanK ot actintr for it) does not now hold out for a premium on the dollar price (the premium was about cd, early in Julvl. but sells gold at the precise sterling equivalent of $35 less the cost of shipping gold to JNew yom. 'inus at the present rate of exchange the pound is freely and immediately exchangeable into gold, which can be shipped to New York and sold there against dollars without loss, inaeea, an American bank seems to be succeeding in arranging shipments to New York at a profit. The London authorities orobablv think that fewer abnormal purchasers of gold will come prisoners who escaped -one got away- altogether; the other was recaptured, and as he had killed his guard in making his escape he was handed over to the police, tried for murder, sen tenced to death, and beheaded. One morning the camp commandant asked for seven volunteers for some special job.

No one responded. whereupon five men were selected- and marched off to the front of the camp. Shots were heard. The.men were never seen again, only their clothes, bloodstained and pierced with bullets, were returned to the camp. The names of two of the victims are Bischof, a Social and.

former municipal councillor, and. Fischer. The names of the other three are The death of the lawyer Hans. Litten, which occurred at Buchwald, was reported some time ago. A load of heavy stones was tipped over him.

He was carried off- with a thigh and a damaged chest. It was of these injuries that he died. The "Bible students" are subjected to special ill-treatment. Some have undergone a so-called "German baptism" They were placed -in a barrel of sewage and asked if they still believe in Jehovah." The Bible students have shown a dour fervour in all camps and prisons, and at Buchwald they refused: to answer the question. They were then comr pletely submerged in the sewage again and again.

In the year ending last May 145 prisoners were either- killed outright or beaten to death or driven to suicide at Buchwald. forward if they need not "even pay a "premium" to get the gold here. The London Control does not have to provide the whole of the gold required out of its since in order to maintain the franc-sterling exchange the Paris "Control" is having (it is reliably stated) to sell gold to the London Control once again. These sales are not seen on the market. On the other hand, Scandinavian central banks and similar institution's may be.purchasing gold from the London" Control also without coming on to the open market.

HOARDERS The gold-takers are largely Continental hoarders, many of whom want coin rather than bullion. Gold coins are being dealt in at Amsterdam at a reported premium of 4 per cent over bullion, and there is also, a market in American eagles," here. More sophisticated Continental financiers have been buying gold shares for some days, while selling Old Consols, 4 per cent Loan, and other British securities which through tax provisions and otherwise are the Continental favourites. Most of these abnormal traffickers seem evidently to want gold in the belief that they have in it something immune from damage in case of war. One hoarder has been heard of who would not leave his gold in a particular London bank because he thought some pictorial safety regulations on the wall, of the bank were revolutionary incitements! Some of the hoarders apparently believe in an intended all-round devaluation-of sterling, dollars, and but these are probably far and few.

Consultations between Ministers have been going on all day. JAPANESE WAR OFFICE REPORTS' A communique! issued by the Japanese War Office to-night stated that the Soviet artillery had intermittently bombarded the Japanese lines all day but the position the frontier had remained At-10 a.m. the Korean village of Kojo was atecr shelled. During the. night the Soviet troops made another attempt to dislodge the Japanese from the Changkufeng and Sbatsaoaing area, but encountered strong resistance and were repulsed: Soviet howiteers, it is claimed, indiscriminately shelled Kojo and Sozait (another village in Korea) from night fall yesterday unto one o'clock this morning.

According to unofficial Japanese reports the attacking Soviet troops Consisted of about three bat taliohs of infantry supported by .15 tanks and over 20 guns. "Japan in the desire not to the-situation has not yet called her. Air Force. into action" a.War Office spokes mabL said to-day, adding: But there. a limit Id Japanese patience; and Japan will be compelled to deal-f-and iustly-so-4with the.Soviet's wanton aerial Warfare by means of AirlForce if the --Soviet persists in-ita provocative raiders had been dealt with by Japanese anti-aircraft batteries, which -s had shot down- some of theSoviet machines.

tne 'dispntewiU-be settled bir diplomatic means-gave, a stimulus the stock markets here to-day. -f Gains, of -fdm one to four yen were registered a -wide notabiy 'inj cottonand rayons shares. Press Association Foreign Special, Colour-bearers at St. James's Palace yesterday, the 24th anniversary of the outbreak of the Great War, carried a laurel wreath on the colours. STRENGTHENING THE PYRENEES Balloon Barrage From our own Correspondent Paris, August 4.

