Copy.
M.02030/36
SECRET
Sir,
ADMIRALTY, S.W.1.
23rd May, 1936.
I am commanded by My Lords Commissioners of
the Admiralty to refer to Admiralty letter M.02030/36
of the 2nd April, forwarding a copy of a report of a
conversation between the Commander-in-Chief, China
Station, and the Marshal of Kwangsi Province, and to
offer, for the information of the Secretary of State
for Foreign Affairs, the following observations on the
'Huchao' system and its effect on the export of British
arms.
2. My Lords desire to associate themselves with
the views and recommendations put forward by the Board
of Trade in their letter No: C.R.T.1152/36 dated 5th
May. In this connection, and as further evidence of
the disregard of the 'Huchao' system by other countries
I am to enclose extracts from a Hong Kong Intelligence
Report, covering the period 19th February to 3rd March,
1936.
Copies of this letter have been sent to the
War Office, Air Ministry, Board of Trade and Colonial
Office.
The Under Secretary of State,
FOREIGN OFFICE,
S.W.1.
I am, etc.,
(Sgd) S. H. PHILLIPS.