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Paraphrase of CYPHER Telegram From SECRETARY OF STATE To GOVERNOR, HONGKONG.
4th August, 1915.
Date
394
464
.oititaup
.bowofis
The answers to your question in your cypher telegram of 13th July are as follows:-
1. For trading purposes Germans in China are enemies under the new proclamation; for prize court purposes in accordance with the judgment of the Prize Court at Alexandria in the "Derfflinger" case.
The only remaining question is whether they are enemies for the purpose of acts forbidden by common law, that is non-commer- cial intercourse. It seems likely that this is so and that the Bri- tish court in China would so hold, but the metter does not seem to be of importance,
2. The answer is yes: but the question is not likely to arise often since French and Russian ships are forbidden to carry such goods and Japanese ships have been asked not to do so.
Should a case arise there seems to be no reason why the power of seizure should not be used.
3. All such contracts become illegal but in certain cases licences are to be issued and the British representative at Peking has received instructions.
As regards German customs officers boarding British ships it is considered to be undesirable for political reasons to inter- fore.
4. This is covered by the instructions mentioned in the reply to question 3.
5 Companies must be considered British but difficulties will be met sufficiently by the China Companies Order-in-Council which will shortly be passed together with the new Trading with the Enemy Act passed on 17th June.
6.
On this point you will receive a further communication. This was answered in my oypher telogram of 30th July.
7.
This can be dealt with by licence.
The statement that there is no local power to grant such licences seems to be incorrect; your power to issue licences is