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Show iiniA ,ffi BLOCK PEACE PLAN Japan Rejects One Provision of U. S.-Hritish Proposal; Will Hold Manchuria Gains; Premier Makes Statement. TOKIO, Japan, Fob. 3 CU.R) ( Copy right) J apa n today rejected the fifth provision in the identical American and British notes designed to restore re-store peace in China. The provision called for settlement set-tlement of all outstanding controversies in China in the spirit j of the Kellogg pact outlawing war, and such a settlement would have meant loss of Japanese gains in Manchuria. The rejection based on the fact Manchurian troubles would be included in-cluded by the provision, threatened to block efforts of world powers, led by America and Britain, to stop warfare in Shanghai which threatens threat-ens the peace of the world. The first four proposals in the notes were conditionally acceptable, accept-able, the United Press was informed in-formed officially. Japan, however, reserved the right to protect Japanese nationals with Japanese troops, it was emphasized., em-phasized., CHINA IS WILLING NANKING, Feb. 3 (U.P) Official acceptance of the American and British proposals for peace in China was announced, by the foreign for-eign office today. The announcement said China was ready to arrange for negotiations negotia-tions with Japan to withdraw their troops and establish a neutral zone around Shanghai, to br pr trolled by foreign forces. Fighting was continuing in 1 Shanghai, with Chinese reporting successes. INIIKAI'S VIKWS TOKIO, Feb. 3 (i;.Ri (Copyright) Outstanding points made by Premier Pre-mier Inukai in an important statement state-ment to the United Press on Japan's Ja-pan's position in the conflict with China follow: 1. The Shanghai incident andi the Manchurian affair are entirely separate matters. 2. Both were due (o n similar cause "violent Chinese military attacks." at-tacks." 3. The Japanese did not drop bombs on the Chinese city of Shanghai or on the international settlement. 4. The Chinese, after giving definite assurances for the future to the Japanese in Shanghai, attacked at-tacked the Japanese marines in force, without provocation. 5. Japan feels that the boycott against the Japanese in China, which is driving thousands of Japanese Jap-anese out of business and out of China Is contrary to her treaty on commerce, which stimulates freedom free-dom of trade. |