CO129-585-2 Sino-Japanese conflict- release of captured British ships 6-3-1940 - 2-10-1940 — Page 48

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5. It will be seen from the enclosed telegram that the

Japanese Government would probably be prepared to release the

two ships on condition that all claims for compensation were

waived and that His Majesty's Ambassador recommends acceptance

of the Japanese Vice-Minister's offer without prejudice to

the legal position of His Majesty's Government. Lord Halifax

has informed Sir Robert Craigie that it will be necessary in

the first place to inform the owners of the offer, but that

he doubts whether they will be inclined to waive all claims

for compensation in view of the very considerable losses they

have suffered (see telegram to Sir Robert Craigie enclosed

herein).

6. It would appear to be undesirable that His Majesty's

Government should incur any responsibility in this matter by

recommemding acceptance of the Japanese Government's offer

and it is therefore suggested that it should be communicated

to them without comment in the first place.

7.

Lord Halifax would therefore be grateful if the

Governor of Hong Kong could be informed of the position by

telegraph and if he could obtain the views of Messrs.

Williamson on the Japanese offer. Should Messrs. Williamson

request the advice of His Majesty's Government, it might be

explained to them that in His Majesty's Ambassador's view, the

maintenance of their claims may merely lead to further

indefinite detention of the two vessels. At the same time,

if the companies decide to take this risk, His Majesty's

Government would have no alternative but to submit the claims

to the Japanese Government.

It might, however, be pointed

out informally that the companies would at least be well-

advised to reduce such claims so substantially that the

Japanese Government would still have an inducement to settle

this matter quickly, although this again is a matter which

the