The British Ambassador (Lindsay) to the Secretary of State

No. 76

Sir: With reference to the note which you were good enough to address to me on the 10th January last, I have the honour to inform you that the procedure in force in Hong Kong in respect to the transshipment of arms to China has been most carefully reconsidered by His Majesty’s Government in the United Kingdom in consultation with the Governor of Hong Kong.

It transpires that the Governor of Hong Kong was already considering how to deal effectively with the loophole pointed out in your note of January 10th; and would be very glad to cooperate with the United States Government with a view to closing it.

With this end in view the Government of Hong Kong suggests that they should be furnished with copies of all licenses or other forms of authorisation issued in respect of the export of arms to Hong Kong They would then, in those cases where Hong Kong was indicated as the port of ultimate destination, refuse to allow re-export to China without the production of a Central Government “huchao”.

The Government of Hong Kong add that it would not be practical to require, as evidence that goods were in transit, a through bill of [Page 719] lading, since through bills of lading from trans-ocean ports to Canton are not normally obtainable.

His Majesty’s Government trust that the above solution of the difficulty will be found acceptable by the United States Government.

I have [etc.]

R. C. Lindsay