CO129-564-5 Possible removal of Chinese Government Bank's headquarters to Hong Kong 31-8-1937 - 27-11-1937 — Page 27

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both belligerents.

The first question which arises here is

whether allowing the Chinese government banks to do as suggested

would amount to giving direct aid. The second question is

whether if it did amount to direct aid, it would be aid given

by the government of Hongkong as such, for there is nothing in

the law of neutrality within certain limits and under certain

conditions to prevent private neutral persons, companies or

organisations from giving aid to the belligerents.

If the existing law of Hongkong as it now stands permits

of this operation, it might be possible to argue that the

government are not doing anything themselves directly to lend

assistance to China. In such an event the Japanese complaint,

if any, would have to be that the government of Hongkong had not

prevented the operation. Assuming, however, that the Chinese

banks are government organisations and that Hongkong law has

expressly to be amended to permit of the operations of the bank

being conducted from Hongkong, then I think it will come very

near to a case in which a neutral government gives actual and

direct assistance to a belligerent.

It is hardly possible to carry the matter further without

more details.

(Intd.) G.G.F.

30th August 1937.