FCO 21/93 Foreign, including British, banks and problem of staffing

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PART

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CONFIDENTIA

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FOREIGN OFFICE

DEPT.

FAR EASTERN

TITLE: CHINA

ECHIMIC ECO AMIC FOREIGN

REFER TO

DEPT.

NAME

DATE DEPT.

AFFAIRS INTERNAL

BANKS

REFER TO

NAME

REFER TO

DATE DEPT.

NAME

DATE

F. EJS.

EESS.

LA. Howe Ejs.

PA. B

7/5

1995.

Ess 15/5.

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18/5.

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127

1878.

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EJs.

חוויה

138

Dowling Street.

126 23/5

Efs₤19/6. 2016

OPENED

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Room

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DO NOT RETAIN FILES AND PAPERS UNNECESSARILY RETURN THEM TO REGISTRY FOR B.U. OR P.A.

FILE

CLOSED

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(NR. The gesing of this jacket must be the same as that of the highest graded document card ini. The appropriac uzgrulling slip must be affixed when ever necessary.)

CONFIDENTIAL

PART

Ed (5094)

Reference.

Note for file.

Folios: 100

Cofid

102

109 112-113

119+ (130)

Fes/4 (A)

to Kuala Lumpur. 10.

UNCLASSIFIED

ہال

1375

Mr Dendrit Mr Mustan

Saf.

Enter

With the compliments of

THE OFFICE OF

THE BRITISH CHARGÉ D'AFFAIRES

G.G.H. Walden RECEIVED IN

ARCHIVES No. 31

P.J. Weston 18 SEP 1968

PEKING

Fes 4

28 August, 1968.

J.D.I. Boyd, Esq.,

Far Eastern Department.

Foreign Office.

5/4

[

NOTHING TO

BE WRITTEN

IN THIS MARGIN,

Minutes.

Record of a meeting on 26 August between Ir. Cradock and Kr. Lau

of Consular Department.

131

Mr. Cradock began by enquiring about the identity of the responsible official who was receiving him. Hr. Lau gave his name and described himself as a Deputy Division Chief of Consular Department.

2. Kr. Cradock said that he had come to the Ministry of Foreign Affairs on a very serious and urgent matter. Mrs. Johnston, the wife of the former Manager of the Chartered Bank in Shanghai, had telephoned him from Shanghai on 25 August to tell him that at 2 a.m. the previous night rep- resentatives of the Public Security Bureau had come to her house and had taken her husband avay under arrest, They had also taken a meber of items from Mr. and Mrs, Johnston's personal possessions. Later the same morning, they had called at the office of the Chartered Bank where the present Manager, Mr. Cannings, was present, and had taken away a mamber of riles belonging to the bank. Kr. Cradock said he was naturally seriously concerned at this news and assured hin that this concern shared by RMG. His concern was deepened by his knowledge of Kr. Johnaton's personal situation. He was Manager of the Shanghai branch of the Chartered Bank until 24 July of this year when the Department of Commerce and Industry in Shanghai formally accepted that Mr. R. Cannings, who had recently arrived in Shanghai, "should take over the office of Manager from Mr. Johnston, This meant that Mr. Johnston had no further duties in Shanghai and he had already applied to the Public Security Bureau in Juns for exit visas for himself and his wife to leave China in early July. visas had still not been granted at the time of his arrest, in spite of his having on two subsequent occasions requested

These

urgent issue of the visas for special reasons, The first occasion, on 3 July, concerned the serious illness of Kr. Johnston's 83 year old mother in Britain whose only son he was and on whose account he wished to return to England urgently. The second occasion was in the week preceding his arrest when after he had been to the local hospital for treatment the hospital had given him a certificate stating that he was suffering from a kidney or bladder complaint and would probably require an operation in due course he had immediately handed a copy of this certificate to the Public Security Bureau to support his visa application. Mr. Cradock said that he had a copy of the certificate with him, and said that Mr. Lau would understand his concern for Mr. Johnston's well-being was increased by this knowledge of the poor state of Ir. Johnston's health

/that

../(Mr.Cradock

Minutes.

