Decode
and Decypher.
NO DISTRIBUTION.
Mr. Howe. (Shanghai).
January 17th, 1938.
D. (by wireless) January 20th, 1938.
7.0. p.m. January 20th, 1938.
R.
19
No. 89.
"R" begins:
--o0o--
Please [gr.omit.] Jardine Matheson and Company to show you
correspondence regarding proposal to purchase four "Hai" ships
from Boxer Indemnity Trust.
Keswick has consulted me.
Jardine Matheson and Company are
very anxious to secure these vessels and are prepared to make a
firm offer provided:-
(1) Board of Trade agree to transfer of the vessels from
Chinese Flag and
(2) They can be assured that British Government will give them
full support in the event of difficulties arising with the
Japanese who may attempt to detain the vessels on the ground that
their transfer was not of a bonâ fide character. In reply to an
enquiry from Jardine Matheson and Company as to his attitude to
such a transfer and whether the Japanese Navy would "stop and
detain" the ships if, after transfer, they came within the zone of
surveillance of the Japanese Fleet, Admiral Hasegawa has referred
the Company to article No. 23 of the Japanese Imperial Maritime
Law in time of war, No. 8 of 1914, the interpretation of which he
says is a matter for a Prize Court. Article in question is
similar to Article 56 of unratified declaration of London of
1909. "R" ends.
In view (1) of uncertainty and hesitation of the Japanese
themselves as to their rights in regard to neutrals during this
state of undeclared war, (2) of the fact that a bonâ fide transfer
to a foreign flag, (such as is here contemplated) does not come
within