What incident almost brought the united states and japan to war in 1937?

The sinking of an American gunboat, the USS Panay.

The Panay was evacuating US citizens from the Nanking area during Japan's attack on that city, and was escorting three barges of the Standard Oil company.  The Panay was sunk by Japanese warplanes while traveling on the Yangtze River.  It caused a crisis that could have led to war, but Japan insisted that the attack was an accident, that they didn't intend to sink a neutral US ship. They also agreed to pay reparations to those affected by the attack.

The common sense pamphlet i think