CO129-560-15 Traffic of arms to China 18-2-1937 - 15-11-1937 — Page 253

COPY.

My on 7230/1/1

Seilfeams

15

253

Mr. Bernard of Jardine Matheson's called this

afternoon to see Sir Henry Moore and my self. He had

already been to see the Foreign Office and the Board of Trade and so I thought there could be no possible harm in his coming to see us and giving us any information he could (actually he asked for the interview before he had received our letter of yesterday).

On the general question of the position of

Hong Kong he said that it was the inevitable centre for all shipments of arms or indeed any other substantial supplies

to the Chinese Government.

The only other possible source

was Soviet Russia. No ocean-going ship could get direct

up to Canton nor to the ports of Swatow, Amoy or Foochow. Ocean-going vessels could go into Saigon or Haiphong whence goods could be carried by coaster to Canton, but Hong Kong was the obvious place. From Hong Kong goods could be put

straight on to the rail and go via the new loop-line right

to the Centre of China.

The line as soon as it got off

Hong Kong territory was of course subject to being bombed

by the Japanese and there were big bridges which could very

easily be put out of action.

One important point he made was that as soon as the Japanese declare a list of contraband goods, no ship carrying other goods can also carry contraband goods. To

do so would completely invalidate their insurance.

Therefore, after any such announcement by the Japanese all contraband goods would have to go in special ships.

There

might