CO129-585-5 Sino-Japanese conflict- shipping on Pearl River 3-1-1940 - 25-8-1940 — Page 159

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Japan's present method of meeting her local expenditure

in military yen).

His Excellency added that it was proposed to apply

the same measures mutatis mutandis to the Pearl River.

Vice Minister for Foreign Affairs added in answer to

my enquiry that the above arrangements were intended to be

purely transitory and were quite independent of the emergence

of the new Central Government for China. It was obvious that

in the early stages special precautions would be necessary in

order to convince the army that the Lower Yangtze could be

re-opened to trade without serious loss to nitary efficiency;

but once trade had started moving and the present apprehensions

had been shown to be unfounded, restrictions would be

progressively reduced.

I thanked the Vice Minister for Foreign Affairs for this

communication, which I felt sure you would receive with great

interest. It would of course be unfortunate if this

constructive measure were to be hedged about with so many

restrictions as to impair its utility, but I felt sure that

you would be ready to consider that the safeguards, which the

Japanese authorities might consider to be necessary, as

transitory measures.

Mr. Tani will shortly let the Japanese Government have

detailed proposals.

Addressed to Foreign Office. Repeated to Shanghai

telegram No. 246.