Mr. Cradock handed the copy of the certificate to Mr. Lau, who accepted it). Mr. Cradock requested immediate information of the charges against Mr. Johnston, and permission for a representative of the Öffice to travel to Shanghai immediately to talk to Mr. Johnston,

Ir, Lau replied that he would inform Mr. Cradock after he had consulted the relevant departments. Ir. Cradock stressed the urgency of the matter, and said that Ir. Jöhnston's family would naturally be very concerned, as we were ourselves. Could Mr. Lau give any idea when we could expect a reply? Lr. Lan replied that a reply could be given only after enquiries had been made,

Kr. Cradock said that he would like reply very soon, within a few days at the latest.

4. Mr. Cradock said that he would like to use this opportunity to raise another question concerning other British subjects în Shanghai. Bix British subjects had applied to the appropriate authorities in Shanghai during the last four months for exit visas to leave China; the dates which they gave for their departure were all well · overdue and none of the visas had yet been granted. Apart from Ir. and Irs. Johnston, to whom Mr. Cradock had already referred, the other orses were:-

Kr. and Mrs. Crozier and daughter of the

Hong Kong & Shanghai Bank who had applied on 23 April to leave on

31 May.

Mr. and Mrs. Self of the Hong Kong and

Shanghai Bank who had applied on 24 April to leave on 6 lay.

Nr. Cradock said that before he had heard of Mr. Johnston's arrest he had in any case been intending to ask for an inter- view with Consular Department this week to explain about Kr. Johnston's 11l health and to ask the Department to use its good

Tices to arrange for his and his wife's exit visas to be issued urgently on medical grounds. Ir. Cradock said he also had to inform Consular Department that Mr. and Era. Crozier's 21 year old daughter was suffering from recurrent chest troubles and that Mrs. Self had also been suffering some 111 health, There were therefore strong medical' reasons for all these people being allowed to return to Britain iänediately and he hoped that all other visas would be issued without further delay. Mr. Cradock pointed out that there was no restriction whatever on the departure from Britain of any Chinese bank officials in London and that

../ENG

NOTHING

BE WRITTEN

IN THIS

MARGIN.

Minutes.

Z !

NOTHING

WRITTEN

IN THIS MARGIN.

KNG was seriously concerned that British bank officials in China and their families were prevented from leaving in this way. In an interview on this question on 24 January Xr. Kau of Consular Department had said that if restrictions on Chinese bank officials in London were removed, the Chinese would "certainly make recíprocal geatures",

Lau undertook to transmit the request for granting exit visas to British subjects in Shanghai to the appropriate authorities.

5. Kr. Cradock said that he mould like to take this opportunity also of raising once again the question of exit visas for members of the staff of the Office of the British Chargèd'Affaires, He said that Ir. Yuan of Consular Department had informed a member of his staff on 27 July that the Department was now prepared to issue all the exit visas which were out- standing to members of the British Office and their families. Despite this state- sent there were still nine such people whose applications for exit visas had still not been granted,

A11

these people had asked to leave China more than two months ago but were still being prevented from doing so. He hoped that all these visas would be granted without further delay.

6. Ir. Lau replied that he was not responsible for this question and would transmit the request to Mr. Yuan of Consular Department.

7. Mr. Cradock then handed over alist of British citizens currently detained in China, Kr. Leu read the list and pointed out that Grey (whose nase appeared on the list) was a question for News Department. Finally. Er. Cradock reminded Mr. Lau that EMG took a very serious view of the arrest of Mr. Johnston, and would like a reply within a few days at the latest.

Mr. Hunter

Fr. Cradock

(0.0.H. Walden) 28 August. 1968.

Copies: Far Eastern Department.

Political Adviser's Office, Hong Kong

CYPHER/CAT A

ROUTINE FOREIGN OFFICE

PAM NUMBER 835

CONFIDENTIAL

170

FTO PEK

AR160GEPTEMBER 1968 (F)

17 SEPTEMB

さ

CONFIDENTIAL.

ADDRESSED TO PEKING TELEGRAM NUMBER 835 OF 16 SEPTEMBER 1968 REPEATED FOR INFORMATION TO MING KONG, HC SINGAPORE.

MY TELEGRAM NUMBER 897

CHARTERED BANK.

