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of the Administration, Chinese as well as British, doubtless wish

to have guidance is how they should act, in order that they may best

impede the endeavours of the Japanese Government to obtain the great-

est possible quantity of coa from the Kaiping Mines for purposes

calculated to increase the Japanese war effort.

On a general consideration of the situation of transport

prior to the outbreak of hostilities, and in the light of the events

which have since occurred, the Committee of Management of the Chinese-

Engineering & Mining Company are convinced that the amount of coal

becoming avaiable for such purposes from month to month must now be

limited by the transportation resources available to the Japanese and

not by the output of the Kai ping Kines. Though at the outbreak of

war the stocks of coal in the Administration's stocking-ground were

low, it is surmised that during the last half year stocks at the

Mines and at Chinwangtao, the port of shipment for Japan, must have

greatly increased. In such circumstances the reduction of the

output of the lines, or even the temporary stoppage of output, would

and not affect the rate of supply to Japan/to other places where work is

being done for the Japanese, and by withholding their co-operation in

the working of the Lines British employees of the Administration

could not possibly expect to accomplish more than this. When Great

Britain declared war on Japan a state of hostility between China and

Japan had already existed for three years. Throughout the whole of

this period the Chinese employees of the Administration continued to

A val work the Mines, notwithstanding the fact that some 2 million tons a

were being year have been

exported to Japan, and that it was well-known that

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