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 "Manchukuo", steps were at once taken to realise the wishes of the Japanese as already mentioned in the first section of this chapter. Since the formation of the "new State", the policy of the "Manchukuo Ministry of Communications" seems to be to enter into agreements with the South Manchuria Railway Company for the exploitation of at least some of the main railway lines under its authority.

The Chinese telephone, telegraph and radio systems in Manchuria, being entirely Government-owned, had their own executives and, in addition, were subject to a unified control by the North-Eastern Telephone, Telegraph and Radio Administration. Since September 18th, all three of these systems have been brought into closer co-operation with existing Japanese systems throughout Manchuria. Moreover, arrangements have been made between the Japanese and the North-Eastern Telegraph Administration for through telegrams from or to any place in Manchuria and to or from any place in Kwantung Leased Territory, Japan, Korea, Formosa, and the South Sea Islands. Between the principal centres in North Manchuria and the Japanese post offices at Dairen, Mukden and Changchun, direct circuit lines have been constructed to ensure the quick transmission of messages.

Japanese "kana" messages have been given especially low rates. To learn to handle Japanese "kana" syllables, special training is being given to the Chinese staff, and it is planned to have Japanese clerks gradually join the Chinese telegraph workers at the chief centres. Thus, every facility has been given to favour telegraphic intercourse between Manchuria and the whole Japanese Empire. Naturally, the commercial connections between the countries are thereby greatly strengthened.

After the events of September 18th–19th, the Japanese authorities issued orders to the offices and banks in which the revenue of the Salt Gabelle was retained that no payment from these funds was to be made without their consent.

Supervision over the Salt Gabelle was insisted upon on the ground that the greater part of the revenue from this source, though nominally national, had in fact been retained by Marshal Chang Hsueh-liang's Government. Income from this source, in 1930, had amounted to about $25,000,000 silver, of which $24,000,000 had been retained in Manchuria. Only $1,000,000 had been remitted to the Inspectorate-General of the Salt Gabelle in Shanghai.

After Marshal Chang Hsueh-liang had joined the National Government in December 1928, he agreed to pay the monthly quota of $86,600 silver which had been fixed as the amount due from Manchuria towards the loans secured on the Salt Gabelle. Somewhat later, in April 1930, a revised table was announced in which the Manchurian monthly quota was raised to $217,800. Because of local pressure upon the Manchurian finances, however, Marshal Chang requested a postponement of the new assignment. At the time of the Mukden incident, his arrears amounted to $576,200. The first remittance at the new rate of $217,800 was actually made on September 29th, 1931, by consent of the Japanese Army officers. Since then, to March 1932 inclusive, the newly-established authorities in Manchuria have remitted to the Central Government, not only these monthly quotas, but also the quota arrears left unpaid by Marshal Chang Hsuehliang. The surplus from the Salt revenue, however, they regarded as Manchurian, and not national, income, and therefore considered that they were justified in retaining it for local purposes.

After the Mukden Committee for the Maintenance of Peace and Order had been transformed into the Provincial Government ad interim, it ordered the District Salt Inspectorate at Newchwang to transfer all its funds to the Provincial Bank for disbursement by the Board of Finance. According to Chinese official reports, the Bank of China at Newchwang was likewise,