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the Chinese, and he indicated that the object of the air

raid which had taken place at Canton on the preceding day

was to interrupt the transportation northwards of the

munitions which were known to have already arrived in Hong

Kong. The extension of the embargo zone cut off one line of

entry of such arms into China, namely, carriage in Chinese

vessels from Hong Kong to Canton; it remains now for Japan

to devise means of cutting off the other lines, namely,

carriage in foreign steamers or by rail.

Chinese

32.

There this matter rests for the moment.

shipping in the prohibited area has been brought to a

complete standstill.

that has yet happened as a result of the embargo is that a

number of vessels have been stopped by signal from Japanese

warships, but allowed to proceed after signalling their name,

ports of origin and destination and that they were not on

charter. In reply to enquiries from British shipping

companies as to the position of British merchant vessels, the

Commander-in-chief has informed them that the question is

under consideration and that meanwhile British ships should

obey all orders received from Japanese warships, reporting

on the circumstances afterwards.

In regard to foreign shipping, all

33.

The Chinese Government and educated classes are, as

was pointed out in my telegram No.417 of the 4th September,

awaiting with the keenest anxiety the reaction of His Majesty's

Government to the Japanese manoeuvres to prevent arms reaching

China via Hong Kong. They feel that, as co-signatories

with them of the Kellogg Pact and other agreements which

Japan is trampling underfoot, we owe them something more than

benevolent neutrality in what is for them a life or death

struggle against a powerful aggressor. Japan's suggestion

that the neutral Powers should help her to shorten the

hostilities by cutting off China's supply of arms has called

forth particularly cynical comment.

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