MORNING PRESS NEWS 
2 AUGUST 1938 
FOREIGN NEWS 
Hendaye 
A terrific battle raged today along the Ebro River on the 
Catalan front as the Rebels launched a strong counter at- 
tack to drive the Loyalists back across the river. Rebel 
dispatches boasted that the Loyalists were suffering heavy 
casualties under the combined air, artillery and infan trjr 
attack of the Insurgents. The intense heat in which the 
battle was being fought took a heavy toll on both sides. The 
Rebel counter attack was begun after the arrival of thousands 
of fresh troops and huge quantities of artillery from the 
leruel-Sagunto front. The Rebel drive toward Valencia has been 
delayed while the Rebels turn their attention to stopping 
the offensive launched by the Government forces last week 
along the Ebro River. A new government offensive was reported 
from the nor them Catalan front where the Rebels hold^the Hydro 
Power Stations that supplied Barcelona with power. The Rebels 
claimed that the now Loyalist attack had been stopped. 
Tbkio 
Japanese officials tried today to minimize the seriousness 
of the Soviet air raids over Manchukuoan and Korean border 
territory. The Japanese claimed to have shot down five of 
the 50 raiding planes. The Nipponese reported . that there 
had been no Japanese casualties. Japanese officials also 
said that only minor damage had been Inflicted by the bombings 
which were directed at the railroad In Korea and at Changkufeng 
on the Manchukuoan border. Reports from the trouble. zone were 
conflicting in their statements regarding Soviet activity 
aldng the border. Some reports said the Russians were moving 
strong reinforcements into the area. Others announced that 
the Russians were withdrawing from the disputed territory. 
Japanese government leaders decided upon a purely defensive 
policy at a series of conferences today. Government spokes- 
men said however, that Japan was prepared to take a firm 
stand if the Soviet Union" adopted a provocative course. The 
Tbkio government is waiting for a reply to the protest which 
its Ambassador at Moscow was directed to make at the Soviet 
Foreign Office. In view of the rejection of its previous - 
protest over the presence of Soviet troops at Changkufeng, 
Moscow was expected to turn down the -new note; Japanese 
foreign office officials were hoping, however, that the .pro- 
test would open the way to negotiations to settle the dispute . 
Montpelier. France . 
The Fouga Engineering Works was requisitioned by the Govern- 
ment Saturday for Army use after the company refused to ac- 
cept a government arbiters decision ending a strike. 
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