FO371-23516 — Page 194

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There was considerable movement of Japanese newspapermen in

South China during the quarter and a mumber were reported

to have been expelled from Indo-China on various excuses,

The local OSAKA Mainichi Group representative was recently

notified by his head office that "Hong Kong is likely to

lose its value" and it was therefore decided to open a new

agency in Canton. The same group recently distributed

over 100 newly recruited English speaking Japanese reporters

to cities in China. A Japanese propaganda newspaper in

Chinese called the "Kwang Tung Sun (quick) Po" is being

published in Canton, It is discovered that secret reports,

concerning Chinese Military, trade, war materials, movements

of British officials, currency problems, etc., are being

sent from the Hong Kong branch of the Bank of Taiwan to a

Mr. ISHIKAWA somewhere in Tokyo; one report includes

"present conditions in Canton" as found by TONEGI, the

Vice-Consul at Hong Kong, who is South China chief of the

Special Service Political Department and who is apparently

known to his agents in Nanking and Shanghai as Mrs. JOHNSON,

and likewise the Hong Kong Japanese Consulate's Eurasian

agent, KICHARD, is addressed as Miss S.U. YUNG. A new

Japanese economical and political espionage concern is the

FUK TAI Company (FUKU TAI KOSI) whose representatives have

visited Hong Kong. The Company is operated from Formosa

and engaged in investigation work under cover of development

and is believed to be a subsidiary of the Formosa Development

Company, which, according to several reports, expects to

control the development of South China. The FUK TAI is also

apparently a sister society of the KOCHU KOSHI (China

Development) Company, which concern operating from Tokyo,

did the espionage ground work in South China before the

still present hostilities. The KOCHU KOSHI/has two idle

representatives in Hong Kong who are not sure whether the

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