lying in Hong Kong territory.
Furthermore, Mr.MacDonald
understands that the Japanese authorities, as reported
in telegram No.139 of the 8th of November, 1938, from
His Majesty's Consul-General in Canton, have refused to
recognise a special Emergency Committee to which the
Chinese section of the Canton-Kowloon Railway was
entrusted when the capture of Canton by the Japanese
was impending, and have reserved the right to claim the
funds and property of the Chinese section of the Railway
for themselves.
3. Although Mr. MacDonald is not in a position to
say whether this in any way affects the Japanese position
in respect of the seized/rolling stock, I am to draw
attention to the report, contained in paragraph 2 of
telegram No.94 of the 19th of October, 1938, addressed to
the Foreign Office by His Majesty's Consul-General in
Canton, to the effect that certain British section coaches
had been used by the Chinese for the carriage of troops in
the last days before the line was broken.
4.
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