102

THE CHARTERED BANK INFORMED US TODAY THAT THE BANK OF CHINA IN SINGAPORE HAD PRESENTED A CHEQUE FOR SINGAPORE DOLLARS 2 HILLION. AS THEIR ACCOUNT STANDS AT ONLY DOLLARS 700,000 THE CHEQUE IS BEING RETURNED AND THE SINGAPORE LEGAL AUTHORITIES INFORMED. THE CHARTERED BANK TRIED TO PERSUADE THE BANK OF CHINA NOT TO PRESENT THE CHEQUE POINTING OUT THAT THEY HAD BEEN ACTING IN PEURSUANCE OF A COURT ORDER IN PAYING THE DOLLARS 7 MILLION INTO THE SHERIFF'S OFFICE, THE BANK OF CHINA REPLIED THAT THEY WERE ACTING ON INSTRUCTIONS FROM PEKING AND THAT IF THE CHEQUE WERE RETURNED THE CHARTERED BANK MUST ACCEPT ALL THE SERIOUS CONSEQUEN- CES''.

2. THE CHARTERED BANK THINK THAT THIS MOVE MAY CREATE SERIOUS PROBLEMS IN BANKING CIRCLES IN SINGAPORE AND WILL CERTAINLY BRING THE BANK OF CHINA INTO COLLISION WITH THE SINGAPORE GOVERNMENT. THEY ARE ALSO NOW MORE INCLINED TO LINK THE AFFAIR WITH THE ARREST OF JOHNSTON IN SHANGHAI.

SOSPA

DEPARTMENTAL DISTRIBUTION

P.O. F.E.D.

CONSULAR DEPT.

E.R.D.

S.E.A.D.

NEWS DEPT.

0.0.

H.K.D.

CONFIDENTIAL

Registry No.

DEPARTMENT

Fehlu

SECURITY CLASSIFICATION PRIORITY MARKINGS

Top-Segret

Confidential

Restricted

Wesselfied

RED Immediate Ecosity Routine

(Date)

Despai

-11

* Date and time (G.M.T.) telegram shoyli

reach addressee(s)

4000

Off

Confidentient

€130

16452

NOTHING TO BE WRITTEN IN THIS MARGIN

69/681

PRIVACY MARKING

In Confidence

En Clair. Code- Cypher

Draft Telegrape to:- Petzig

No.

835 (Date) 16/9

And to:--

Repeat yo Hong Kong

BHC Singapore

Saving to:-

Distribution:-

Derric

F.o.

F.E.D.

Security classification"

[Secu

[ Privacy marking

-if any

[Codeword-if any]

]

PEKING

835

Addressed to

telegram No.

And to

repeated for information to

Saving to......

(date)

16 Sept

SANTANANAR

HONG KONG, HC SINGAPORE

My telegram No. 807- Chartered Bank.

The Chartered Bank informed us today that the

Bank of China in Singapore had presented a cheque

for Singapore $2 million.

As their account stands

at only $700,000 the cheque is being returned and the

legnt

Singapore/authorities informed. The Chartered Bank

tried to persuade the Bank of China not to present

the cheque pointing out that they had been acting in

pursuance of a Court Order in paying over the

mki

#7 million the Sheriff's office.

The Bank of

China replied that they were acting on instructions

from Peking and that if the cheque were returned the

Chartered Bank must accept all the "serious

Copies to: Com what consequences".

ERO

SEAD

2. The Chartered Bank think that this move may

News.

co.

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create serious problems in banking circles in Singapore and will certainly bring the Bank of China

into collision with the Singapore Government.

They]

/also

now more mchuid

To has the also considered that the possibility that thie

affair-being connected with the arrest of

Johnston in Shanghai. is now stronger,

032717 E.M.&5.LM. 1640 3/67.

影

1619

NOTHING TO BE WRITTEN IN THIS MARGIN

DiD

129

261019

RECEIVED IN ARCHIVES No. 3:

128

17 SEP 1968

13 September, 1968

Rs14

Thank you for your letter of 26 August about your cousin Mrs. Margaret Self in Shanghai.

