Shanghai, China December 12, 1937

In 1937 the Chinese city of Shanghai, a city of 3 million people, domi­nated the coun­try eco­nom­i­cally. Located on one of the many trib­u­taries of the Yangtze River, Shang­hai was a “treaty port” (i.e., open to foreign traders) on the East China Sea. Then as now the Yangtze River basin com­prises one-fifth of the land area of China, con­tains nearly one-third of the national pop­u­la­tion, and is China’s agri­cul­tural mother­lode. Half the country’s inter­national trade passed through Shanghai port.

Because of Shanghai’s importance as a center of com­merce, the United States, along with other major Euro­pean powers, con­cluded treaties with local and national autho­ri­ties and placed gun­boats on the Yangtze River as early as the mid-nineteenth century. At the turn of the 20th cen­tury, expanded U.S. interests in the area prompted the U.S. to create an Asiatic Fleet to pro­tect its trading interests in the Asia-Pacific region and establish a Yangtze River Patrol that, by the out­break of the First World War, pro­tected Amer­i­can eco­no­mic and com­mer­cial interests (among them Standard Oil) from feuding Chinese warlords, bandit gangs, and pirates.

In the 1920s the U.S. commissioned and placed six new Chinese-built, shallow-draft gun­boats on the Yangtze capa­ble of traveling 1,300 miles up­stream. One was the 474‑ton Panay, a 191‑ft ship armed with eight .30-cali­ber machine guns and two 3‑inch deck guns fore and aft. The Panay had a crew of five officers and 54 enlisted men.

Following years of diplomatic and military incidents over Japan’s efforts to secure access to Chi­nese raw mate­rial reserves, food, and labor beginning with that country’s take­over of Man­chu­ria in North­east China in 1931, Japa­nese forces attacked Shang­hai on August 13, 1937. After securing con­trol of Shang­hai, the Japa­nese moved up the Yangtze to Nan­king (Nan­jing), the capital of Nation­alist Chi­nese leader Chiang Kai-shek; they reached the city’s out­skirts on Decem­ber 1. Thirteen days later the Japa­nese had driven the Nation­alist army from Nan­king. The infamous Nan­king Mas­sacre of Chi­nese civil­ians and dis­armed com­bat­ants, esti­mated to be between 40,000 and 300,000, started that day and lasted six weeks.

Meanwhile, in early December 1937 the USS Panay left war-torn Shang­hai for Nan­king to remove the remaining Amer­i­cans from the Chi­nese capital. Lest the U.S. gun­boat be mis­taken for an enemy vessel (the U.S. was neutral in the con­flict), the Panay’s captain draped Amer­i­can flags across the boat’s upper deck; a large 6‑ by 11‑ft flag flew from the boat’s mast. Docked at Nan­king on Decem­ber 9, the Panay took on board eight Amer­i­cans, four of whom were embassy staffers, and nine others, including two jour­nalists and two news­reel camera­men. On Decem­ber 11 the Japa­nese began shelling near the loca­tion of the Panay, three Standard Oil barges flying Amer­i­can flags, and two motor sampans that were there to help Standard Oil employees and agents escape the con­flict. The Panay, barges, and sampans quickly moved seven miles upriver.

On this date, December 12, 1937, shrugging off a shake­down attempt by a Japa­nese naval officer wanting infor­ma­tion about the dis­po­si­tion of Chi­nese armed forces along the river, the Panay and con­voy dropped anchor 27 miles north of Nan­king. The Panay’s cap­tain con­tacted Amer­i­can author­i­ties to alert Japa­nese author­i­ties of the ships’ new loca­tion. At roughly 1:40 p.m. three Japa­nese carrier attack bombers, joined soon by a dozen-and-a-half dive bombers and fighter planes, began dropping bombs and strafing the Panay and its con­voy. The unpro­voked and wanton attack put the gun­boat out of action, caused it to settle on the river bottom, and set two of the three oil barges ablaze. Killed on the Panay were 2 crew­men and 1 pas­senger. Casual­ties numbered 43, including 11 offi­cers and men seriously wounded. The captain of one of the oil barges was killed as was a number of Chi­nese passengers before the Japanese warplanes left the scene.

