1938:
Japan continues to make substantial progress in China, whose central government remains weak and unable to coordinate effective resistance. By the middle of the year, most of northeastern China is under Japanese control, as is the entire Chinese coast.
The Imperial Parliament, in what is seen as its first major decision, orders that reinforcements be sent to the British garrison in Hong Kong with a brigade of Gurkhas and an Australian battalion. It is hoped that such a garrison could withstand a Japanese attack until the arrival of a relief force from Singapore.
Russia, while ignoring British suggestions that they coordinate their respective responses to the Sino-Japanese War, views the situation with concern. They strongly oppose further expansion of Japanese power in East Asia. As a result, they reinforce their army in Siberia and begin sending weapons and supplies to the Chinese.
Imperial Prime Minister Allsebrook and President Garner hold a conference in the Azores, the main subject being the continued Japanese aggression against China. Allsebrook is disappointed at the withdrawal of the American fleet from the Philippines, but Garner says the decision cannot be undone. Concern is expressed that Japanese annexation of large parts of China would allow them complete domination of East Asia, and measure are discussed to deal with the situation.
Allsebrook also must address the issue of Dominion status for India. The Indian National Congress and the Muslim League have become politically quite adept through the elected regional councils and all observers aside from some Nationalists in Britain are of the opinion that the political infrastructure is in place for complete self-rule.
However, the critical issue immediately becomes India’s representation in the Imperial Council. As seats are allocated proportionally by population, it immediately is obvious that India would completely dominate the political framework of the Empire, since her population alone is far larger than that of Britain and the Dominions put together. Also at issue is the status of the Princely States, which are not technically part of the British Raj but are independent states more or less bound to it by treaty.
Nehru convenes a all-party summit in Delhi, with representatives of the Imperial Council in attendance as well. Both the Indian National Congress and the Muslim League wanted a constitution that would limit the Indian franchise to the educated classes, as they feared the emergence of populist factions. Some wanted this simply out of a desire to hold power in a self-governing India, whereas others feared that India would tear itself apart without such a restriction. Others, however, demanded universal voting rights, while some attendees did not want India to have anything to do with the Imperial Council or the British Empire. The conference broke up in some disarray, without anything substantive having been decided.
Allsebrook responds by creating a special committee, with one representative each from Britain, each Dominion, the Indian National Congress and the Muslim League. To chair the committee, he chooses Lawrence Dundas, 2nd Marquess of Zetland. Some Liberals oppose this, as Dundas is a Conservative, but others view it as a wise decision considering his long experience with Indian affairs and the respect in which he is held by most Indian leaders. This becomes known as the Zetland Commission.
1939:
After Japan ignores a combined British-French-American communiqué calling for a withdrawal from China, the Three Parties (as they declare themselves in reference to Japan) announce two strong measures. They boycott the shipment of fuel oil to Japan and they begin sending weapons and supplies to the Chinese through Burma.
With Russian oil already cut off, Japan is faced with a severe crisis. America and the British-dominated Middle East had been their major oil suppliers. Without access to the oil under their control, the Japanese will be unable to prosecute their war against China. And with Russian and Allied supplies now reaching the Chinese, the resistance in China is increasing in effectiveness.
Some of the more vehement militarists in Japan think the answer lies in a naval offensive the south, so as to capture the oil-rich Dutch East Indies. This would also involve the destruction of the British-French fleet in the area and possibly a later battle with the Americans. Many in Japan relish this possibility, but the more sensible members of the government think it is madness. The idea that Japan could win a war against the combined might of the British Empire, France and the United States, with Russia possibly joining in as well, is considered absurd.
The Zetland Commission continues the long, laborious process of deciding how to raise India to the level of a self-governing Dominion. Suggestions that India accept a higher ratio for its population in determining proportional representation (the suggested formula being 75 Indians for one Briton) are dismissed by Indian representatives as implying that Indians are lesser creatures than Britons. Instead, strict proportional representation will have to be dumped altogether, and each Dominion allocated a certain number of representatives based upon their “overall influence in Imperial institutions,” a phrase which can obviously mean whatever the Imperial Council wants it to mean. Discussions continue.
1940:
Military planners in Japan conclude that they cannot hope to win a war in the present situation. The combined Pacific Fleets of the British, French and Americans are roughly equal to the Japanese fleet, and reinforcements would be dispatched from Europe and America at the outbreak of hostilities. Furthermore, Japan is diplomatically isolated, with Russia threatening it from the north and no allies willing to support Japan.
Japan knows it cannot prosecute the war in China without access to proper oil supplies, which have progressively been cut off. It seeks to end its diplomatic isolation by approaching Russia with a proposal for dividing China between them: Japan would get Manchuria and eastern China, while Russia would get western China. The Japanese point out that this would allow them to threaten British India in the event of a conflict between the two powers. After some consideration, Russia rejects this offer, as their interests in China are mostly focused on Manchuria.
In the summer, Japanese forces reluctantly go on the defensive in China, unable to maintain major offensive operations without sufficient fuel supplies.
The Zetland Commission issues its final report, calling for India to be raised to the level of a separate Dominion within the Empire and be governed by a Westminster-style parliamentary system. The Imperial Council itself shall be reformed, with each Dominion having a certain proportion of members. For every 10 members Britain itself has, India shall have five. Canada shall have four, South Africa and Australia shall have three, and New Zealand two. On the important committees, the Imperial Defense Committee and the Imperial Trade Committee, each Dominion shall have a single seat.
The debate over the Zetland Report grips the Imperial Council for many weeks and becomes a major topic of conversation throughout the Empire. In the end, though, it is accepted by a wide margin. Elections to the Indian Parliament (which is to be called the “Lok Sabha” of “House of the People”) are scheduled for the following year, and King Edward VIII is preparing to make an extensive tour of India to celebrate the achievement of Dominion status and open the first session of the Lok Sabha.
Skirmishes along the Turkish-Armenian border continue.
In U.S. Presidential elections, Republican Charles McNary, formerly the Majority Leader of the Senate, defeats President Garner, who had attracted substantial opposition for breaking the tradition against seeking a third term. Republicans now control the White House and the Senate, but Democrats control the House. In both parties, generally moderate views prevail.