CO129-579-8 Sino-Japanese War- shipping on Pearl River 23-6-1939 - 4-1-1940 — Page 29

9 of 1940 file.

AX SECRET (2)

15838.34/37

76

29

GOVERNMENT HOUSE,

HONG KONG.

b b

Kmaß

Sir,

RECEIVED

12 DEC1939

O. REGY

28th November, 1939.

I have the honour to refer to correspondence on the

subject of the navigation of the Pearl River resting with my

secret despatch of 24th July, 1939, and to transmit for your information the accompanying copy of a letter (with enclosures)

received from Messrs. Butterfield and Swire.

2.

(with

As regards direct trade between Canton and Hong Kong

I have reliable information which confirms the statements made

by Messrs. Deacon and Company, Limited, Canton, to the effect

that this is now of considerable dimensions.

Cargo is

principally shipped from a secret wharf near Canton on board

lighters which are said to bear the Japanese naval ensign (not the Portuguese rlag) and which proceed to the island of

Taishan near the mouth of the Pearl River. From there the

goods are transferred to vessels registered in Hong Kong which make the round trip, on a clearance nominally for the port of Nam Tau (just beyond the British frontier), in about three or

The Chinese syndicate which controls the traffic

four days.

is said to be under the Japanese aegis.

3.

Although this is in contravention of the agreement quoted in my earlier despatch, and although the Chinese

Maritime Customs are defrauded of revenue, I incline towards the view held by the British Trade Commissioner, Mr. J.C.

THE RIGHT HONOURABLE

MALCOLM MACDONALD, M.P.,

&C.,

&C., &e.

of of

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