51
with China, and we tend to become apprehensive when
self-imposed restrictions appear to be adopted by
His Majesty's Government to the detriment of China, and
more especially if the restrictions are left to be imposed
by the Government of Hong Kong.
3. The present policy of His Majesty's Government
is not to prevent the passage of arms into China through Hong Kong (indeed no permission would be required even
were there a declared state of war between China and
Japan). Further, it does not appear that we object to
vessels of war (Thorneycroft C.M.Boats) being fitted out in
this country and licensed by the Board of Trade for export
to China. We are perhaps a little less confident about
the latter since it is stated in Jarrett's letter to me
of the 2nd of June (M.03084/38) that the Foreign Office
suggested that the boats should be diamantled in some
minor way (e.g. by taking off their propellers) ao as to
avoid infringement of Article 8 of Hague Convention XIII.
4. In connexión however with the application by
Messrs.Bailey and Company for a licence to construct two
river gunboats in Hong Kong for the Cantonese authorities
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