CO129-579-8 Sino-Japanese War- shipping on Pearl River 23-6-1939 - 4-1-1940 — Page 33

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in Nippon Kisen Kaisha vessels from Canton and evidently

it is a business which will increase. Shippers are not

our former ones (who have unpaid export freights outstanding)

but new men, according to our Chinese Manager. All ship-

ments it will be noted are in Japanese names."

In the third place, there is the question of the trade

between Canton and Hong Kong. It has been no secret for some time

that in spite of the nominal prohibition of the movement of cargo,

cargo is in fact moving in either direction on payment of sub-

stantial comissions to various Japanese, and we now enclose copies

of two reports which we have received from Messrs. Deacon & Co. Ltd.

of Canton, and one from a reliable Chinese source, which indicate

in greater detail the way in which this trade is now being carried.

It is evident that the agreement under which we now

operate, while it has the dvantage of enabling one steamer to run,

and of serving the needs of the European community on Shameen, now

serves primarily to exclude British ships from this port whilst

enabling the Japanese to develop their trade, particularly the lucrative trade between Canton and North China ports which was

formerly, to a considerable extent, in the hands of British shipping companies, and we have the honour to suggest that the time has come to make a further move for the freer navigation of the Pearl River by British tonnage, and that in any further discussions in connec- tion with navigation H.M. Government should now get away from the existing basis of agreement with the Japanese and insist that the general trade to Canton from other ports and not only that from Hong Kong should be included in the discussions.

at Canton.

We have sent a copy of this letter to H.. Consul-General

Copy to H.. Consul-General,

Canton.

We have the nonour to be, Sir,

Your faithful servants,

Butterfield and Swire.