SON BY BY JEPT
44
{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.]
From:
JAPAN.
Sir R. Craigie, (Tokyo).
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21
Decypher.
May 18th, 1939.
D.
12.45.p.m. May 19th, 1939.
R.
10.15. p.m. May 18th, 1939.
No. 448.
Seizure of foreign shipping on China Coast.
As a
Contention of Japanese naval authorities appears to be that under their existing arrangements they are justified in the seizure of vessels of third Powers which have (aj been chartered to Chinese companies or Government departments, or (b) conveyed produce constituting a monopoly of Chinese Government. matter of law and principle we must of course strongly contest both points and this is being done by His Majesty's Embassy (though I assume that it is still our policy to stop short of anything which might drive the Japanese into a formal declaration of a state of war). But as a matter of practical sense it nevertheless seems unwise of British shipping owners to charter their ships in the present circumstance to Chinese Government departments or even to Chinese companies. It seems clear that Chinese hope by this practice to defeat the purposes of Japanese ban on trade in
Chinese bottoms. A great deal of friction between us and
Japanese arises because British traders generally are unwilling to forego a little immediate profit.
Doubtless charter terms offered by Chinese to companies are tempting and doubtless also these companies desire to continue
making operational profits despite hostilities. It is not neces-
sary, however, for British companies to assist them to do so to
our disadvantage and I suggest that Chinese produce could be
moved/