Balloon barrages are being erected by the French authorities, who are strengthening the Pyrenees frontier upon the Mediterranean side against air attacks from Spain. The measures have been taken following the bombardment of Ax-les-Thermes on June 5 by nine unidentified machines. 1 -i Rspplgnarfo i R. A JaSggj Oierana ata Ionia 6 An extended inspection of the defences of Perthus and Cerbere has been made by General Ihler, commander of the 31st Division. As a result the anti-aircraft defence batteries at Cerbere and Banyuls have been regrouped and strengthened, the existing 75's having been replaced by guns of 105cm.

A barrage of captive balloons is being set up. Steel cables nearly three miles long are attached -to the balloons, thus forming a mesh which the military authorities hope will prove impassable to aeroplanes in this area, in addition, sound-detec tors and searchlights have been erected between Port Vendres and Banyuls, near which is a dynamite factory. A torpedo-boat is also patrolling the coastline. A special warning has been given to commercial aeroplanes not to use the air route above Cerbere, since the anti-aircraft have been given instructions to open fire upon any unauthorised macmne nying over French territory. CO-OPERATION WITH BRITAIN General Hertzog's Policy Capetown, August 4.

Praise for Britain was uttered by General Hertzog, the Premier of South Africa, in a speech in the Union House of Assembly to-day on the South Africa Act Amendment Bill which provides' a twelfth member of the Cabinet. "The United party' he said, "will co-operate with Britain as long as we remain on these benches, and that will be for a very long time to come." The policy of the Nationalist party was that there should be no co-operation and no friendly relations with Britain or with anything British. The Nationalists forgot that everything had changed in regard to the British connection, and instead of South Africa's relation with Britain being one of pressure and oppression it Was to-day entirely reversed. The Nationalists, added General Hertzog, refused to recognise Britain to-day as "undoubtedly the greatest benefactor of South Africa in the last 300 years" Reuter. i GIRL SWIMS 37 MILES In Water for 17 Hours Copenhagen, August 4.

Miss Sally Bauer, a Swedish girl, aged 20, who holds ten Swedish swimming records, to-day swam the Cattegat from the north-west extremity of Zeelahd to the west Coast of Jutland in hours. It is estimated that allowing for the Current she swam 37 miles. The cattegat has been swum once before. Last year it was swum by Miss Jenny Jammersgaard, who took nr. lomiru Exchange Telegram.

GERMAN WORLD FLYER HOME BEBliK, AtXOOST 4. Captain Hans Bertram, the German who has been nying round the World by oroinary passenger services, arrived in Berlin at 10 05 to-night. LeAvine Blirrnt 12. SO a m. rm'JilIv' 18, Captain Bertram has' taken 30.

days. i nrougnoui' tne trip Jts-su usedonLv reiular and Commercial air services. Wliea he arrived here he'was exactly, twenty-four hours behind this schedule -owrng -to the: delay in tile Azores on Tuesday when tne German 'plane collided with a yacnt. Heuter. Three days after the opening of their counter-offensive the Nationalists have failed to obtain any advantage, it is added.

A Reuter message from Saragossa says that Nationalist tactics still consist in wiping out tne nepuDiican concentrations south of the river by terrific air bombardments, while the Government troops spasmodically launch desperate attacKs in tne effort to pusn tanner inland. As a result of the disruption roue i r-. of communications by the Nationalist Air Force the Republican forces are believed in Saragossa not to have been properly victualled for more, than four days. General Franco launched a surprise attack in the University City, on the outskirts of Madrid, yesterday morning. It is reported from Madrid that it failed completely.

The attacking forces are said to have left a hundred dead on the field. BOMBING Rebel war planes bombed Barcelona three times late on Wednesday night, killing two persons and injuring 22. The raids were the first for a fortnight. Thirty-six bodies had been recovered yesterday from the streets and ruined houses of the little coastal of Aguilas, south of Cartagena, which was bombed and machine-gunned by rebel planes, states a Spanish Press Agency message from Valencia. The Agency also reports that a hospital train, carrying wounded from the Ebro fiont, has been bombed and machine-gunned on its way to Barce- lona.

There were several victims among the wounded passengers. The plane, a Savoia circled low over the train, surveying it carefully, then dropped several bombs and machine-gunned it from end to end. After a few days' respite the port of Valencia was again raided three times yesterday by five three-engined bombers. The raiders dropped their bombs from a height of about 13,500 feet. Little damage was done.

PROTESTANT CHURCH AND NAZIS The Growing Tension Reports of the growing tension between the Nazi regime and the Protestant Church in Germany are contained in a letter received by a Manchester merchant from an "Aryan" German He was in Munich in June, when the Evangelical church of St. Matthew was pulled down, but is now abroad. He writes of the last service in the church and says Thousands of people were present at the service, and as they left the church at about 11 pm. the congregation sang tne nymn -a firm rock is our God. The notice came and tried to break up the crowd.

