FO371-23516 — Page 43

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F

5822

12 JUN 1939

NO DISTRIBUTION.

3ir A. Clark Kerr, (Shanghai).

(WIRELESS)

Decypher.

D.

R.

10.10 a.m.

No. 520.

10th June, 1939.

10th June, 1939.

10th June, 1939.

93

JUN

A X

I

0:0:0:0:0

Addressed to Tokyo No. 328 June 8th.

Mr. Broadmead's telegram No. 290 paragraph 3.

Jardine Matheson and Company have secured permission (by pay- ment of necessary squeeze) to purchase antity of cocoons, and to use their machinery at Konzenchao near Hangchow in Chekiang province, to process, them. They are still unable however to transport these cocoons to Shanghai by railway as local Japanese military authorities refuse to allow anyone to do so except Wha Chung Company (same as that described in your Chancery letter to Far Eastern Department May 17th) which claims to exercise transport monopoly.

2. Wha Chung Company who are already in debt to Japanese banks to the extent of some 6,000,000 dollars, have offered to transport Jardine Matheson Company's cocoons (worth about 200,000 dollars) to Shanghai as their own cargo, in return for loan of 2,000,000 dollars at a high rate of interest. Jardine Matheson and Company have refused this offer but are willing to pay 10 dollars per bale (bale is worth about eight dollars) and it may eventually be possible to

In the meantime Japanese come to some arrangement on these lines. military are reported to be putting out notices in Hangchow district to the effect that transport of cocoons will be forbidden to anti- Japanese or foreign concerns and to Japanese ronins.

1939

The Chinese

filatures here are of course having similar difficulties in obtaining supplies of cocoons. As regards Kiangsu areas north

of the Yangtse, Jardine Matheson and Company are hoping to be able

to

r.Ü. REGISTRY.

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