CO129-563-18 Sino-Japanese War- stopping of British shipping by Japanese 11-9-1937 - 29-12-1937 — Page 25

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and all these narrow streets are in a chronic state of being blocked to traffic as a consequence. To what extent, if any, similar benevolences are paid by native firms is unknown,

6. The Sino-Japanese conflict has brought a new difficulty. In all the foreign firms the most valuable technical experts are Chinese nationals who have been employed by the firms for a great many years. These at first wished to remain, and have so far stayed, but the tendency to seek repatriation increases rapidly, and it is problematical whether many will be here by next tea season. If many are gone, the blow will be exceedingly severe.

7. Messrs. Carter Macy and Jardine Matheson have also suffered directly from the campaign of spy-mania, directed against British shipping, reviewed elsewhere. The main reason why the foreign firms have not been forced out sooner is that the tea trade in England and America is highly organised, and the foreign firms here represent powerful interests, with which, in their capacity as consumers, Formosa is bound to reckon. Messrs. Jardine, Matheson and Co. are considerably more vulnerable than the others, since, alone of the four, they do a good deal of export to miscellaneous buyers abroad as well as to their principals. Even with this bargaining power behind them, however, the position of the local firms is increasingly difficult, and, if they went, British shipping interests would also suffer a blow.

8. Apart from tea, there are two British commercial ventures. Mr. S. Elphinstone, a British subject, controls the Tokki Gomei Kaisha, which has a monopoly of the Formosan sulphur output, and also has some interest in coal. In April 1937 an attempt was made by the Taiwan Mining Company to bluff him into selling his interests at a low price, on the ground that otherwise he would be expropriated by the military. Mr. Elphinstone refused to sell, and went off on a world tour, from which he was forced to return in September by the threat caused to his interests by the Sino-Japanese conflict. Since his return he has again received tentative approaches, but a more immediate danger to his interests is his inability to export his products. The local authorities are main- taining an unofficial, but none the less effective, control over exports to Hong Kong; and sulphur and coal are both treated as contraband. If the struggle is prolonged, it would appear that Mr. Elphinstone's position will become very difficult.

9. The Rising Sun Petroleum Company has an installation at Tamsui and a sales office at Taihoku. They have so far been well treated in regard to quotas, but since the conflict their sales have severely fallen. The firm is also being caused some anxiety by a sustained effort on the part of the Shinchiku police to involve native members of the staff on a charge of procuring information of military value. In the middle of October the theatre of investigation was transferred to Taihoku, and leading members of the native staff were examined on successive days for nearly a week. It is hoped, however, that the case will not develop seriously, as the military police in Taihoku are aware of the matter, and apparently consider that Shinchiku is making a fuss about nothing. Religious Missions.

10. The Canadian Presbyterian Mission is centred at Taihoku, and the English Presbyterian Mission at Tainan. Both have been in serious trouble during the past four years, and have been compelled to dispose of their educational interests, but neither is in special trouble at the moment. The Canadian Mission has a hospital in Taihoku, and Dr. Gushue Taylor, a member of the mission, runs a leper home in the country south of Tamsui.

Perpetual Leases.

11. Various British firms, missions and individuals (some of them absentees) hold land in Formosa under perpetual lease. Perpetual leases in Formosa do not come under the settlement recently made in Japan, because they have not been the subject of controversy. Neither His Majesty's Government nor the leaseholders have maintained that these leases enjoyed privileges in regard to taxation, and the Foreigners' Land Ownership Law has never been extended to Formosa. Consequently, while so far there is no controversy, there is also no prospect of the termination of this peculiar form of tenure; and the existence of these rights in land, some of which is not being occupied or developed, holds the

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seeds of possible trouble. Messrs. Jardine Matheson are at present trying to sell such a plot to a Japanese concern, which squatted on it unlawfully; and the latter are trying to force a sale at a nominal figure on the ground that it is inexpedient for a foreign firm in Formosa to go to law.

British Shipping.

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There have fortunately been no more of the controversies over entry into unopened ports," which have caused such serious difficulty and suspicion during the past three years. During the period of good relations in the spring, British salvage companies were allowed to salvage two wrecks on the Formosan coast, without any contretemps more serious than being mulcted in one case of nearly 5,000 yen for customs duty on salvage gear that was re-exported as soon as salvage was finished. The peculiar difficulties, however, to which British shipping, and those who act as agents or stevedores, are subjected, can be seen from the review of the City of Pittsburg and Alice Moller cases made elsewhere; and by the fact that a master of a British ship in Tamsui was refused permission to visit the consulate, until His Majesty's consul intervened in a manner which forced the Japanese authorities to give way.

13. This review should suffice to show that, while British interests in Formosa are few, every one of them is in continual need of consular advice and protection, and, if such assistance were not freely given, it may be surmised that, in the conditions of to-day, they would be forced to withdraw from the island within a very short time.

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