Both the Forsim Office and our kission in Peking are very well aware of the difficulties your cousin and her husband (whom I know well) have been encountering in their ettempts to leave China. KČ JE TO Rjoruached the Chinese on TEAZRIEZTO LLC ocelɛion.. bout this problem, the intest being when the Parliamentary unier secretary state ummoned the Ohinese Chargé d'affaires in London to a meeting on 6 September. By colleagues sim 1 lave considered "biš possible pressure can be brought to wear upon the Chincue in an attempt to help your cousin and other british subjects some of whom have been detained for questioning or arrested by the Chinese gutnorities. se are however, wood with a situsties in shion any attempt at retaliation on our part would almost certainly make the position of the pritish subjects in China worse rather than bett.r. We our tɔt hose to win any contest in pleasantness

with the Colmuze.

the INET

128 i. alose tough with the dig rong and shangnai ning Corporation and co-ordinate car representations with I spoke to tlm -oting kanıger on my way through nang 3d you ...y imus, they tre lao in touch with the Chinese là con s

I kausisted that a pie cave recently been some Javeloguents and we rone that there will be some good news before vary lang,

.1.

I can sasure you that your cousin's case is constantly in our minds at me & all continue to do rll in our power to obtain exit visas for lifa ani nic wife. I believe that our seat hope of suscesa is tɔ vork for a graduel portalisation in our relations with China.

Era, "tells look, Ciprým "awr,

at. Joga elñ,

Cardişənə lire.

(D. C. Forson)

一

WEL SINI

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No.

FECS 2X

SECURITY CLASSIFICATION

Top Secret

Secret

Confidential

Restricted. Unclassified.

PRIVACY MARKING

DRAFT Letter

Type 1 +

To:-

Mrs. Stella Hook, Cipryn Fawr, St. Dogmaels,

From

Sir Donald Hopson

Telephone No. & Ext.

Cardiganshire.

Department

In Ocalduros

شمت

Jon

बा

Thank you for your letter of 26 August

about your cousin Kro. Margaret Self in

Shanghai.

Both the Foreign Office and our Kission

are very well

way

in Peking then ware of the difficulties

(whom I te now well!)

your cousin and her husband/Fave been encounter-

ing in their atte pts to leave China. We have

approached the Chinese on numerous occasions about this roli, the latest fa; when the

Parliamentary Under Secretary of State summoned

the Chinese Gargè d'Affaires in London to a meeting on September. I and M. " colleague"

amig

have considered what possible precaure can be

brought to bear upon the Chinese in an attempt

to help your cousin and other British subjects

DOME

Whom in an even worse position who have been de-

tained for questioning or arrested by the

Chinese authorities. We are however faced with

Lon our pock a situation in which any attempt retaliation

_hy the Britiek/would almost certainly make the

position of the British subjects in China worse

rather than better. We cannot hope to win any

contest in unpleasantness with the Chineve. A

can tell you in confidence that the question of

publicity over the plight of British and other

foreign nationals who are being held by the

Chinese has been and is being actively con-

sidered, but we are greatly concerned lest

A+

120 effect.

DANKIMUS to make

Sundane to the thinese beta in šelin-

Betonunà I can assure you that your cousin's

conftantly in ont munk and He

cas- is the shall continue to

do all in our power to

hum and his wife.

Mux concil

exit visas for

jen imuraydsons of the conci

for British subjects in Ohine generally. /I

Latifi believe that our best hope of sugéess is

to work for a gradual normalisation in our

We are in

flose touch with the Honry Kray and

Bawang

Corpriatim and

Coradunate oné

абите

political relations with Chinapphic has for a representations

long time been the main objective for our

Government's policy.

$ mustead

your of I did not hav

that

cannot

speedy

necen arly Seput

This is what you are dring,

but I can't teɣund ett is

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Jesuits an

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of me espurred.

undustans mat mere

have recently bem some

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hope that

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On my way

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NOTHING TO BE WRITTEN IN THIS MARGIN

See Full 4283

Рад

Pad from

Cippyn fawr 2 A. Dogmael.

RECEIVED IN MCHIVES No.31 Cardigan.

Sr. D. Hops. 17 SEP 1968 26th August 68.

Dear Sir Donald,

るこ

My cousin, Mhe. Mangared

self, is in Shanghai with her

میان

husband Daet self who is in the employ gretting Kony- Shanghai Banking Corporation. Duck Self should have left Chine

on retirement in June 1966 but it

Seem that the Chinese will not

grant him an exit with-

exit with Mayard

could have left

I think last year-

but did it we her exil via ef

She was to wonied about her husband,

herke

He was use of de

well of the time,

she suffered almost continuously from severe colitis and was rapidly losing weight.

There seems to be no sig of

an evil purmil being fronted

рев

and

the family is beginning to wonde

है

we shall ever

see them again.

