The USS Panay incident was a Japanese bombing attack on the U.S. Navy river gunboat Panay and three Standard Oil Company tankers on the Yangtze River near the Chinese capital of Nanjing on December 12, 1937. Japan and the United States were not at war at the time. The boats were part of the American naval operation called the Yangtze Patrol, which began following the joint British, French, and American victory in The Second Opium War. Public reaction was mixed in the U.S., with the president weighing various diplomatic and military responses only to settle for an apology and compensation. The Japanese claimed that they did not see the U.S. flags painted on the deck of the gunboat. Tokyo officially apologized and paid a cash indemnity. The settlement mollified some of the U.S. anger, and newspapers called the matter closed.