3.
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of the Rehabilitation Loan, thereby avoiding the heavy liability
for interest charges which would have been incurred. The
Secretary of State has been aware throughout that these operations
have been carried out. The bulk of the commodities concerned
(rice, flour, sugar, meat, butter, cotton yarn, textiles etc.)
have in fact been procured through his offices, normally on
terms over which this Government has had no control. In some
cases, our proposal to return to normal trade channels (e.g. in
flour) has not been agreed to. In the case of Japanese trade,
the "open account" system has been in force in the United Kingdom
and Singapore also, as being the only method whereby trade could
be conducted at the time; the Secretary of State has been
throughout cognisant of our operations, which were in fact
conducted until September 1947 through the United Kingdom
Liaison Mission in Tokyo.
8.
Details of the Suspense Accounts are not yet
available, and none of the profits have been transferred to
revenue. There are two main reasons for this. The first is
the point that a proportion of the receipts is derived from
the sale of War Office Supplies, and the War Office reserves
the right to claim the proceeds of sale. A payment on account
has in fact been made. The other is the acute difficulty
which has been experienced with accounting staff. Even if
Government accountants had been available, their training does
not necessarily fit them for dealing with commercial accounting.
The Department had to make shift with such accountants as it
could induce to stay for short periods on the salaries offered,
until in August last a local firm of chartered accountants was
placed in full charge and asked to expedite the completion of
statements of account. Satisfactory progress is now being
made but the problem of separating War Office Supplies from
Crown Agents and other Supplies, in view of the difficult
conditions that prevailed in 1946, is not an easy one. It is
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