France Decides to Create a National Institution
The fact that China and Japan were now fully at war was rammed home to Britain when its ambassador to China Sir Hughe Knatchbull-Hugessen was severely wounded when Japanese aircraft attacked his car. The incident was taken as proof of Japan’s dubious and aggressive motives. It is improbable that the tack was intentional but the car was flying a Union Jack but to a public unschooled in the realities of a modern battlefield (as most were) this was presented as a deliberate provocation.
The collapse of the Spanish Republican position in the Basque country continued apace as the city of Santander surrendered to the Nationalists. The Nationalists had overwhelming military superiority but Franco accepted the advice of Mussolini that a negotiated surrender would be a greater propaganda victory. It would also avoid – Mussolini hoped – a repetition of the savage reprisals that had followed the fall of Malaga. Franco promptly reneged on his promises and Republican prisoners were slaughtered wholesale after sham judicial procedure.
The Camille Chautemps government in France is often seen as a return to capitalist normality after the collapse of the bold experiment of Leon Blum’s Front Populaire but it did nationalize the country’s railway system, by bringing together a clutch of private regional companies to create the SNCF (Société Nationale des Chemins de Fer). Initially the state held 51% but it soon became the emblem of France’s state-controlled economy, a status it retains to this day.