No. 58(84/72J/40) Copy to:

Foreign Office No.337

sir,

6

British Embassy,

Tokyo.

5th July, 1940.

In his despatch No. 18 K:PM of April 3rd,

His Excellency the Governor was good enough to inform

me that, after the payment of all claims from the sum

of $20,000 given by the Japanese Gover ment to compensate

for damage and loss of life sustained in the bombing raid

on British territory on February 21st, 1939, there remained

a balance of $3,934.43. Sir G. Northcote suggested that

if the Japanese authorities agreed, the sum of $1,450

claimed in his despatch No. 21 of March 16th, 1939, for

loss of life, personal injuries and damage to property

sustained in the incident on the border of the New Territories

of Hong Kong on November 26th, 1938, might be deducted from

this balance. I approached the Japanese Government

accordingly and I have now the honour to transmit herewith

a copy of my Note No. 104 of May 20th putting the matter

to the Minister for Foreign Affairs, and a copy of the

Minister for Foreign Affairs' reply.

2. You will observe that, while refusing in principle

to acknowledge liability for damages in respect of the

incident of November 26th, 1938, the Japanese Government

state that in practice they have no objection to the payment

of compensation out of the balance of $3,934.43 which

remains of the sum paid in compensation for the incident

of February 21st, 1939.

N.L. Smith, Esquire,

Officer Administering the Government,

Victoria,

Hong Kong.

3./

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