[This Document is the Property of His Britannic Majesty's Government, and should be returned
to the Foreign Office if not required for official use.]
15
From
CHINA.
Decypher.
Mr. Howe (Shanghai)
32nd December 1937.
Do
(Wireless)
23rd December 1937.
R.
5.00 p.m.
23rd December 1957.
No. 767.
رة
My immediately preceding telegram.
There seems a probability that hostile Japanese attitude would be modified with consequent lessening of dangerous tension which now exists if Japanese could be convinced of the truth of our answer to both complaints.
As regards (a) it might be useful if a clear statement was made to Japanese authorities of the relative volume of munitions which have passed through Hongkong since July by the country of origin. This would disclose nothing which would harm China and yet might do something to convince the Japanese that we are not China's chief suppliers of war material. It might also be advantageous to give them orally as detailed an account as possible of action take in regarů to Gloster aircraft as showing that it was precisely what would have been taken by a neutral state in cime of [? possible] war between China and Japan.
As regards (b) we hope that it is probably true as His Majesty's Ambassador Tokyo" says in his telegram under refer- ence that loading Japanese will say maintenance of China's financial stability is precisely what Japan objects to, this is not, according to Miñancial Adviser, the view of Japanese civil government department or of bankers. These realise full well the financial difficulties ahead and additional burden which financial chaos in China will undoubtedly place on Japer and impossbility of economic co-operation with a China without a financial system in working order however great her military victory may be, Apart from this observa-- tion I have nothing to add to my telegram No. 71€.
Addressed to Forein Office No. 767 December 3nd, repeated to Tokyo. copy to Peking Saving.