CO129-585-2 Sino-Japanese conflict- release of captured British ships 6-3-1940 - 2-10-1940 — Page 44

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Cypher telegram from Secretary of State to Government of India, dated 11th March, 1940.

SECRET

1174.

Commerce Department.

Foreign Office have approached me regarding possible release of British ships SAGRES and LALITA, which were captured in April last by Japanese on ground that they were plying for benefit and under directions of Chinese Government, and are still detained in spite of repeated protests from H. M. Ambassador at Tokyo and British naval authorities.

2.

SAGRES is owned by Williamson of Hong Kong and at time of capture was under charter to Douglas Shipping Company. Both are British firms. Owners are claiming 1,000 Hong Kong dollars a day in respect of demurrage alone and have reserved right to claim compensation for any damage which may have been done to ship herself, her stores or equipment.

3.

LALITA belongs to Dholera Steamship Company of Bombay. She was chartered to Fukien Transportation Company of Foochow. Foreign Office have no record of any claim for compensation being made in respect of this vessel.

4.

H.M. Ambassador at Tokyo has advised Foreign Office that Japanese Government would probably be prepared to release the 2 ships on condition that all claims for compensation were waived, and has recommended acceptance of offer on these terms without prejudice to legal position of H.M. G. Foreign Offico have replied that it will be necessary in first place to inform owners of offer, but that it seems improbable that they will be inclined to waive all claims for compensation in view of very considerable losses they have suffered.

5.

H.M. G. do not wish to incur responsibility by recommending acceptance of Japanese Government's offer. Therefore please communicate offer to Dholera Company without comment in first place and obtain their views. Should Company request advice of H. M. G., it might be explained that in H.M. Ambassador's view insistence upon compensation might merely lead to further detention of vessel for indefinite period. If, however, Company decides to take this risk, H.M. G. would have no alternative but to submit claims to Japanese Government. But you might point out to Company informally that they would be well advised to put claim at figure low enough to inducc Japanese Government to settle matter quickly.

6.

Although you will probably wish Company to determine the line of policy they desire, it is doubtless to your intorest that release of vessel (which is on Indian register) should be secured as soon as possible.