CO129-628-12 War Damage Compensation- USSR claims 1-1-1950 - 31-5-1950 — Page 22

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MINISTRY OF TRANSPORT

Far Eastern Regional Office

SINGAPORE

153/18A

My Dear General,

24th February, 1950

The Associated Press has put out a story here which has had some publicity that the Russians have sold two ships and are about to sell the third ship to the Chinese in Hongkong. In the form in which the story was put out the implication is that Russia has decided to supply China with the means to invade Hainan or Formosa, or at least to help to break the blockade. I assume you will have realised at home that this implication is entirely unjustified. The three ships involved are all complete wrecks. The two which have actually been sold, the "Svirstroi" and the "Simferopol", were caught in Hongkong under repair in 1941, when it was invaded by the Japanese. They were not sunk at that time by the British as denial action, since they were neutral ship but were damaged in subsequent bombing attacks. They have been beached in derelect condition ever since I have been in Hongkong. There have been long negotiations between the British Embassy in Moscow and the Soviet Government as to whether their loss was covered by the War Risks Insurance Office Policies which were in force at the time when Hongkong fell, but not at the time when they fell into Japanese hands and were damaged. Haigh can tell you the details of that affair.

There has also been some question of the payment of watchmen's charges. There is no question of these ships going to sea within months, if in years, and on an ordinary commercial basis they are fit for nothing but scrapping.

Should this story receive publicity at home I think you would be well advised to inform the Press of the true facts.

Yours sincerely,

D.F. Allen.

Major General R.C. Money,C.B.M.G.,

i

Ministry of Transport,

Berkeley Square House, London, W.1.