Describe what happened to the Panay, and give me your thoughts on what it meant and the US response.

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. Some extra facts: DateDecember 12, 1937
Location
Yangtze River, off Nanking, China
ResultUSS Panay sunk
Belligerents
United States
Japan
Commanders and leaders
James J. Hughes
Rūku Hikkumotto
Strength
1 gunboat
12 aircraft
Casualties and losses
1 gunboat sunk
3 killed
43 wounded
none
Civilian casualties: 2 killed, 5 wounded