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to the extent and manner in which a relaxation of total prohibition could be effected to meet such cases, (Ends).

Following from His Majesty's Consul General at Shang-

hai No. 64, (Begins):

Following from Judge:

Your telegram No. 86.

I think that regulations are aimed at supplying enemy

Re- with money by (cash) payments or facilities in trade. tail trade for cash or supply of ordinary accompaniments of life of Europeans in China such as drug clothing though strictly within regulations should not be made subject of prosecution. The same with regard to supply of municipal services, and payment of rates so long as there is reci- procity and payments are for maintenance or administration

of concessions.

Difficulty as to rents is met by the provision in anending regulations of (?registered) (group undecypher- able) for payment into the bank. New leases to enemy and contracts of service ought not to be made but existing ar- rangements may be let alone unless likely to interfere with

The fact object of the regulations as outlined above. that prosecutions can only be instituted with the consent of the Crown Advocate enables you to lay down the above or other principles, This can be done by directions to Con- suls and intimations to the Crown Advocate that regulations should be applied on these lines. The Crown is always free to prosecute if advantage is to be taken of your di- rections to evade the spirit of the regulations (ends) End of (R).

I propose if you approve to issue simultaneously with King's Regulations instructions to Consuls in the sense suggested by the Judge.

They must necessarily be on general lines as it is in- possible to anticipate the multifarious questions that will arise.

New legislation is sure to create considerable con- fusion, and uncertainty unless accompanied by such instruc- tions.

Confidential. Japanese Minister informs me that the reason why Japanese Goverment did not fall in with our proposals was because Japanese Consuls reported that they were impracticable, and unless question is carefully handled there is I fear some risk of their becoming so in our own case.

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