76
5.
The puzzle for most local, level-headed people is to
know which side they really want to win. They feel that
a victorious Chinese would be insufferable, while a
victorious Japanese would make their trade most difficult.
The view is that, in the absence of outside interference, the
Japanese will be victorious, at least to the extent that they
will control the Shanghai area and the Northern Provinces, but that she will have severly weakened her economic position,
and will be in greater fear of Russia.
Hong Kong
16th September, 1937.
(SGD.) G.C. PELHAM.