FO371-24687 — Page 56

FH

SECRET

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MEMORANDUM

10

NICKEL SALE BY 1.C.I. TO M.B.K. FOR HUA HSING BANK

In October 1939, the Imperial Chemical Industries in Shanghai were approached by the Mitsui Bussan Kaisha for the supply of nickel for use by the Hua Hsing Bank in the minting of cupro-nickel subsidiary coins. The I.C.I. here reported to their principals in the United Kingdom, requesting them to obtain advice from the com- petent authorities. They informed the Commercial Counsellor on the 1st November that their principals had cabled an acceptance of this order, stating that a permit to ship had already been obtained, adding that they pre- sumed therefore that no objection had been raised to their supplying the nickel for the purpose stated. The I.C.I. thereupon sola 50 tons to Mitsui Bussan Kaisha. Their representative, in the course of these negotiations, visited premises north of the Soochow Creek which were stated to be the mint, where they did not penetrate further than the office, and were shown samples of the coins.

The Foreign Office telegraphed out to Mr. Rogers on the 29th October, for his confidential information, that the Hua Hsing Bank was in the market for nickel for coinage, adding that they assumed that the Chinese Government were taking whatever steps were possible to keep the Shanghai area supplied with subsidiary coinage of National currency.

In April 1940, Mr. Rogers saw Mr. Killery, the manager of I.C.I. (China), who was passing through Hong Kong and, referring to the sale of this nickel last year, told him that he was very much opposed to such transactions which facili- tate the Japanese attempts to extend the circulation of this unwanted currency. Mr. Killery told him then that the Hua Hsing Bank was in the market for a further 500 tons, but had agreed that it was undesirable that I.C.I. or their principals should sell this further amount. In his telegram reporting this to the Foreign Office (see p.37/89T/40) Mr. Rogers trusted that it would be possible to oppose another sale of nickel to the Hua Hsing Bank.

Mr. G.A. Haley, who is now in charge of I.C.I. (China) Ltd., told me yesterday that they had received an enquiry from the M.B.K. for 100 tons of nickel for new coins to be produced for the Hua Hsing Bank at a mint in Shanghai north of the Soochow Creek. He enquired what our attitude towards such a sale would be. I reminded him of Mr. Killery's discussion with Mr. Rogers in April, and told him that I would communicate with him after consulting the other departments of the Embassy which are concerned.

Draft telegram submitted.

20th June 1940.

(Signed) J.C.HUTCHISON.

P.S. I have since received from Mr. Haley the notes now attached, and also a telephone message from I.C.I. saying M.B.K. are pressing for a reply.

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J.C.H.

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