CO129-563-18 Sino-Japanese War- stopping of British shipping by Japanese 11-9-1937 - 29-12-1937 — Page 63

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2.

in them. He expressed surprise and some incredulity

at this information, but retired to consult hia

principals.

4. During the course of the interview Mr. Froland

divulged that Chinese shipping interests in Shanghai

are seriously concerned for the safety of their vessels,

at present on charter to Japanese companies, and

engaged mainly in the conveyance of scrap iron etc. from

America to Japan, while the charterers themselves are

becoming increasingly reluctant to enter into engage-

ments with vessels plying under the Chinese flag.

5. In the somewhat similar case of the Reonomic

Transport and Lighter Company Limited, (see Shanghai

despatch to Peking No. 385 of the 9th November, 1934 and

Peking reply No. 52 (11/3.0/1935) of the 4th February,

1935), registration of the Company's launch and lighters

was refused on the ground that, although incorporated

in Hongkong, their principal place of business was not

situated in the British Dominions. In the present case,

however, Vallem and Company Limited have their principal

place of business in Hongkong, and, it is probable

that they will now apply to the Colonial authorities for

the transfer of these Chinese-owned vessels to the

British register, and possible that the Hongkong Govern-

ment may not be in a position to refuse registration.

It would, however, in this event still be open to us to

prevent the vessels from plying in Chinese waters under

the British flag by dealing with them under the China Forts Amendment Regulations 1928 (King's Regulations No.1 of 1928).

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