73
but it does not seem likely that the Japanese would take
this action merely to spite Hongkong in a commercial way.
The commercial proposals are possibly a pretext for a military
object. south of Formosa the Japanese have no suitable place
from which they could operate. Hongkong is obviously out
of the question and they therefore turn their eyes to the
weak oolony of Macao over which, by means of strong commercial
penetration, they could gain sufficient hold to engage in
quasi-military activities.
With their establishment in Macao
it is reasonable to suppose that the Japanese could put
pressure on South China to ensure that "friendship" with
China which they are so keen on establishing.
8.
This is all rather speculative but appears to be
fair deduction from the facts (a) That the Japanese are
scheming to get a footing into Macao, (b) That the Macao
Authorities fear that eventually the Japanese would take over
control of the colony and (c) that the Kacao Authorities want
us to take some action to prevent Japanese control. It
most likely that if we assist Macao in any way
Bay
by taking up the waterworks – the Portuguese would take that
as being a willingness to assist them against Japanese
aggression in general and that they would then offer a stiff
front to the Japanese and refuse all their proposals.
The effect on us of the fulfilment of the Japanese
scheme would, therefore, appear to be (a) diversion of some
of Hongkong's entrepot trade aad (b) potential political
exbarrassment.
(sgd.)
HONGZONG.
13th March, 1935.
To His Excellency The Governor,
HNGKUNG.
G.C. Pelham.
H. M. Trade Commissioner and Commercial Secretary.