USS Panay and the U.S. Navy’s Yangtze River Patrol

USS Panay: Map of Yangtze River Basin, China

Above: Map of China’s Yangtze River. From Shanghai the Yangtze’s watery hinter­land stretches nearly 4,000 miles to the south­west before swinging north-north­west. In the 1840s the United States, other Euro­pean powers, and, after 1895, Japan carved out extra­terr­itorial con­ces­sions out­side the walled city of Shang­hai, which was still ruled by the Chi­nese, and floated patrol ships on the great water­way. Citi­zens of many coun­tries and all con­ti­nents came to Shang­hai to live and work during the ensuing decades. By 1932 Shang­hai had become the world’s fifth largest city, home to 70,000 foreigners, and had become the pri­mary finan­cial hub of the Asia-Pacific region. Only Man­hatt­an had more sky­scrapers than Shang­hai. But in that same year the Japa­nese, supported by ships, war­planes, and 100,000 troops, used an anti-Japa­nese inci­dent to expand their influ­ence in Shang­hai. In May a cease­fire agree­ment made the city a demil­i­ta­rized zone and for­bade the Chi­nese to garri­son troops, excepting a small police force, in the city and sur­rounding areas while allowing the pre­sence of a few Japa­nese units in the city. In August 1937 the Japa­nese used Shang­hai as their launch­pad to over­throw the Nation­alist Chi­nese govern­ment in a pro­tracted tug-of-war that only ended in Sep­tem­ber 1945 with Japan’s unconditional surrender to the Allies.

USS Panay on patrol on China’s Yangze River USS Panay partially submerged in Yangtze River after December 12, 1937 attack

Left: When the battle for Shanghai erupted in August 1937, Chiang Kai-shek’s Nation­alists held out for three months before the Japa­nese forced them to abandon the city. The Nationalists even­tu­ally relocated to Chong­qing (Chung­king), 1,300 miles upriver. As the Japa­nese approached Nan­king, the then capital of China, the U.S. Embassy evacu­ated the bulk of its staff aboard the USS Luzon, a slightly larger gun­boat than the aging Panay. Lt. Cmdr. James J. Hughes, skipper of the smaller of the two gun­boats, was ordered to retrieve the skele­ton staff, which included the U.S. ambas­sa­dor to China, remaining in Nanking, plus any Amer­i­can and foreign nationals who wanted to flee the city. Hughes was severely wounded in the thigh when the first Japa­nese bomb hit the Panay’s pilot­house on the sunny and clear after­noon of Sunday, Decem­ber 12, 1937. Shortly after­wards the gun­boat’s exec­u­tive offi­cer was rendered speech­less by a shrap­nel wound in his throat and com­mun­i­cated his orders to the crew in pencil on the bulk­head and navi­ga­tion chart. To crew and pas­sen­gers on board, it was obvious that the two Japa­nese air strikes (one bomb run and a 20‑minute strafing attack) were delib­er­ate: the enemy pilots were flying low enough to clearly see the Amer­i­can flags on the stern’s mast and lashed across the boat’s upper deck and their faces were clearly recog­nizable by those on the ship’s deck. Uni­ver­sal News­reel camera­man Norman Alley and Fox Movie­tone Eric Mayell grabbed their cameras and filmed the air strikes. (See YouTube video below.)

Right: Once the survivors of the attack reached a small Chinese fishing village they raised the alarm. In the mean­time, two boat­loads of Japa­nese soldiers had boarded and then quickly left the sinking Panay. U.S. and British gun­boats rushed to the scene, including ships and search planes from Japa­nese autho­ri­ties who appeared shocked and confused by the inci­dent. The release of the two camera­men’s film on Decem­ber 19 gave the lie to the fiction that the Japa­nese had been targeting Chi­nese fleeing Nanking in troop trans­ports. U.S. Navy inter­cepts of Japa­nese radio mes­sages to the incoming war­planes on Decem­ber 12 also showed that the attack on the Panay was inten­tional. Indeed, earlier that same day Japa­nese gun crews were reported to have opened fire on the Royal Navy gun­boat HMS Lady­bird, killing a sailor and wounding several others. A British mer­chant ship and four other gun­boats were also fired on. Con­tem­porary ana­lysts and Amer­i­can news­papers, as well as later histo­rians, put forth one argu­ment that the Panay inci­dent was most likely launched by radi­cal ele­ments with­in the Japa­nese mili­tary that were trying to pro­voke war with the U.S. Another argu­ment was that the same radi­cal ele­ments saw the inci­dent as a way of forcing the U.S. to with­draw its presence from China. Presi­dent Frank­lin D. Roose­velt accepted Japan’s apology for the unhappy inci­dent and the $2,214,007.36 indem­nity paid to the U.S. Trea­sury in April 1938. Thus the matter was closed. For the moment at any rate.

Rare Newsreel Footage by Universal Cameraman Norman Alley of Japanese Bombing of Nanking and USS Panay, December 1937