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gather that as a result of all this T.L.

Soong was demoted from being chairman of

the South West Transportation Company to

the post of director, Tang Sheng-chih

being made chairman in his stead. Morton

Smith says that the head office of the

Administration is supposed to be in Kunming,

but that it is commonly referred to as

consisting of three ministries, nine bureaux,

twenty-seven secretariats and has never yet

taken any effective action.

Yours sincerely,

(sgd) JC HUTCHIBOK

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