CO129-585-9 Sino-Japanese conflict- Chinese custom stations 14-7-1940 - 17-12-1940 — Page 53

Colomid Jes

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F3527/1/10.

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LIMITED DISTRIBUTION.

12

CONFIDENTIAL

Decypher.

Sir A. Noble (Shanghai).

30th July, 1940.

D. 6.47 p.m.

R.

10.30 p.m.

No. 648.

*******

31st July, 1940. the Coun 31st July, 1940.

of the

Jawor Sec: atary of State for Foreign ...airs

Foreign

2 AUG 1940

auts

CONFIDENTIAL.

Coppy sant

TAsy

40

Relations between Chinese Maritime Customs and Japanese are again in state bordering on crisis, as an indirect result of Japanese being on Hongkong border.

2. In October 1939 the Japanese Consul General at Hongkong asked the Commissioner of Customs at Kowloon.

(1) To place Kowloon Customs and branches under

Japanese authorities in Kuangtung.

(2) To enforce occupied areas tariff.

(3) To deposit revenue in Yokohama Specie Bank and (4) To withdraw only minimum to meet local ad-

ministrative expenses. Consul General maintained that as it was possible to enforce Submission on stations in Chinese territories above demand should be regard- ed as applicable to Head Office in Hong- kong. The Inspector General of Customs took the line that the question should be held in suspense until the Japanese were in permanent occupation of the whole frontier, including Mirs Bay and pointed out that he could not be compelled to take action in a British Colony or in unoccupied territory. Japanese Consul General seemed to want control over Hongkong Office as a matter of "face". Question did not however become acute and the Japanese shortly afterwards withdrew from the border area.

3.

Japanese have now returned to the charge though they still are not in occupation of Mirs Bay and threaten that if their demands are not met they will reopen the frontier stations under an independent regimé, thus undermining the integrity of the Customs administration. Commissioner of Customs at Kowloon has tried to work in accordance with instructions issued in 1939, i.e. he has pointed out that posts in occupied areas could be put under the control of some other occupied port, but that he cannot properly be required to deposit in Yokohama Specie Bank, revenue collected from posts in unoccupied territory. Japanese refuse to accept these contentions.

4. Situation is more serious than in 1939 as Japanese are surer of their ground. They seem determined to gain control of the Hongkong Office or to disrupt Customs

Administration. /