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3. The bearing of the above military situation on
the question of sanctions is as follows. The forts and
arsenals on the Yangtse, which had been designated for
destruction as a form of sanction, are likely before
long to fall into the hands of the Northern Chinese.
As the latter did not destroy ther on their evacuation
in retreat they may have had in mind the desirability
of utilising them in the event of their return, and (as
pointed out to the Cabinet by the Chief of the Naval
Staff) would probably be antagonised by their destruction
by the Powers or by ourselves. We have considered the
possible alternative of occupying these positions with a
military force and handing them over intact to the
Northerners in the event of their arrival. This, however,
would involve locking up troops for a period the length
of which cannot be measured, and we therefore decided to
reject this idea. A further objection to any action
against the forts is that they are at present held by
the forces of Chiang Kai-shek, who is now openly defying
the extremist elements in the Southem Government and is
un--
not/likely to deal with the forces from Hunan who
support the extremist party and were responsible for
the outrages at Nanking. Any action taken against the
forts would prove detrimental to Chiang Kai-shek and
tend to antagonise him, which, in the above circumstances,
is obviously undesirable.
In present conditions, therefore, we recommend
that the destruction or occupation of the forts on the
Yangtse and of the arsenal at Hankow should be abandoned
as a measure of sanction, though, if circumstances change,
it might still prove useful.
4. We have also considered the possibility,
mentioned by the Secretary of State for Foreign Affairs
at the last Cabinet Meeting, of a re-occupation of the
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