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nclosure in Shanghai P/L Despatch to Foreign Office, No. 80 of 14/3/39.

(COPY)

British Consulate-General,

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No. 113.

Copies to:

Sir,

SHANGAI,

14th March 1939.

262

Foreign Office, No. 80, (3), Tokyo, No. 42.

Commander-in-Chief

Commercial Counsellor, No. 10,

Naval Liaison Officer.

3

In my despatch No. 339 of the 23rd August, 1938, regarding the affairs of the Shanghai Licensed

Pilots' association, I reported that, despite the

opposition of the Japanese authorities, an exchange

compensation scheme had been successfully introduced.

2.

This scheme has been a marked success. From

the outset, shipping companies of all nationalities with

the exception of Japanese have paid the increased charges

without a demur, with the result that, although the

tonmage dealt with is still about 25 below the normal

figure, the receipts in currency from pilotage fees are slightly above the 'pre-war average, and the pilots

are reasonably well satisfied with the results attained.

Moreover, owing to the developments described below,

the Japanese shipping companies have now fallen into

line, and have agreed to pay exchange compensation.

3.

Although, as foreshadowed in paragraph 11 of

my despatch under reference, the Japanese authorities

took no action with regard to the exchange compensation

scheme beyond placing their disapproval on record, it was

not long before they again raised the question of pilotage

this time in connection with the filling of the three

His Majesty's Ambassador,

British Ambassy,

HIGHAI.

vacancies/

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