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possible. But it has had the result that I have come into close contact with a number of Hsinking officials. It is rare that I attend an interview where no reference is made to the subject of recognition. The consuls of the other leading non-recognising" Powers have as it happens had little occasion recently to seek redress at Hsinking, and in consequence the attention of officials there has naturally been drawn chiefly to Great Britain.
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35. But I think that there is a deeper reason for the keen interest shown in Great Britain's attitude. In one sense it is a tribute to British prestige. Japanese are apt to picture their interests as being blocked at every turn by Great Britain. But whether they regret it or resent it, a large number have a vague idea that it only needs some sort of undefined understanding to sweep away the disputes as it were with a magic wand. Those civilian officials in Manchukuo who hold this view attach, I fancy, more importance to Great Britain's attitude towards recognition than to that of other Powers, even of America.
36. Mr. Hoshino, Director of General Affairs in the State Council, who is popularly supposed to be the real head of the Government, claims to be a practical man and not a politician. By common repute and by my own experience he is more interested in ways and means than in political or legal niceties. Many of the officials with whom I have come in contact are of the same bent. I have shaped my attitude accordingly, and, so long as it is possible to suppress all reference to legal and diplomatic rights, to make no suggestion of protest and merely to discuss matters on a business footing, I have found them not unaccommodating. Unfortunately, circumstances sometimes arise where it is essential to refer to treaty rights, and then the consul of a non-recognising Power finds himself up against a blank wall, for the official insists on his own interpretation of those rights and is utterly unyielding.
37. I have taken advantage of this willingness of officials to discuss matters, so long as discussion is on a business footing and is not based on treaty rights, to bring British merchants into direct touch with competent officials, and in a number of instances they have been enabled to obtain their share in what little trade in sundries is still allowed.
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(3) Attitude towards Treaty Rights.
38. Without necessarily accepting the Hsinking standpoint or admitting that the Government always lives up to it, it may be well to state what it is. In theory the Government recognises foreign rights acquired under the old régime, but it considers that they are modifiable when they conflict with the territorial supremacy of the State. Freedom of trade, for instance, cannot be maintained ifrigid control is considered essential to the well-being of the country. Exterritoriality is a conditional surrender of sovereignty subject to cancellation so soon as foreign Powers can safely trust the persons and the property of their nationals to the laws of the country.
39. The counter-argument, of course, is that international custom demands that the views of the foreign Powers should first be sought and given due consideration, but it is a barren line of argument, for it leads to the reply that, since the foreign Powers concerned decline to recognise her, Manchukuo has no means of negotiation and therefore must act according to the light as she sees it.
40. The net result is a vicious circle, caught up in which the foreign. merchant has seen his rights disappearing and his trade dwindling. It is not so much a matter of discrimination as of the incompatibility of totalitarianism with free trade and the open door. The Manchukuo Government profess to welcome the co-operation of the foreign business man, and it is probable that they are sincere, but the conditions attached involve too many risks, at the moment at all events, for the foreign capitalist lightly to venture in, though again it must be admitted that the local subsidiary of the British American Tobacco Company, which has formed itself into a Manchukuo company, has up to date been well treated.
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