The Archive · 1938

New Confederation?

Peiping, Nov. 3.

The conversations between Chinese leaders accepting office in the areas of China now held by the Japanese in Nanking are considering in detail the organization of a new central government, according to the Chinese press.

The new government is, it is stated, to take the form of a confederated state, embracing the "Provisional Government," the "Reformed Government" and other newly-organized regimes. The new gov ment, when established, will part pate in the anti-Comintern pact and adopt a foreign policy based on friendship between Japan, Manchoukuo and China.

It is reported that financial and currency questions are also being discussed.

While efforts will be made to consolidate the currency situation in North, Central and South China, the Chinese press adds that the old Chinese legal tender notes, those issued by the government banks of the National Government, will be used as ihe temporary trade currency for Central and South China and that the relation between these notes and North China notes will be readjusted.

In addition domestic problems will also be deliberated. They are to in-

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