Can anything be donenfr

Mayard's

Chichester, Susser

them ? liony

dream

's mother is

The would have written to you herself, but her writing really is quite impossible the often canned read it herself.

The is now about so

лему

years old

unxions about 'lagant.

منس

com

Is there anything

dall anyone

a to persuade the Chinese

to feel there

two people come home?

●May! take this opportunity of thanking you very much for what you did fo om country. I would

like to congratulate from

Jell

you

how happy lamp

you and your family that you have been loved to come home.

with all good wither.

This suically,

Stellattok

(STELLA HOOK, MN)

EN CLAIR

IMMEDIATE PEKING TO FOREIGN OFFICE

127

IMMEDIATE PEKING TELEGRAM NO. 515 TO HONG KONG 14 September 1968

UNCLASSIFIED

Addressed to Hong Kong telegram No. 515 of 14 September

Repeated for information to:

Foreign Office

My telegram No. 839 to F.0.

Mr. and Mrs. Self have received their exit visas and are leaving Shanghai today for Hong Kong. They are due to reach Lo Wu on 15

September. Grateful if you would arrange for their reception and report safe arrival.

Mr. Craddock

DEPARTMENTAL DISTRIBUTION

F.0.

F.E.D.

Consular Dept.

Defence Dept.

P.U.S.D.

I.P.D.

I.R.D.

NEWS DEPT.

C.0.

H.K.D.

Defence Dept.

News Dept. DIS M.O.D.

77777

ADVANCE COPIES SENT

RECUVED IN ARCHIVES No. 31 16 SEP 1968

FesT4

CONFIDENTIAL

sher/Cat A

PRIORITY PEKING TO FOREIGN OFFICE

Tel No.845

POP CUPY

RECEIVED IN ARCHIVES No. 31

16 SEP 1968

13 September 1968

F25/4

CONFIDENTIAL

Addressed to Foreign Office telegram No.845 of 13 September, repeated for information to Hong Kong.

Johnson.

Cannings tells us that neither he nor Elizabeth Johnson have received any letters since Johnson's arrest from Johnson's family. It seems possible that the Chinese are removing such letters from their mail.

2. Cannings would very much like to have fairly regular news how Kr. & Mrs. Johnson's families are bearing up. I suggest the Chartered Bank might be asked to telegraph Cannings such news from time to time. (It appears their telegrams reach Cannings without difficulty) in particular he would like to know how Elizabeth Johnson's mother took the news.

Foreign Office pass Hong Kong.

Mr. Cradock

[Repeated as requested].

FILES:

F.E.D.

Consular Dept

News Dept

CONFIDENTIAL

Menage passed to Bank

she will

red cables.

NOTHING TO BE WRITTEN IN THIS MARGIN.

F25/4

OP COPY

MADO TELEGRAM

125

Precedence,

Registry No. FED

Top Steger.

Secri Combiental. Restricted

Open.

Draft.

Telegram to:-

EMERGENCY

IMMEDIATE }•

PAJORITY ROUTINE

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DEFÉRALD

priority

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* Date and time (G.M.T.) telegram should

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(Date)

14 SEP 1949

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13/9

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in Paling

Repeat to :-

En Clair Gorty Cypher

Your likeram

No: 1106.

with

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A.A E.WILTO. Gr.668

NOTHING TO BE WRITTEN IN THIS MARGIN.

12582

1348

Registry

No. FEI

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EMERGENCY

IMMEDIATE

* Date and time (G.M.T.) telegram shanks

reach addressee(s).

(Date)

+4 SEP***

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No.

1550

telegram No..........

(Date)

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pakkuda KAJOLASTEAEDIADATOTE---------------

CHH

Repeat to :---

En Clair. Gently Gody Cypher

Distribution :

Files

FED.

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Copies to :-

repeated for information to

مجید

Your litypan No: 1106.

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Mr. Deney.

Mr. Kupray.

CONFIDA AVAŘECHIVED IN

ARÜGIVES, 40, 31!

16 SEP 1968

F25/4

12t

Fund

Detention of Mr. Johnston

in Shanghai

Mr. Taggart of the Chartered Bank telephoned this morning to ask what was the next stage in our attempts to secure Mr. Johnaton's release.