Then it developed into big demonstration against the Govern ment. Two mounted policemen were dragged from their horses and trampled on. There were 15 aeaa ana ou badly injured, and only at 12 30 when the military came was order restored. If these demonstrations continue, and unless we are involved in a war, it is quite possible that some day it will come to a complete cnange or uovern ment." CRUISER MANCHESTER Handed Over to Admiralty After Trials The cruiser Manchester left the Tyne yesterday for extensive trials, after which she was handed over to the Admiralty and proceeded to Portsmouth under the command of Captain H. H.

Bousaeld. Manchester, which was launched on April 12, 1037, by Mrs. J. Toole, has been built at a cost of 1.500,000 and has nrovided emolovment for hundreds of workmen at Messrs. R.

and W. Hawthorn. Leslie, and Company's shipyards, Hebburn, for over two years. The vessel is the last of three cruisers ordered under the 1935 naval prbgremme. The other two, Newcastle arid: Sheffield, were built on the Tyne by Messrs.

Vickers, Armstrongs, Ltd. Manchester is the seventy-second warship built by Messrs. Hawthorn, Leslie, and Company, who now have under construction a smaller cruiser of 5,000 tons, two flotilla leaders, and two destroyers. BRITISH PILGRIMS LEAVING LOURDES -khemat. Atfctrw 'hundreds of pilgrims from Salford and Birmingham went proceaaion to the Grotto to-day to bid Kotte do Lourdetf.

are leaving Lourder to-morrow morning. To-nita they took part in a proceutan of the Holy Sacrament tmf tht last time. Heuter. NO ATTEMPT TO FORCE A SETTLEMENT ON CZECHS From our Diplomatic Correspondent two airmen, who naa been punished lor not observing their instructions to remain inside the frontier. Reuter, accompanied here by a wave of heated' attacKs on Prague.

Punishment of the guilty, or the "Angriff" writes to-night, and then immediately adds that Germany "will not take' such provocations lying down." ITALY SUSPICIOUS Rome, August 4. Lord Runciman's mission to Czechoslovakia is widely commented on in the Italian press to-day. An article in -the Gazetta del Popolo suggests that the mission will be partly concerned with British commercial interests in- Centra and Eastern Europe. It states What will happen in Prague after the arrival of the Pilgrim of Peace 7 Lord Runciman is said to be accompanied by economic experts. The reason for this may be to facilitate some commercial understanding in accordance with the British" plans to penetrate the whole of the Eastern European rone.

1 But between the Sudeten Germans and Plague that is 1.5 say, between Germany and Czecho-Slovakia is essentially political. Its settlement cannot be made by economic interference on the ''part of Great Britain, which would have' the appearance of being aimed at batring the way to German Reuter. realised clearly here is that the Czecho-Slovak Government cannot be, and will not be, expected to make concessions that will directly or indirectly threaten the independence of Czechoslovakia or will weaken her as a military power. If Germany presses for concessions beyond this limit she will no longer be regarded as endeavouring to secure justice for the Sudeten Germans but as resolved oh, reducing Czecho-Slovakia to vassalage. It tsrdifficult to believe that this point! which is fully understood here, can'be wholly misunderstood in Berlihi The demonstrative nature of Germany's military preparations along the Czecho-Slovak and French frontiers and the publicity given to them the new "prohibited areas" and the order that the harvest must be brought in by August 15--have begun to create the impression that Germany wants to exercise the greatest possible influence on the negotiations in Prague by the greatest possible display of military power.

TRAINING JEWISH DOCTORS To Fill Other Berlin, August 4, The decree by which Jewish doctors will be prohibited from practising in Germany after October 1 is slightly modified to-day. by the following statement In order to avoid all social hardships the Medical Association will take steps to tiain Jewish doctors to fill other jobs, for which purpote a Special fund wUl. be placed, at its disposal. Those Jewish doctors who rf ought lh the war and are in Indigent' circumstances may. if they ate found suitable, receive ftfisnclal support train the Reich Medical Association.

This support can, neweverr oe cancelled at any personnel lor the British forces." THE MINORITIES OF RUMANIA Wide Concessions Bucharest, August 4. Important concessions were granted to-day by the Rumanian Government to the minorities living in Rumania, who form nearly one-third of the popula tion. A decree regulating the new rights- of the minorities to-day states that all Rumanian citizens with out distinction of religion, or language enjoy the same rights and security, and that the civil services are open to all. xne minorities are given the riant to usj their own language In their schools, churches, and newspapers. They will also, aominister their own schools and churches.

