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imported wines and spirits free of duty, "pro bono
publico" or for their own consumption!
6.
Japanese "government chartered vessels" or
"transports" are reported to have brought on several
occasions large consignments of rice, flour, beans,
groundnut oil and other foodstuffs, of which a
relatively small proportion has subsequently been
sold to dealers. The Japanese Consul-General however
informed me confidentially that the following system
obtains. Stores are ordered for military purposes
on a liberal basis. Those surplus to military re-
quirements are sold to an organisation known as the
"propaganda Comforts Distributing Association"
(
) Membership of this organisation
is confined to Japanese (and I think also friendly
Chinese) firms. No firm which is not a member of
this organisation and which does not undertake to
abide by its rules can trade. The organisation sells
the goods to its member firms at cost price, which,
since it includes neither freight nor duty, is very
low. The firms may only sell the goods to the public
at this cost price, plus 10%. All transactions have
to be recorded at the Japanese Consulate-General
which can inspect books and demand proofs. The 10%
profit is intended to defray overhead charges of
the member firm at Canton, and the difference if any,
between the 10% and the firms' overheads has to be
handed over "voluntarily" to the Peace Maintenance
Commission, as a "grant in aid". If the information
is true, it would be interesting to obtain a reliable
report on the working of the scheme, which seems
ingeniously designed to popularize Japanese goods,
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