242

event of a serious resistance being offered by the

Powers at Shanghai, the Chinese Nationalist Government

might turn their attention towards Canton and Hong-Kong.

22. We recognise that the magnitude of our interests

at Shanghai and the reaction of a direstor there on

our interests and prestige in other parts of China

and of the whole East may be such as to compel us

to an active defence. We admit the possibility

also that by showing a bold front at Shanghai we

may stop the rot. But we feel bound to point out

that our attitude may lead to/war, the corsequences

and magnitude of which cannot be foreseen.

ઈં

From

our point of view the only advantage to be gained

Su ch from/a

a war is the retention of what we already hold

and the maintenance of our prestige in the East.

Japan however may have more to gain and it is on

Japan that we should have to rely to carry the main

burden.

13.

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