CO129-558-11 Mission of Sir F. Leith-Ross to China- proposals for a Hong Kong - China customs... 29-9-1936 - 30-12-1936 — Page 101

101

Boxer Purchasing Commision.

had very influential support and was prepared to work

with any other concern which would co-operate. The Germans

were more successful by means of long credit, barter methods

and very low prices. He would anticipate, nevertheless,

that German competition in capital goods would diminish

because the barter method was exhausting its possibilities.

The use of the askimerk system was being restricted and Otto

Wolff had lost heavily on some of his contracts.

SIR FREDERICK LEITH-ROSS said that he had suggested

in his report that there should be an improvement in the

machinery for the placing and scrutinising of orders given

by the Boxer Purchasing Commission. It was felt in China

that, as the Commission was obliged to place certain orders

in the United Kingdom, the United Kingdom firms concerned

made use of the fact to demand higher prices than in other

markets. Moreover, in a particular case, that of the Vulcan

locomotives ordered for the Canton-Hankow railway, the

material supplied had been found defective or unsuitable.

He asked whether this matter had been taken up with the

Purchasing Commission. SIR EDWARD CROWE stated that the

Commission had in fact been awaiting Sir Frederick's return

in order to discuss the position with him. SIR FREDERICK

pointed out that the Chinese Government were anxious to

capitalise the fund in order to finance immediate purchases.

He was not sure that this was a sound policy, but there

was no doubt they were very interested in carrying through

the transections quickly. SIR EDVARD CROW said that many

manufacturers were not in present circumstances in a hurry

for orders and would prefer to wait. SIR FREDERICK replied

that if they did not take them, the orders would go

elsewhere.

Regarding the allegation that the London

Purchasing Commission regarded themselves merely as agents

-5-