CONFIDENTIAL

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forthcoming call at Hsinkang of the Blue Funnel ship 8.8.

"Automedon", sent a telegram protesting against this and

against the trans-shipping at Singapore of the cargo on the

"Automedon" destined for Hsinkang; the delay at Shanghai of

the "Denodocus" was "entirely the ship's fault for which the

Blue Funnel must be held responsible". However Blue Funnel

were informed by their Chinese agents in Shanghai that the

"Demodocus" case would be settled "very soon indeed". They

have until the morning of 28 March to decide whether their

next sailing to China, that of s.s. "Menesthens", should take

place. No reply has been received from the Chinese to our

Mission's request for further information.

I

ADDITIONAL POINTS FOR DISCUSSION

3. The following additional points might usefully be discussed

at the meeting:

(a) Shipping embarzo

The Governor of Hong Kong has suggested that the whole question of visits of British shipping to China needs considera-

tion; from Hong Kong's point of view the fewer British subjects

who visit China either by ship or other means of transport and

become potential hostages, the better. Blue Funnel's local agents have pointed out to him, however, that the Chinese regard

Blue Funnel as under an obligation at any rate to complete the programme of voyages already scheduled and to deliver the cargoes for which they have already contracted. They fear

that if Blue Funnel were to suspend voyages completely, the

/result

CONFIDENTIAL

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