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States of America, who had participated in the original

Notê in regard to the Nanking outrages.

Further, the

United States Minister at Peking, who has throughout favoured

joint action, has warned Sir Miles Lampson in the strongest

terms against a re-occupation of the Concession as an

independent British action as calculated to have a

sensational and adverse effect in America, where our

motives would be misconstrued "and render hopeless any

further idea of future Anglo-American co-operation in China"

(Sir Miles Lampson, Peking, No.805, of April 30th). The

only nation whose co-operation in sanctions at Hankow can be

counted on is Italy.

(A)

There isevidence that in Shanghai the Hankow

Agreement is regarded as a "low river" policy, to be thrown

over when the rise in the river enables the Concession to be

re-occupied. This accentuates the difficulty of convincing

world opinion of the real justificati n which exists for

tearing up an agreement which has been flagrantly violated

by the Nationalist Goverment.

(vi) Some evidence was produced that the justification

for a re-occupation of the Concession is not well understood

in the Dominions at present.

(vii) There are many indications that the Nationalist

Government at Hankow is weaker, both from a political and

economic point of view.

The

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