COPY.
Butterfield & Swire.
The Hon. Colonial Secretary,
HONG KONG.
Sir,
3
Hong Kong,
9th November, 1939.
CANTON TRADE.
As you are aware, our S.S. "Fatshan" operates to Canton
under an agreement made earlier this year by H.. Consul General
at that port with his Japanese colleague, according to which she is
permitted to sail fortnightly, while Japanese vessels proceeding
to Canton are allowed to call at Hong Kong weekly in either
direction.
According to this agreement no cargo is to be loaded or discharged in Hong Kong by such vessels with the exception of cargo consigned to Shameen, for which special arrangements are made on
each occasion in Canton.
A
Trade by Pritish vessels to and from Canton is thus completely at a standstill, but we have been watching for some time the steady growth in the Japanese carrying trade to and from Canton.
In the first place this consists in the trade between Japan, Formosa and Canton which has assumed substantial proportions, and of which we have considerable though incomplete particulars, which we would be willing to furnish if desired. It is understood that vessels carrying this trade are claimed by the Japanese to be
carried transports and that there is a general presumption that the goods are for the use of the Japanese Forces, but it is obvious from a most cursory scrutiny of the cargoes carried that they consist to a large extent of Japanese goods consigned to Canton for mercantile purposes. Similarly these vessels have exported from Canton considerable quantities of silk and other articles of merchandize, the carriage of which has obviously nothing to do with the prosecution of hostilities. Most of the vessels engaged in this trade discharge
at Whampoa.
In the second lace, we have noted with concern the