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2.
latter were prepared to compromise by paying the amount due in respect of the period from the 1st March 1939 to the 31st May 1939, namely some $39,000.
3.
In view of the possibility of further deterioration in the situation in Shanghai the majority of the members of the Pilots' Association, whose relations with local Japanese interests have fortunately been so far most cordial, decided to accept the offer. The Pilots' Association accordingly on June the 19th accepted the Japanese offer as a final settlement of the question. They took this step, of course, upon their own responsibility and were anxious to do so in order not to miss the opportunity of a settlement. In my opinion they were not likely to secure better terms from the Japanese shipping firms, who had, it may be remembered, declined to re@ognise the increased tariff which was introduced and put into force without their prior acceptance.
I have the honour to be,
Sir,
Your Excellency's most obedient,
humble servant,
(SIGNED) HERBERT PHILLIPS.
Consul-General.
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