The USS Panay incident was a Japanese attack on the American gunboat Panay while it was anchored in the Yangtze River outside Nanking (now spelled Nanjing), China on December 12, 1937.
Like the infamous attack on Pearl Harbor four years later, Japan and the United States were not at war at the time.
The Japanese claimed that they did not see the US flags painted on the deck of the gunboat, apologized, and paid an indemnity.
Nevertheless, the attack and the subsequent Allison incident in Nanking caused U.S. opinion to turn against the Japanese.
A flat-bottomed craft built in Shanghai specifically for river duty, Panay served as part of the US Navy’s Yangtze Patrol in the Asiatic Fleet, which was responsible for patrolling the Yangtze River to protect American lives and property in China.
After invading China in the summer of 1937, Japanese forces moved into Nanking (now known as Nanjing) in December, where they later committed the massacre in the city that resulted in the deaths of 300,000 civilians and prisoners of war.
Panay evacuated the remaining Americans from the city on December 11, bringing the number of people aboard to five officers, 54 enlisted men, four US embassy staff, and 10 civilians, including Universal Newsreel cameraman Norman Alley, Movietone News’ Eric Mayell, the New York Times’s Norman Soong, Collier’s Weekly correspondent Jim Marshall, La Stampa correspondent Sandro Sandri and Corriere della Sera correspondent Luigi Barzini Jr.
On the morning of the 12th, the Japanese air forces received information that fleeing Chinese forces were in the area in ten large steamers and a large number of junks and that they were between 12 and 25 mi (19 and 40 km) upstream from Nanking. While anchored upstream from Nanking, Panay and three Standard Oil tankers, Mei Ping, Mei An and Mei Hsia, came under attack from Japanese naval aircraft. Panay was hit by two of the eighteen 132 lb (60 kg) bombs dropped by three Yokosuka B4Y Type-96 bombers and strafed by nine Nakajima A4N Type-95 fighters.
According to Lieutenant J.W. Geist, an officer aboard the Panay, “the day before we told the Japanese army in the area who we were,” and three U.S. flags were plainly visible on the ship.
Planes also machine-gunned small boats taking the wounded ashore, and several additional survivors were wounded.
The Times correspondent Colin MacDonald, who had also been aboard the Panay, saw a Japanese army small boat machine-gun the Panay as it was sinking in spite of the American flag painted on the side of the ship.
Since Japanese planes continued to circle overhead, survivors cowered knee deep in mud in a swamp.
As a result of the attack, Panay sank; Storekeeper First Class Charles Lee Ensminger, Standard Oil tanker captain Carl H. Carlson and Italian reporter Sandro Sandri were killed, Coxswain Edgar C. Hulsebus died later that night. 43 sailors and five civilians were wounded.
The three Standard Oil tankers were also bombed and destroyed, and the captain of Mei An and many Chinese civilian passengers were killed. The vessels had been helping to evacuate the families of Standard Oil’s employees and agents from Nanking during the Japanese attack on that city.
Two newsreel cameramen were aboard during the attack (Norman Alley of Universal News and Eric Mayell of Movietone News); they were able to film part of the attack and, after reaching shore, the sinking of the ship in the middle of the river.
Survivors were later taken aboard the American vessel Oahu and the British gunboats HMS Ladybird and Bee. Earlier the same day, a Japanese shore battery had fired on Ladybird.
The survivors coped with near freezing nights in inadequate clothing and with no food. It took three days to move the sixteen wounded to the safety of several British and American ships.
The aftermath of the Panay sinking was a nervous time for the American ambassador to Japan, Joseph C. Grew. Grew, whose experience in the foreign service spanned over 30 years, “remembered the Maine,” the U.S. Navy ship that blew up in Havana Harbor in 1898. The sinking of Maine had propelled the U.S. into the Spanish–American War, and Grew hoped the sinking of Panay would not be a similar catalyst for the severance of diplomatic ties and war with Japan.
The Japanese government took full responsibility for sinking Panay but continued to maintain that the attack had been unintentional. Chief of Staff of Japanese naval forces in northern China, Vice Admiral Rokuzo Sugiyama, was assigned to make an apology. The formal apology reached Washington, D.C. on Christmas Eve.
Although Japanese officials maintained that their pilots never saw any American flags on Panay, a US Navy court of inquiry determined that several US flags were clearly visible on the vessel during the attacks. At the meeting held at the American embassy in Tokyo on December 23, Japanese officials maintained that one navy airplane had attacked a boat by machine gun for a short period of time and that Japanese army motor boats or launches attack the Chinese steamers escaping upstream on the opposite bank.
However, the Japanese navy insisted that the attack had been unintentional. The Japanese government paid an indemnity of $2,214,007.36 to the US on April 22, 1938, officially settling the Panay incident.
However, the presence of U.S. flags, which would have been visible from the air, suggests the attack had not been a mistake, but rather a type of unauthorized action. On the other hand, in japanese testimony, Kaname Harada, a member of the attack team, wrote that Panay did not display U.S. flags anywhere.