FO371-23518 — Page 68

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6.

for this occasion only, and on the understanding

that a precedent was not considered to have been

thereby established, I was prepared to forego the

British claim to two vacancies. After a certain

amount of discussion and delay, the Netherlands and

German Consuls-General waived any claim which their nationals might have had to the third vacancy, and the

Consular Body agreed that all three vacancies should be

filled by Japanese. The majority of the Consular Body,

including myself, made their consent conditional on

future vacancies being filled in accordance with the

quota system, but, in view of the reservation made by

his predecessor in 1936, the Japanese Consul-General was

unwilling to agree to this stipulation, and would not go

further than to express the opinion that the manner in

which future vacancies should be filled "should be

decided upon according to the circumstances at that

time." In the same letter, Mr. Hidaka renewed his

assurance that, on the appointment of Japanese candidates to the three vacancies, the Japanese shipping companies would not fail to pay the exchange compensation on the

pilotage tariff, including the amount in arrears.

10.

The present position, therefore, is that three

Japanese apprentice pilots have been appointed, and the

purchase money for their shares in the Shanghai Pilot

Boat Company has been guaranteed by the Yokohama Specie

Bank. As regards the payment of exchange compensation,

however,/

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