2. I told him that Peking would keep up their pressure for details of any charges against Mr. Johnston and for consular access to him but

that this end we would need to give the Chinese Chargé d'Affaires a reasonable time to give a reply to Mr. Foley's representations of 6 September. said, however, that if no reply is forthcoming, we should certainly consider summoning the Chargé again but not before a fortnight or so had elapsed from the previous meeting.

Atherland.

4.J. Sharland.

11 September, 1968.

Any 13 Sufi.

Sefe

Bust. I week

Noteet ja

This has entregouth seen one;

du;

Ind

bur I don't know if this

Charliner Bank have bem Trio

in Dhant and

CONFIDE TIAL

J3.28/10

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draft lette to

C.B sut, up

301

Cypher/Cat A

CONFIDENTIAL

123

Cute Copy faction

RECEIVED re ARCHIVES No.31 1,3 SEP 1968

Fes 14

PRIORITY HONG KONG TO COMMONWEALTH OFFICE

Hong Kong telegram No. 367 to Peking 11 September, 1968

CONFIDENTIAL

Addressed to Peking telegram No. 367 of 11 September Repeated for information to: PA Singapore and Commonwealth Office

(120

Your telegram No. 839: Hong Kong Bank.

The bank here say the penalties are trivial.

They

are trying to settle them today in order to get self and Crozier out.

Foreign office please pass Priority Peking.

Sir D. Trench

[Repeated as requested]

DEPARTMENTAL DISTRIBUTION

C.O.

H.K.D.

Defence Dept

News Dept

F.O.

F.E.D.

Consular Dept

Defence Dept

P.U.S.D.

I.P.D.

I.R.D.

News Dept

bbbbb

CONFIDENTIAL

WONF0023/11

OTWON 007/11

EN CLAIR

ROUTINE OTTAWA

TELNO. 1106

कि

Peply Set

бев

J IN

13 SEP 1968

F244

-RR- CO

TO COMMONWEALTH OFFICE

11 SEPTEMBER 1968

122

UNCLASSIFIED.

GRATEFUL FOR ANY INFORMATION WHICH CAN BE PASSED ON TO

RELATIVES HERE ABOUT WELFARE OF WIFE OF JOHNSTON THE CHARTERED

BANK MAN IN SHANGHAI

✔ ROGERS

GPS 30A

DESP. 11153OZ V.E.E.

16322

Fuiters

Comander Dared

FED. Act cutie w

cwr

Росла

عليك ،

BAGA

-Tort Ry

•

Fe5/4.

POREIGN OFFICE, 5.W.1.

6 September, 1968

(1124

Then we spoke on the telephone this morning I passed you the gist of the information we received about

Wre. Johnston from Peking. The text of the telegram is as follows:

"Krs. Johnston has asked us whether we can tell her who broke the news to his (her husband's) mother and how she reacted to this, Mrs. Johnston is apparently standing up well to the strain of a very difficult situation but it would be helpful to her if you could enable us to answer this question.

2. Mrs. Johnston is now applying separately for her exiù visa. We have sent a Note to Consular Department supporting this application."

I should be most grateful if you would let me know as soon as you have sade enquiries about Mrs. Johnston, Senior, and also if you could confirm that you have informed Ers. Johaston, Junior's mother of her son-in- law's detention.

P. Taggart, Saq.,

The Chartered Bank,

38 Bishopsgate,

London, I.C.2.

(E.J. Sharland)

Cypher/Cat A

CONFIDENTIAL

IMMEDIATE PEKING TO POREIGN OFFICE

Telno 839

10 September, 1968

RECEIVED IN

ARCHIVES No. 31

10 SEP 1968

Ferla

CONFIDENTIAL

Addressed to Foreign office telegram No.839 of 10 September, Repeated for information to Hong Kong, POLAD Singapore.

Self (Manager Hong Kong and Shanghai Bank) has told us that he was summoned on 9 September to Shanghai Poreign Affairs Department to learn the result of the Chinese investigation into "irregularities" with which they had charged Bank in May 1967. He said that Chinese "exacted certain penalties" from Bank, He gave no details on telephone but said he had passed details to his Head Office in Hong Kong and appeared to expect that they would be met without difficulty. The Chinese also told him that he and his wife must leave China within two weeks, The Selfs have therefore re-applied for exit visas and hope to leave Shanghai for Hong Kong on 13 or 14 September.

