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from Hong Kong to Canton. He was not sure if they appreciated this. Before however, he communicated again with them, I said I would confirm with you that this was the line you would take.
4. After I reported to you the results of my interview with Mr. Yoshioka this morning you telephoned Mr. Yoshioka (Mr. Kita being out). He confirmed his earlier statement that "the Navy had made up their minds" and had refused the payment already proferred by Messrs. Butterfield & Swire. They took no notice of your conversation with Mr. Okazaki to the effect that the pilot was merely a "liaison officer" to whom only a nominal fee was payable, and ignored the breach of the Blunt-Okazaki agreement involved in their unilateral definition of a "reasonable "fee" for pilotage. Mr. Yoshioka doubted whether anything he could say to the Navy would make them change their minds.
5. You urged strongly that we should not add another widely published incident to the existing Anglo-Japanese troubles and that the Navy should agree to provide a pilot for SS "Fatshan's down sailing tomorrow but not for the next upward trip on Tuesday August 6th, unless in the meanwhile we had reached agreement. The suggested formula was that 'Payment would be made to the Japanese Consul-General 'under protest' of the "full amount claimed by the Pilots Association from February 1st
to date, and that thereafter the amount of a 'reasonable fee' "would immediately be discussed and settled between the Japanese "and British Consuls-General." The cheque already paid would of
course be returned.
6. In the interval you would at once telegraph the situation and the proposed solution to our Embassy and to Messrs. Butterfield & Swire. You added that your personal view was (from conversations in Hongkong) that this solution would be acceptable, provided that a reduction, as promised Mr. Stark Toller by Mr. Kita on April 20th, in the existing scale of fees was agreed upon.
Mr. Yoshioka promised to urge this solution upon the Navy and to inform you. You made it quite clear that, if the Japanese broke the agreement and prevented the sailing of the "Fatshan" the Agreement would be in suspense and that, as from that date the Hong Kong Government would agree to no further sailings of Japane se vessels under the Blunt-Okazaki Agreement. Mr. Yoshioka further concurred that of course this settlement was "without prejudice" to our Treaty position and rights, (or to the Japanese claim of the right to impose rules and regulations in occupied areas).
(Intld) A.P.
31/7/1940.
/1940.