The substitution of Japanese advisers to the National Economic Council for those at present em: ployed Is linked with the proposal that Japan should provide the for-ign Loan that China 20 badly needs before she can put her house in order. It is contended that Japan Should have men on the spot to sure that the proceeds of this loan 0 fo productive and not to unpro-Guetive expenditure—that is to say, to developing the resources of the country, especially cotton, rather than into the pockets of the militar~ [st Commercial investigations also thow that China can be an invaluble source of raw materials for pan, both mineral and agricul tural" Japan is at present almost Wolated inthe world polite and such a source of supply close to her mack-door would prove to be beyond all estimation. cine rat ile of Shanghai must have ies a eas cee to-day.
Excluding loan service appropriations amounting to $257,000,000. China's military burden during the current year will total approximately '$330,000,000, which is approximately one-half ofthe income of the country.
This impressive outlay, it was pointed out in U-informed quarters, oes not include special campaign funds such as those ineurfed in the Kiangsi anti-Communist campaign. nor the drive against the Reds now selting under way in Szechuan. Nor fre the expenses of the miscellaneous forces ce-operating with Nanking included in the $330,000,000 estimate, Cuts in Army Pay view of the inadvisability ourselves oF the Chinese. We have. discussed matters upon we disagreed. We have said should be put right... and we have talked over how it hould be done. And we now believe that each side clearly sees the other's id that we can see what about it.
the only thing that seems to be true in these reports is our stand about sufi-Japanese propaganda, It {is quite correct that we have from time to. time made representations bout the anti-Japanese propagands fu Chinese school-books, as well towards the masses. Only a little while ago, that propaganda was anti-oreign—it included all foreigners, not only the Japanese. Since the pushing the enforcement of the mill -|Mfukden' incident, however, tary disbandment programme at the been chiefly directed against Is present time—or s0 long as the Red fend the Japanese. The anti-Japanese Scourge continues on such a scale—véa goes deeper than the immediate reduction in army pay anti-British boycott. In fact we scales is planned by the Ministry of regard the boycott as a result of the Finance as the only answer to the fanti-Japanese agitation and in that acute ancial problem of the Nan-sense perhaps less important. We king Government. [believe that it is impossible for there The United Press learned to-day in to be a real and lasting spiritual authoritative quarters that the forces Eapprochement between the two sent to Szechuan already have been peoples so long as one of them is eaching its children a gospel of hate Subjected {o sharp pay cuts ds the Jagainst the other. We have done on rst move in this programme. best to get this Kind of thing stopped.
The need of the Government for! money—always a chronic condition—A Bar to Friendship growing even more.acute with the "We have, so far as 1 know, never inauguration of the Szechuan cam-mentioned any speciffe incidents, such estimated In eliable MenUoned, 22y Spee Quarters that $100,000,000 may be re-incident, and the others to which you quired in the near future. refer. We should not dream of try-In the raising of such a sum, the ling to make the Chinese change their government is confronted with an un-history. What we have endeavoured Usually grave problem, due to the! to rectify is the anti-national teach present currency crisis' in Shanghai, img—the teaching that fosters or financial heart of the nation. jereates hatred against the Japanese nation. If this hatred is to persist, Dr. Kung and Dr. Soong were ex-there will never be the friendship pected this morning to ccturn to between Japan and China that is] Nanking some time to-day, en route necessary here for both nations. back to Shanghai, while "So far at loans go, I can assure Chiang Kai-shek, it was understood, you that there has never been any wil fy from Hankow to Chungking oficial talk of a loan by Japan to to-day.
(China. Dr. Wang Chung-hut in Tokyo From Chungking, Ht was reported. fis not discussing any such thing, and General Chisng may been officially considered to Shensi—United Press.
cal Dossy proceed it has not where. There are plenty of Executive Yuan and concurrently Foreign Minister, regarding settlement of cutsisnding issues, between the two nations, a spokesman for the Galmusko announced to-day.—United Press, [things to be cleared up before we jean begin talking about loans. In, fact, Tunderstand that the Chinese bankers actually don't want a loan. They say that It is not needed at Tt was intimated that the rapprochement between China and Japan would not materialize so rapidly.
We want to see how things sha lout, and if China really is in earnest that 18 to say, if gestures becom facts," it was explained. "We cerely hope they will and are glad the Chinese have realized that ¢o-Joperation with Japan on a really equal basis is necessary for peace fand prosperity in the Far East.
Text read from the printed page and cleaned; old type leaves the occasional error.