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took place there should be liquidation of promises

made at Washington immediately upon establishment of

X

X

ally de facto regency government with a sufficient

measure of provincial support to make such liquidation practicable.

Political situation has deteriorated during past

few days and it is still doubtful whether Yen cabinet will materialize as a real coalition government repre- senting Wu, Chiang and Sun and I cannot subscribe to view

apparently held by Americans that Washington surtax

agreement should be concluded without regard to

political situation and status of Chinese delegation vis-à-vis principal provincial leaders.

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