10 Colonial Office: F3766/26/10.

(copied - andmy)

RECEIVED

19 AUG 1940

C. (). REGI

LIMITED DISTRIBUTION

Decypher. Sir A. Clark-Kerr

(Shanghai)

8th August, 1940.

D. By M/T

9th August, 1940.

R. 11.0 a.m.

9th August, 1940.

No.676

WWW

AUG 1940

50

IMPORTANT.

Following is repetition of Canton telegram No. 96 to me

Begins:

Addressed to Shanghai telegram No. 96 August 4th (please repeat to Foreign Office) repeated to Hong Kong telegram No. 78,

Please pass to Commodore as my telegram No. 25, Tokyo my telegram No. 33, Commander in Chief telegram No. 31. Please pass to Intelligence Centre Singapore.

My telegram No. 95.

Conversations with the navy seem to have established good personal relations with H.ll. Ships, official attitude remained (1) That Fatshan would not be released until the pilotage fees had been paid in full.

(2) That on the contrary fees [grp. omitted] had been fixed by joint conference of army and navy were reasonable and would not be reduced and

(3) That the action of the Hongkong Government in suspending agreement [?grp. omitted] unjustified and might not be

(Japanese authorities notified me on August 2nd that any other British ship may run weekly on payment of the full pilotage fee).

accepted.

2. In reply, I offered unofficially to recommend payment by Butterfield and Swire to [?me] of full pilotage to be followed by the immediate release of Fatshan, resumption of agreement on both sides and earliest possible consultation between myself and Japanese authorities as to "reasonable" pilotage fees. Agreed amount would be paid for every trip

in/

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