CO537-3707 — Page 97

Cypher/OTP

DEPARTMENTAL DISTRIBUTION

FROM NANKING TO FOREIGN OFFICE

Sir R.Stevenson, No.609

21st July,1948.

D. 10.00 am.

AR. 11.50 a.m.

21st July,1948.

21st July,1948.

Repeated to Hongkong,

Canton Saving.

IMPORTANT

LIGHT

CONFIDENTIAL

Addressed to Foreign Office telegram No.609

of July 21st, repeated for information to Hongkong and Saving to Canton.

My telegram No.597 and your telegram No.549.

Canton outrage.

In conversation with President Chiang on July 20th I told him of the painful impression made on me by the reply given to me by the Minister for Foreign Affairs when I had raised with him the question of compensation for the Canton outrage.

2. President Chiang was at pains to explain that the Chinese Government were anxious to see this case and that of Kowloon walled city settled simultaneously. Chinese Government were eing accused of extreme weakness and Kowloon case was constantly being cited as an instance of this. Government would expose themselves to very damaging,attacks by their enemies if they dealt with Canton case in advance of Kowloon.

3. I replied that while I could understand their apprehensions I could assure him that the flat refusal of Minister for Foreign Affairs to proceed any further in the question of compensation for the Canton outrage before a settlement of Kowloon City case would not only be as disturbing to His Majesty's Government as it was to me but would cause a deplorable impression in the United Kingdom, when, as was possible, you had to give an answer to that effect to a Parliamentary question. Chinese Government would undoubtedly be regarded as seeking to justify in some manner the wanton destruction of Consular premises of a friendly power.

4. After some discussion with a representative of the Ministry of Foreign Affairs who was present President Chiang told me that reply given to me by the Minister for Foreign Affairs should not be regarded as a refusal to proceed with compensation question but merely as an

expression of the/..