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ERC.

C40103/39

COPY.

107

IMPERIAL CHEMICAL INDUSTRIES LTD.

W.J.U. Woolcock

Government Relations Dept.

R. Keith Jopson, Esq., 0.B.E. Department of Overseas Trade, 35, Old Queen Street, London, S.W.1.

Dear Keith Jopson,

MILLBANK,

LONDON, S.W.1.

14th March, 1939.

We have received a report from China that the German Government has recently concluded a new barter agreement with the Chinese Government, again on the basis of 100,000,000 Reichsmark, but in the new agreement it is said that an attempt has been made to overcome the causes of dissatisfaction with the previous agreement.

Both the Chinese and German Governments were dissatisfied in that each party paid prices well in excess of world prices. Under the new agreement prices will be open to competition, Chinese purchasers of German goods being free to obtain supplies from any organisation in Germany, and vice versa for German purchasers of Chinese goods, prices in each case being the subject of negotiation. If the Chinese obtain supplies from sources other than the German Government organisation (Hapro) the latter will receive an over-riding commission of 3%. Similarly, if the Germans purchase from sources other than the Central Trust (representing the Chinese Government) the latter will receive 3% over-riding commission.

Have you any information on this subject which would enable you either to confirm or deny the report which has reached us?

Yours sincerely,

(Sgd.i

W.J.U. Woolcock.

WJUW/JJ

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