The decision of the League of Nations was to help the Chinese renegotiate the debt payment to the Japanese, the British even gave back Weihaiwei to China and offered like some other nations to help pay a part of the debt so that China would remain independent and the Chinese marked would remain open to them. Others like the Americans wished to do the same, but the Great Depression meant that resident Herbert Hoover had to ask the United States Congress for a $150 million public works program, to help create jobs and to stimulate the American economy first and foremost, before thinking about China to much. Meanwhile Brazil saw a armed revolution movement in 1930, a coup led by the states of Minas Gerais, Paraíba and Rio Grande do Sul, culminating in ousting of President Washington Luís on October 24, 1930, prevented the inauguration of President-elect Júlio Prestes, and ended the Old Republic. In India meanwhile the Indian revolutionary leaders Bhagat Singh, Shivaram Rajguru and Sukhdev Thapar were hanged for conspiracy to murder in the British Raj, leading the Indian Independence Movement to call the League of Nations for help in their fight for Independence, a move many in the League feared as Britain had one of the biggest empires, strongest economies and strongest member military that could easily oppose such support and even withdraw their own support for the League of Nations.
The Situation in China meanwhile worsened with the 1931 China floods, also known as the 1931 Yangtze–Huai River floods, were a series of floods occurred from June to August 1931 in the Republic of China, hitting major cities like Wuhan, Nanjing and beyond, eventually culminated into a dyke breach along Lake Gaoyou on 26 August. The fatalities varies wildly. A field survey by University of Nanking led by John Lossing Buck immediately after the flood found "150,000 people had drowned, and that this number represented less than a quarter of all fatalities during the first 100 days of the flood." The official report found 140,000 drowned and claimed that "2 million people died during the flood, having drowned or died from lack of food". A following cholera epidemic in the subsequent year, from May 1932, was officially reported to have 31,974 deaths and 100,666 cases. A popular high-end estimate of 3.7 to 4.0 million fatalities would later rise up. This meant that China's economy was severely damaged even worsening their debt situation and meaning more of the states that had offered to support the Chinese would have to give more on their own, or withdraw their support all together.
As a direct result of this payment problems and their own ambitions, the Japanese invasion of Manchuria began on 18 September 1931, when the Kwantung Army of the Empire of Japan invaded Manchuria immediately following the Mukden Incident. Some local Chinese commanders like that of the Kirin province would welcome the Japanese and announce their provinces to be annexed as territory of Japan directly, often doing so with Japanese guns pointed at their head. After the short war, the Japanese planned to established the puppet state of Manchukuo. The South Manchuria Railway Zone and the Korean Peninsula were already under the control of the Japanese Empire since the Russo-Japanese War of 1904. Japan's ongoing industrialization and militarization ensured their growing dependence on oil and metal imports from outside and the Japanese hoped to gain control over this resources areas directly or indirect themselves without relying on forging powers. With the Manchurian Invasion having attracted great international attention, the League of Nations produced the Lytton Commission (headed by British politician Victor Bulwer-Lytton) to evaluate the situation, with the organization delivering its findings in October 1932. The label of the invasion as ethically illegitimate prompted the Japanese government to withdraw from the League entirely.