CO129-552-6 Traffic of arms to China 2-1-1935 - 27-12-1935 — Page 182

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sir.

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2nd September, 1935.

Your Fxcellency will have observed from the

gorrespondence enolored in my despatch No.730 of the 24th June last that Eia Majesty's Government have had

under consideration the desirability of controlling more strictly the parsage of arms through Hong Kong to China. Cases have ocurred where exporters have obtained licences for the export of arms on the representation that they were destined for Hong Kong, and where the Hong Kong agent has subsequently obtained for these arms transit facilities for China, by producing a contract with the Chinese importers for the supply of the same goods. It is obvious that such a practice constitutes an evasion for which is Majesty's Government cannot

assume responsibility, or the Chinese Government 's

regulations which have been accepted by the Government to which you are acorbaited. The majority of cases, so far as is known, have occurred in connexion with exporte

from the United States, and the United States Government have expressed their desire to gooperate with the Governor of Hong Kong in closing the loophole.

2. It has in opnsequenge now been deoleed thut, in the case of arms exported from those countries which have adopted the licence system, "in transit" faollities will only be granted in Hong Kong upon production of s copy of the export licence issued. The United States Government have indiouted that they are prepared

lia Excellency

The Right Honourable

Sir Eric Drummond, G.C...G., C.B..

eto.. etc..

Rome.

attio

provisionally!