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ships continued to call at Newchwang.

The Japanese believe that anchurian beans are being ship-

ped to Vientsin for transhipment to enemy territory.

They suspect that goods for which export permits had not

been granted, e.g. kaoliang, are being shipped with the beans.

They wish to prevent (1) British ships getting cargoes

which would otherwise be shipped by Dairen isen Kaisha and

(ii) illicit transactions by chinese merchants.

It would be almost impossible to prove that the Japanese

authorities are using unfair methods as the Chinese merchants

are too terror-stricken to say anything that might incur the

displeasure of the wantung Army.

As regards the Yokohama Specie Bank, ir. Ching said that

when the merchants first applied to the Bank they did not say

that their goods were going by a British ship and that the

attitude of the Bank stiffened when the "Nanning" Bills of

Lading were presented,

The Bank finally told Chinese shippers that it would grant

loans on the beans only if the shippers produced a letter of

guarantee from two Japanese firms stating that the beans were

not for transhipment to south China. The Chinese shiŋvers were

not able to get this guarantee in time and the ship sailed on

December 2nd with the Mitsui Bussan aisha cargo only. Nearly

half of the estimated total cargo was left behind.

As the Chief of Police had told the agent of the "Manning'

that membera of the crew would not be allowed to land without

permission, I called on this official who said that there was

no intention to prevent the crew from landing.

already been granted for them to land.

Permission had

British Consulate-General,

MUKDEN, December 5th, 1938.

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(sd.) Acting Consul.

W. W. McVittie.

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