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4. Sir Austen Chamberlain's first objection is that these proposals involve a reversal of our present policy, especially as regards the dispersal of military force. From this criticism it is clear that the Secretary of State has misunderstood our for such proposals. We were careful to state that the use of military forces was
(C.I.D. Paper operations as raids by landing-parties to destroy Chinese forts No. 793-B, paragraph 8), and in our Conclusions we proposed the use of troops "for the purpose of completing the destruction of forts or guns, &c." In case this wording is not sufficiently explicit we wish to make clear in this Report that we pro- posed only the temporary use of troops to supplement the Naval Forces at the disposal of the Naval Commander-in-Chief. They would be engaged only on operations of a temporary character, on the conclusion of which they would immediately be re-embarked and returned to Shanghai as soon as their services could be dispensed with. The situation at Shanghai is now comparatively quiet, and we believe that small forces could be spared by the General Officer Commanding for temporary operations, such as those described above, without risk, but we were careful to make the proviso that the forces should be limited to those "which the General Officer Commanding can spare." In any event no reversal of our present general policy of concentration is contemplated.
5. The Secretary of State's second criticism is that our proposals would take all control of the situation completely out of the hands of the Home authorities. This was our intention in so far as giving a free hand to the men on the spot to take prompt retaliatory action wherever and whenever occasion arises, and was not intended to convey the interpretation applied by the Secretary of State. Unless greater latitude is given to the men on the spot our action is almost bound to be too late. The matter is well stated in a telegram from the Secretary of State for Foreign Affairs to Sir Miles Lampson in which he reports the opinion of the United States Secretary of State to the effect that
"It would be unwise to reply to Chen as it was doubtful whether he any longer represented Southern Government; as regards sanctions, they would be worth while considering if there were a Government against whom they could properly be enforced, but at present it was impossible to say whether we would be striking friend or enemy.'
This is why, in our Second Report (C.I.D. Paper No. 793-B, paragraph 6), we suggested that it was too late to take sanctions at Nanking and elsewhere as previously proposed.
6. As regards the Secretary of State's third criticism, namely, that our proposals do not provide an efficient substitute for the application of sanctions, we do not dissent from the view that the men on the spot may have to supplement this continuing sanction by other measures, more particularly if, as the Secretary of State suggests in paragraph (3) (a), firing ceases on the Chinese side. Of course, if, as he suggests at (b), firing continues, we think that the measures of retaliation we proposed should also continue. As regards the Secretary of State's point (c), we consider that our reprisals will have to be directed equally against parties firing on us who had nothing to do with the Nanking outrages. In any event, we should only hit the guilty parties.
7. On the whole, we see no reason to modify the recommendations in our Second Report, and, broadly, we consider that, as far as possible, latitude should be given to the men on the spot in regard to the method and moment for the application of such measures of reprisal as have been generally approved by His Majesty's Government,
8. We understand that the Secretary of State for Foreign Affairs considers that as the Nationalist Government is still at Hankow, that is the proper place for reprisals all the more so because the Japanese are deeply engaged at Hankow. We notice that in his telegram No. 993, dated the 21st April, the Naval Commander-in- Chief urges
most emphatically the need for immediate action against Hankow, which is the centre of Extremist Party." We notice, also, that Sir Miles Lampson, in his telegram No. 758, repeating a telegram to the Naval Commander-in-Chief,
says-
"I am entirely of same opinion, as my telegram to Foreign Office will have shown you. Prompt action is essential, and only thing that holds us back now is the desire to carry Japan with us, America having dropped out.
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We do not dissent in principle from the application of sanctions at Hankow. It is indeed difficult to say where else sanctions could be applied, except possibly at Canton, but we are not yet in a position to report on the feasibility of that operation. From Nanking to the mouth of the Yangtse inclusive, all possible objectives for sanctions which have not already passed into the hands of the Northern Chinese troops are now under the control of Chiang Kai-shek; and although Chiang Kai-shek's bona fides are not trusted by Sir Miles Lampson, we are under the impression that His Majesty's Government do not wish to take any step to antagonise him. We are by no means sure, however, that it is not already too late to apply sanctions at Hankow for the Nanking outrages. There are, at any rate, some signs that the grip of the extremists (who were responsible for the Nanking outrages) is loosening there.
10. We are not quite clear as to the nature of the action proposed at Hankow by the Naval Commander-in-Chief and Sir Miles Lampson. In his telegram of the 21st April, the Naval Commander-in-Chief speaks only of the need for immediate action. In an earlier telegram dated the 15th April, he suggested that the British Concession should be reoccupied. Sir Miles Lampson has hitherto favoured the destruction of the Hankow Arsenal, a view which was shared by the Ministers at Peking and the Powers concerned in the Nanking affair.
11. In our first Interim Report on possible sanctions (C.1.D. No. 792-B), dated the 14th April, we were opposed, in the conditions then existing, to the destruction of the Arsenal at Hankow as a measure of sanction, on the ground that the destruction of this Arsenal might antagonise the various forces hostile to the extremist faction at Hankow, which are probably counting on obtaining the use of the Arsenal sooner or later. This view, however, was transmitted to the Naval Commander-in-Chief in China, who is in a better position than we to judge the importance of this factor. If at a later stage the men on the spot think that the time has come when it is desirable to destroy the Hankow Arsenal, we think they should be given authority to do so. The moment for this will depend upon the circumstances attending the reoccupation of the Hankow Concession. For example, if the reoccupation of the British Concession is successful, the need for this operation may not arise. On the other hand, it may be expedient on military grounds to destroy the Arsenal before reoccupying the Concession or for its retention. Should it be unnecessary to destroy the Arsenal before reoccupying the Concession, its subsequent destruction might serve as an adequate sanction for the purpose of "saving face," should the Concession eventually have to be evacuated. These are matters which the men on the spot alone can judge. When referring to "the men on the spot we mean the Naval Commander-in-Chief and the British Minister at Peking, together with the Senior Naval Officers and Diplomatic Representatives of the Powers ready to associate themselves in sanctions.
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12. In our first Interim Report (C.I.D. 792-B) we expressed the view that-
"in present conditions the re-occupation of the British Concession at Hankow, involving the maintenance of a military garrison there, is not considered a feasible operation."
13.
"
We adhere to this opinion. It would no doubt be possible to hold the Concession with a military force for a time. In October, however, when the river falls and cruisers can no longer be maintained at Hankow, maintenance of this force might prove impracticable. Its withdrawal would involve great loss of prestige. A military commitment of this kind would be contrary to the general principle which we have hitherto followed consistently, of avoiding the scattering of our forces.
14. At the same time, we can understand the political advantage of a re-occupation of the Hankow Concession, not merely as a reprisal for Nanking (for which purpose, like all other sanctions, it comes rather late), but as a first step in abrogating agreements which have been consistently broken by the Nationalist Government. We are aware also that the Japanese are still maintaining their If the Concession with comparatively small forces landed from men-of-war. re-occupation of the Hankow Concession is desired by His Majesty's Government, we consider that it should be carried out by means of detachments landed from ships, supplemented from the Royal Marines at Shanghai, and if necessary by a few troops who would virtually be serving as landing parties in the same manner as marines.
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