'The disclosure of certain agreement between Germany' and Japan for the Interchange of munitions and raw materials 1s considered to be the logical outcome of recent arrange ments made by Germany with Manchoukuo and" China, although there definite indication of a formal agreement with the last-named country. Barter agreements have been announced: from. Manchoukuo Germany hopes to get all, and from China valuable ores required for the manufacture of steel and also any other raw. material which may necessary to German economics. The total. value of materials to be bartered with China 1s said to be about '$100,000,000—the' same gute mentioned with the reports of the Tapanese agreement and that made with Manchoukuo, China, Japan and Manchoukuo, have not sulflclent money. to pur chase. German munitions but they can supply the raw material which Germany "greatly needs, Moreover, cly taking Germany's surplus, munllons—some of them probably ready out-of-date—they enable German factories to maintain omployment und assist: Germany as the passage of time demands in modernizing her own rearmament, now fully. completed, /Thus,: having ro-armed in accordance with her new declaration of polley, without—opposition, Germany can find outlets for the' disposal of her out-of-date equipment when new inventions come along, and so be prepared—by virtue Gf the import of raw material from the East—to, continue manufacturing war supplies upon on ever-increasing scale, In. China an interesting development is the attempt to create. a monopoly of the wood-all trade with Government acquiescence, to the serious detriment of a iongestablished" and. well-organized industry built up by foreign and Chinese private" enterprise. claimed by the sponsors of this monopoly that it is designed in the interests of the Industry but this assertion overlooks the fact that the Government's Testing Bureau is fully capable of developing the improve ment of the crop and quality of the all for exports without any need of disturbing the industry which "has served China so well-in the past and ig $0. efficiently prepared to continue that serving in the future. Moreover, about. $10,000.00 worth of Chinese and foreign capital has been invested the plant and equipment of the industry which cannot thus be lightly Ignored by the Chinese Government who, incidentally, has not given its approval to the ' monopoly " scheme" although," possibly unaware of the facts now brought to. light, is in-lined to favour it, despite the policy of the People's Economic Reconstruction Programme launched by General Chiang Kal-shek in April 1936. Tels thought, however, that the Government will soon realize that the proposed monopoly may seriously prejudice China's relations with British and American commercial Interests which have been staunchly felendly to her, to. say" nothing of the definite damage done to the foreign and Chinese firms whom the monopoly seeks to uproot.
will Indeed be tronteal if China's ores and" raw materials return to the Far East in the form of munitions or in a crude slate, to assist Drought {o light the fact that German advisers, aeroplanes and munitions had been supplied to the formes Canton regime without the know-Tedge of the Central Government of of the responsible German diplomats here, Equipment for an arsenal in Kwanglung is also believed to have been supplied from the same source. This throws a new light on the close understanding between the Japanese and German War Offices sug-{ested by recent reports. It certainly explains the absence of any Japanese protest when the Sino-German barter agreement was discussed.
"The Nanking Goverment continues to maintain reticence in regard to the reported German-Japanese agree ment, but points out that China will refuse 0 recognize the agreement if any clause infringes on Chinese sovereignty.
Text read from the printed page and cleaned; old type leaves the occasional error.