CONFIDENTIAL
I
The Board of Trade have informed us that they have no legal powers effectively to prevent the chartering of ships. They could, however, ask the Baltic Market and those companies which arrange the charters,
not to charter to the Chinese. Such a request would be most unsympa-
thetically received. The companies concerned would stand to lose a
considerable amount of money and would argue that by withholding their services they would simply be handing over the China chartering trade to their foreign competitors. Many of the ships are not British, and if they were not chartered through the London market,
they could be chartered elsewhere.
(3)
Prevention of British ships visiting China
As the Board of Trade have no power to prevent such visits, they would be obliged to rely on requests to the companies concerned. The companies are however well aware of the risks involved, and are
nevertheless anxious to continue trading. They would no doubt point
cut that some of the incidents leading to the arrest of ships' offi- cers were of the latters' making and that some ships (Glen Line) are calling regularly at Chinese points without incident, They would
not be sympathetic to a request to curtail ships' visits as a means
of political pressure while it still remained our policy to encourage
trade. It would, however, be possible to force the shipowners' hands
by means of a formal warning to the effect that we considered Chinese
ports dangerous to British vessels and seamen, and visits to China
dangerous for British subjects. This would have the effect of
inflating insurance rates and making the China shipping trade
CONFIDENTIAL
../unprofitable.