Cypher/OTP
POLITICAL DISTRIBUTION.
FROM NANKING TO FOREIGN OFFICE.
Sir R. Stevenson. No. 402.
1st May, 1948.
D. 10.35 a.m. 2nd May, 1948.
R. 12.21 p.m. 2nd May, 1948.
Repeated to Canton and Hongkong.
CONFIDENTIAL.
Addressed to F.0. telegram No. 402 of May 1st, repeated for information to Canton and Hongkong.
Canton incident.
7- MAY 1948
The Director of the European Affairs Department of the Ministry of Foreign Affairs informed His Majesty's Minister May 1st that Minister for Foreign Affairs was much embarrassed by the wide margins between the amount of £300,000 claimed in my note of April 20th (copy to you in my despatch No. 323) and the assessment of the local Chinese authorities and the Chinese Government investigators which came to less than £100,000.
2. The Chinese estimate of the damage to buildings appears to have been based upon original cost less 15% depreciation and upon only 70% damage, in consideration of the fact that the walls are still standing. losses seem to have been arbitrarily calculated.
Personal
3. His Majesty's Minister emphasised that His Majesty's Government held the Chinese Government [? grp. omtd.] for payment of the full costs of building Consular and other premises of a similar quality to those destroyed or damaged, and that in the case of the Consulate [grps. undec. percentage estimates] had been made by the experts of His Majesty's Ministry of Works, the Chinese Government therefore could be assured that claims had been seriously scrutinised and that similar principles applied to personal losses. His Majesty's Minister expressed confidence that such a manifestly inadequate figure as that mentioned by the Ministry of Foreign Affairs was entirely unacceptable and would cause disappointment to His Majesty's Government. He therefore urged realistic response on the part of the Chinese Government in amends for this deplorable incident.
4. The Director of the European Department was at pains to explain that this discussion was intentionally informal with a view to ascertaining whether we could scale down our figures so as to approximate to the Chinese figures more closely with a view to increasing the chances of the Minister for Foreign Affairs obtaining acceptance by the Chinese Government. His Majesty's Minister naturally gave no encouragement that such re-examination might reduce the amount. The Director of the European Department said that the Ministry of Foreign Affairs would instruct the Canton authorities to complete revised estimate taking replacement costs into account.
/5.
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