NOTHING

ΤΟ

BE

WRITTEN

IN

THIS

MARGIN.

Registry

No. F 2510/78/10

20

FOREIGN OFFICE, S.W.1.

April, 1941.

Draft.

Mr. Broadmead,

Shanghai.

Shanghai telegram No. 35 to Canton

of 31st March - Hong Kong-Canton shipping].

I am rather disturbed that in this matter

of the Hong Kong-Canton shipping traffic we are

being led away from the principle hitherto laid

down that while private individuals and firms

may make what arrangements they consider best in

their own interests His Majesty's Government will

not negotiate any agreement with the Japanese

authorities infringing either our treaty rights

or the sovereignty of China.

Article 2 of the

Nine Power Treaty has still to be considered in

this respect. I am aware that we have been forced

to compromise in certain instances, but it is

advisable to maintain the principle to the best

of our ability.

2. As regards the Blunt-Okasaki arrangement,

it was stipulated at the time that it was

informal, temporary and without prejudice to our

treaty rights. On the same understanding

therefore I am prepared to accept the Japanese

proposal for a 30% reduction in the pilotage

tariff without further commitment. But it should

be made clear that His Majesty's Consul-General

Cannot be involved in any further negotiations

about port control, the handling of cargo by a

Lighterage and stevedore monopoly and so on.

An official agreement of that nature would

prejudice the position at other ports and

otably at Shanghai. What arrangements private

firms/

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firms are willing to accept is their own affair.

3.

On the above basis I concur in the

resumption of Japanese sailings in the previous

ratio of at least one British ship to two

Japanese. Otherwise I think we had better

suspend sailings and await the next Japanese

move. Since the British community at Canton

will not be seriously affected and in the light

of Sir Archibald Clark Kerr's telegram No. 250

[of 22nd March it would seem that we are in a

good position to make a stand.

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