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9.
5.
(b), The Japanese Consul-eneral had given an
assurance that, if Japanese candidates were
appointed, he would no longer raise any objection
to the Japanese shipping companies paying exchange
compensation.
(c). Several of the British shipping companies
principally concerned had been sounded, and had
evinced no objection to the proposed increase in
the number of Japanese pilots. They much prefer Japanese to Chinese, of whom, in recent years,
they have been apprehensive of being saddled in
increasing numbers.
(d). An increase of three would only bring the
Japanese representation up to eight out of forty,
and would only slightly increase their voice in
the affairs of the Association.
(e). The Japanese are in physical control of
Shanghai, and, in addition to being in a position
to start a separate pilotage service should they so
desire - a move which might result in the disintegra-
tion of the present one - they have it in their
power to harass the association in many ways.
Their rebuff over the exchange compensation scheme
could hardly have been acceptable to them, and it
would be most unwise to induce a definitely hostile attitude on their part by showing unwillingness
to meet them as far as possible.
hen, therefore, the question came before
the Consular Body for discussion, I indicated that,
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for/
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