FO371-23523 — Page 133

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Minutes.

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else the impression that we are withdrawing

from any but our own good reasons connected

with the war, and gradual withdrawal is

designed to buttress that idea. It follows

that there is no question of increasing our

naval strength at Chinese ports in present

circumstances, whatever may prove possible

later when Italy's attitude becomes crystal-

lised.

So far as discussions with Japan about

Tientsin are concerned, that is one of the

questions on which we hope to improve our

relations with Japan without sacrificing our

principles or evading our treaty obligations

towards China, in accordance with the policy

which has been enunciated in Parliament on

more than one occasion, e.g. by the Secretary

of State in the House of Lords on 3rd August

last.

Since in retaining a gunboat as long as

possible at Shanghai and at Canton our

intentions are not "symbolic" but are dictated

by regard for American and Chinese suscep-

tibilities, and since even these two ships aré

also to be withdrawn eventually, no question

of a "counterbalancing step" seems to arise.

Draft replies to Mr. Gull and Mr. Swire

submitted.

Auscoth December

December 22nd. 1939.

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THIS

MARGIN.

NI

NOTHING

TO

BE

WRITTEN

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