@Young:
We play it automatic, but I always announce my declarations of war because I like the formality of it.
Automatic is a house rule. The rules specifically state that a nation MUST declare war to be at war. It is assumed that they will declare war and it is stated that if you are attacked, then a de facto state of war exists, but in this case, France was never attacked and never attacked as we are talking the Pacific and Japan, France and Japan were neutral nations and the rules of neutrality applied.
Considering that the game is on Battlemap and the war field specifically did not state that there was war between the two nations AND I NEVER take the FIC with Japan (so England can never collect for it) we ran into a unique situation where both parties assumed France was at war, when it really was not.
One way to solve this is to have France declare war on round 1. It may be the only functionable action they have on round 1.