2. Self thought Lachlan might now be allowed to take over formally as Manager,

Grateful if Hong Kong could discover something more of "penalties" the Chinese are exacting.

be prepared to meet them.

I hope Bank will

This seems a very encouraging development both for

its release of selfs and regularisation of Bank's position. Croziers' ohances of getting exit viaas should have been improved although they may still be bound up with political situation.

safe across border.

5. I recommend there should be no publicity until Self 18

Thereafter it may be difficult to avoid it. I would in any case see advantage in Self using opportunity to draw attention to situation of Croziers and possibly of Johnstons also, though this will have to be done with care and to avoid appearances of commenting on Chinese internal

situation.

Foreign Office please pass Hong Kong and POLAD Singapore. Nr. Cradock,

[Repeated as requested]

ADVANCE COPIES SENT

DEPARTMENTAL DISTRIBUTION

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DIS MOD

88888

CONFIDENTIAL

Aer

CYPHER/CAT A

ROUTINE FOREIGN OFFICE

TELEGRAM NUMBER 831

CONFIDENTIAL

119

TO PEKING

13 SEPTEMBER 1968.

D IN

DIN

FERNES NO. 31

12 SEP 1968

CONFIDENTIAL

F25/4.

ADDRESSED TO PEKING TELEGRAM 30, 831 OF 10 SEPTEMBER REPEATED FOR INFORMATION TO HONG KONG AND RHC SINGAPORE.

MY TELNO. 825: JOHNSTON.

AT A RECEPTION LAST NIGHT AT WHICH THE BANK OF CHINA REPRESENT- ATIVES HAD SHOWN THE INITIAL CORDIALITY, THE CHIEF GENERAL MANAGER OF THE CHARTERED BANK EXPRESSED TO THEM HIS CONCERN ABOUT THE CASE OF JOHNSTON, THE BANK OF CHINA REPRESENTATIVES, WHO WERE VERY FRIENDLY, REPLIED THAT QUOTE IN THEIR OPINION, IT HAD NOTHING TO WITH THE CHARTERED BANK UNQUOTE. THEY THOUGHT THAT IT WOULD BE SORTED OUT IN DUE COURSE.

SINCE THE BANK OF GIINA HERE, ARE WELL AWARE OF THE SINGAPORE AFFAIR (MY TEL NO. 807 OF 29 AUGUST), THE CHARTERED BANK ARE INCLINED TO CONCLUDE THAT THE ARREST OF JOHNSON IS NOT REPEAT NOT LINKED WITH THEIR TROUBLES IN SINGAPORE.

102

SO SFA/CROSEC

FILES F.O. F.E.D.

CONSULAR DEPT.

NEWS DEPT.

CONFIDENTIAL

1150

9031

1011408

NOTHING TO BE WRITTEN IN THIS MARGIN.

Registry No. FE

Top Secret

Secret.

Confidential.

isted.

Draft.

No...

Fester

Telegrand to:-

Petang

(Date).

And to:-

Repeat to

Mary thang

H.C.

En Claff.

Code Cypher

10/9.

Distribution :-

Filmo

F.E.D. Con sculent Neuro

Copies to:-

EMERGENCY IMMEDIATE PHORITY

ROUTINE

without

DEFERRED

• Date and time (G.M.T.) telegramski reach addressee(s)......

(Date).

}

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1019 21903

priority

[Security classification] CONFIDENTIAL.

-if any

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Addressed to

telegram No.

PEKING

100 PILIILLJILIN ZI

83/

JALI

repeated for information to

SINGAPORE

My telmo, 825

(date)

10/8

HONG KONS

JOHNSTON

AHC

At a reception last night at which the Book of China representature had shown the initial cordiality, the Chief Somural Manager of the Chanteusel Barak expressed to them his concam abort the case of Johnston. The Bank of China reformentations,

who were very friendly, refiled that

in their opinion, it had nothing to do with the Chanted Banka." They thought that it would be sorted out in

dent

2./

Jace the Bank of China Live;

GMG

well aneme of the Singapore affair

(top tal No 807

729

August

). te

Chartered Bank are inclined to

conclude that the art of Jovem is not refect not linked with this troubles

in Sinsafane

thejo sh

NOTHING TO BE WRITTEN IN THIS MARGIN.

