CO129-431 - Governor Sir May - 1916 [1-2] — Page 474

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unable to interfere with their business and that her "Trading with the Enemy' proclamations are of no value outside of British Dominions. The opportunity is too good to be lost for Germans to point out to Chinese that British merchants care for nothing but profit and are only too glad to trade with their enemies, even against the wishes of the Government, if the business is profitable.

The incongruity of the situation is further illustrated by letters from our Shanghai Branch in which we are asked to support a movement in favour of inducing British firms to withdraw their agencies from Germans and to appoint English representatives in their stead; this movement has received official support from His Majesty's Consul- General at Shanghai.

We lay the above facts before you in the hope that they may emphasise the desirability of some steps being taken on the lines suggested in our letter of the 1st February.

As a possible solution of the difficulties arising out of the present situation, we venture to suggest that an agreement might be made with the Allied Powers, which, while permitting trading with enemy subjects commercially domiciled in neutral countries provided they are living under the condition of lea loci, would prohibit such trading in countries where enemy subjects are under the jurisdiction of their respective Governments.

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that it is inadvisable, in present circumstances, to introduce further measures for the closer prohibition of trading with the enemy in China.

Since I last had the honour of communicating with the Foreign Office, the Association has received the following telegram from its Tientsin Branch :—

'Large General Meeting yesterday passed the following:- "Tientsin members express approval action hitherto taken by Committee in "matter restricted business relations British subjects with enemy subjects and in " view unanimity China Branches instructs incoming Committee take all possible steps increase disabilities by securing all practicable cessation business intercourse until conclusion hostilities subject to adequate co-operation Allies chief essentials. KENT, Chairman."

H

My Committee have now received expressions of opinion from widely separated parts of China; the unanimity of these opinions--that all avenues for trading with the enemy should be closed-is remarkable.

Under these circumstances my Committee respectfully venture to hope that it may still be possible to re-consider the question, and that an effort may be made to deal with it on the lines put forward in the final paragraph of our letter of the 9th March.

I have, &c.,

H.M. Under-Secretary of State

for Foreign Affairs.

I have, &c.,

H.M. Under Secretary of State

(Signed) F. ANDERSON,

for Foreign Affairs.

Chairman.

(Signed) F. ANDERSON,

Chairman.

China Association to Foreign Office.

China Association,

SIR,

China Association to Foreign Office.

99, Cannon Street, E.C.,

3rd April, 1915.

I have the honour to acknowledge the receipt of your letter of the 22nd ultimo on the subject of trading with the enemy.

I am directed to say that my Committee note with regret that His Majesty's Government, having consulted several firms connected with the Far East, have decided

SIR,

99, Cannon Street, E.C.

11th May, 1915,

The North China Herald of the 17th April, just received from Shanghai, reproduces a judgment of the Prize Court of Alexandria which seems to have an important bearing on the question of trading with Germans in China. I enclose copy of the judgment from which it will be seen that goods shipped by a German resident at Shanghai on board a German steamer which had been captured and brought before the Court were condemned on the ground that they were the property of an alien enemy. It was contended on

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