The "Ta Kung Pao" alleges that the Japanese have already made two payments to Mr. Wang Ching-wei of $2,000,000 each; also that he has suggested that, if the Japanese should land troops for the occupation of Foochow and Shaochow, he would undertake to establish a South-west Government, after which, by an extension of Japanese military operations, he would be able gradually to bring about dissension within Chinese resistance ranks. Mr. Wang Ching-wei's "basic demands" include:— l. Abolition of the "Reformed Government" at Nanking and of the "Provisional Government" at Peiping.
2. Establishment of a new National Government in Nanking 3. Establishment of an anti-Com munist National Salvation Alliance.
4. The grant of $3,000,000 a month as expenses.
5. The maintenance of 12 divisions as an anti-Communist National Salvation Army.
6. A military $200,000,000. budget loan of 7. Conclusion of a new agreement between Mr. Wang Ching-wei and Japan, based on Prince Konoye's statement London, Apr. 5.
It is understood that the Cabinet, at its meeting this morning, discussed the eventuality of a reshuffle which would provide for the inclusion of Mr. Winston Churchill, noted Tory leader and former First Lord of the Admiralty, and Mr. Anthony Eden, former Foreign Secretary.
If the reshuffle were to take place, Mr. Churchill would be entrusted most probably with the Ministry of Supplies, the creation of which is being discussed at present.
Tt is expected that the change in the Cabinet will be effected following the departure of Lord Stanhope, First Lord of the Admiralty, who will probably resign as a result of last night's incident.
Prior to this mornings Cabinet meeting, Lord Stanhope held a lengthy interview with the Prime Minister in connection with the incident.
Authorized quarters stated that Lord Stanhope wished to give to understand that the fleet should always be ready for action, and did hot mean to refer to any particular emergency.—Havas.
Text read from the printed page and cleaned; old type leaves the occasional error.