Mayors in villages and towns with large minorities will be representatives of these minorities, even the right to fly their own flag with the Rumanian flag being granted. A general commissioner for minorities with Ministerial rank has been appointed to-day order to supervise the application of the new regime. Reuter. TOO FEW "ARYANS" Slow Sale of Jewish Businesses Berlin, August 4. The' continued pressure on German Jews to dispose of their businesses to Aryans is leading to the position that it is becoming increasingly difficult to find persons with sufficient experience and caDital to take them over, even at the bargain prices at which they are offered.

So slow is the process of "Aryanisa-tion" that it is believed that a direct tax on capital remaining in Jewish hahds is likely. Such a measure may also-be inspired by the strained financial position of the Reicn. Jews are not at liberty to sell their Drouertv as they like, nor may they freely dispose of purchase money should a sale eventually tatte place, in most cases they are reaulred to invest it in Government issues such as the Hermann Gdrins works, which carry a meagre rate of interest. Reuter. THE LAST PREMIER OF BAVARIA Death of Dr.

Held Dr. Held, who was the leader of the Bavarian People's party and the last Premier of Bavaria, died in Berlin last night at the age of 76. Be held office from 192 till 1033. When the Nazis came to power in February. 1833.

Dr. Held and -the Catholic Centrists who supported him for some time resisted-the attempts of the Nazi Reich- Government to gain control of Bavaria, on March 10 his "resignation was "ordered'1 by Hitler. Dr. Held handed over power in jtsavana to the new Nazi Governor and his was suppressea. MAN BEHEADED 1N BERLIN BtHUH, AUGUST 4.

Wilhelm Knicftel, aged 22. of Dresden, was beheaded jBlln to-day? He had been senterice death tnllitary ennouhcemenriW execution stated teat TieajrfoyJjroung girl to assist JAPANESE REPORTS ABOUT THE BORDER CLASH Limiting the Campaign in China London, Thursday. It is now widely recognised that the Runciman mission to Prague has effectively demonstrated great interest this country is taking not only in a settlement of the dispute between the Czecho-Slovak Government and the Sudeten Germans but also in the preservation of Czechoslovak independence. There is now" question of promoting; any sort of solution as long as it' peaceful solution." "The analogy of Austria is not valid. Austria was -as good as written off by the Western before, she was invaded." Ciecho-Slovakia has not been written off.

That the Czechs will fight, and fight well, against the invader is regarded, here as certain. This alone makes the "peaceful" absorptions of Czechoslovakia by Germany -impossible. It may be that Gr echo-Slovakia will have to make further concessions to the Sudeten Germans, but one thing BRITISH HOSPITAL ENTERED Japanese Capture Wounded Shahgsai, August 4. News was received here to-day that on July 30 Japanese after mounting machine-guha at the four corners' of the British Church Missionary Society hospital at Hangchow, forcibly entered it. TheyTeaioved 103 wounded Chinese soldiers; and drove them off in motor-lorries under, armed guard; What has happened to the -Chinese Kinr ta tint ThBV WCrC men who hadkte6hWounded in the fighting; Hangchow, which Is a coastal port south-vtesT "Ttffer-SiUulghJuV and.

toe Japanesvanadf- given the hospital a writtenaihieeiHffltJarthertime to allow it tfcfe duration of Tokio, August 4. i While Soviet guns continued to shell the Japanese lines, Japan to-day proposed a truce in the hostilities which flared up last week on the disputed frontier where Russian, Maflchukuan, and Korean territories converge. In1 Tokio the Japanese Vice-Foreign Minister invited the Soviet Charge Affaires to the Foreign Office this morning and informed him of Japan's terms. In Moscow this afternoon the Japanese Ambassador and Mr. the Soviet Foreign Commissar, had two-hour talk about the terms.

The terms are Considered here to represent a compromise by Which hostilities could be suspended without loss' ot prestige by either side. An unofficial version of the terms will be found on page B.J EFFECT ON WAR IN CHINA Even if an amicable settlement of the dispute is reached, foreign observers here believe that events -are bound to have an important effect Von Japanese campaign in China. Any plans the Japanese may have had for an invasion of South China will probably have to be abandoned, whne a large-scale extension, of- the campaign after the fall of Hankow has been rendered More unlikely: Whatever Japanese officials may to the: contrary, mediation 'bfcajitmrd Power previoualyjreiected would? now find a more ready response in Tokio, According Japanese: agency the- Japaneserejeeted the Soviet counter-protest of iJast Triesday, which they described as unreasonable. Tbe Japanese protested against me -alleged action ot Soviet aircraft-in crossing the. border and bombing the "open zone in.