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5. It will be seen from the enclosed telegram that the
Japanese Government would probably be prepared to release the
two ships on condition that all claims for compensation were
waived and that His Majesty's Ambassador recommends acceptance
of the Japanese Vice-Minister's offer without prejudice to
the legal position of His Majesty's Government. Lord Halifax
has informed Sir Robert Craigie that it will be necessary in
the first place to inform the owners of the offer, but that
he doubts whether they will be inclined to waive all claims
for compensation in view of the very considerable losses they
have suffered (see telegram to Sir Robert Craigie enclosed
herein).
6. It would appear to be undesirable that His Majesty's
Government should incur any responsibility in this matter by
recommemding acceptance of the Japanese Government's offer
and it is therefore suggested that it should be communicated
to them without comment in the first place.
7.
Lord Halifax would therefore be grateful if the
Governor of Hong Kong could be informed of the position by
telegraph and if he could obtain the views of Messrs.
Williamson on the Japanese offer. Should Messrs. Williamson
request the advice of His Majesty's Government, it might be
explained to them that in His Majesty's Ambassador's view, the
maintenance of their claims may merely lead to further
indefinite detention of the two vessels. At the same time,
if the companies decide to take this risk, His Majesty's
Government would have no alternative but to submit the claims
to the Japanese Government.
It might, however, be pointed
out informally that the companies would at least be well-
advised to reduce such claims so substantially that the
Japanese Government would still have an inducement to settle
this matter quickly, although this again is a matter which
the