CYPHER/CAT A

RIORITY FOREIGN

OFFICE

TELEGRAM NUMBER: 830.

CONFIDENTIAL

TO: PEKING

FL'

(TH8)

ARCHIVES No. 31

11 SEP 1968

Fe74.

10 SEPTEMBER, 1968. (FED)

CONFIDENTIAL.

ADDRESSED TO PEKING TELEGRAM NUMBER 830 OF 10 SEPTEMBER REPEATED FOR INFORMATION TO HONG KONG AND POLAD SINGAPORE. BRITISH COMMUNITY IN SHANGHAI,

THE HONG KONG AND SHANGHAI BANKING CORPORATION HAS JUST BEEN INFORMED BY THEIR REPRESENTATIVES IN HONG KONG THAT A MESSAGE HAS BEEN RECEIVED FROM SELF TO THE EFFECT THAT HE HAS BEEN ORDERED BY THE CHINESE AUTHORITIES TO LEAVE CHINA WITHIN FOURTEEN DAYS.

2. IN VIEW OF THEIR NEGOTIATIONS ABOUT THE CLOSURE OF THEIR SHANGHAI BRANCH, THE HONG KONG BANK ARE NOT REPEAT NOT GIVING THIS ANY PUBLICITY FOR THE TIMEBEING.

SOSFA.

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ва

45031

1145

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Fe574

Registry No. FED

Pug Secret.

Sertet.

Confidential.

Resisted.

EMERGENCY

TMKLEDIATE

PRIORITY ROUTINE

priority

Without

DEFERRED

* Date and time (G.M.T.) telegram/should

reach addressee(s).

(Date)

Despatched...

1014

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To Sept.

(date)

ALIFI‒‒‒

repeated for information to HONG KONG

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NOTHING TO BE WRITTEN IN THIS MARGIN.

CYPHER/CAT A

CONFIDENTIAL

FLASH COMMONWEALTH OFFICE

TO KARACHI

TELNO 7

6 SEPTEMBER 1 9 6 8

(F)

COF

RECEIVED IN

¡ARCH

> No.3!

- 9 SEP 1968

Fen14 574

CONFIDENTIAL

ADDRESSED TO KARACHI TELHO 407 OF 6 SEPTEMBER AND TO DACCA. FOREIGN OFFICE WILL PUT OUT A STATEMENT AT 12.30 HOURS G.M.T. ABOUT THE DETENTION IN SHANGHAI OF MANAGER OF CHARTERED BANK, M3. D.C. JOHNSTON FOLLOWING CALL OF CHINESE CHARGE-D' AFFAIRES ON PARLIAMENTARY UNDER -SECRETARY, CHINESE REACTION MIGHT AFFECT PLANS OF GROUP FROM 1.C.I. AND SIMON CARVES WHO ARE ON THE WAY TO CHIHA BY PIA FLIGHT P.K.718 ARRIVING KARACHI 7 SEPT.

AT 0237 AND DACCA AT 0732.

>E MAY WISH YOU TO PASS MESSAGE TO THEM AT KARACHI OR DACCA.

CROSEC

FILES

F.0.

F.E.D

0.0.

C.O.

S.A.D.

CONFIDENTIAL

TELEGRAM SECTION

Room 124 K.C.S

F25/4.

Communications Department

FED

YTC/1

Copy/ies of the following telegram has/have been sent

407 Karachi

6/9

TO:

B/Trade (CRED

DR. I. Russell

(Signed).. (Department). (Date)....

Action taken in Communications Department :

(Initials) . . .

صبح

(Date)............

6/9/68

AFTER ACTION THIS FORM SHOULD BE SENT TO

THE APPROPRIATE ARCHIVES DIVISION FOR RETENTION

Registry No.

DEPARTMENT

Fenet FLASH

SECURITY CLASSIFICATION PRIORITY MARKINGS

* Date and time (G.M.T.) telegram should

reach agaferice(3)

(Date

Des tched

Confidential

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[ Sec

Security classification -if any

XXX

NOTHING TO BE WRITTEN IN THIS MARGIN.

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(Dale)

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16/9

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NOTHING TO BE WRITTEN IN THIS MARGIN

RECFIVED IN

RESTRICTED

116

Mush. Mr Mursan Frizer

ARCHM No.31

-9SEP 08 FESTA

Office of the British

Chargé d'Affaires

PEKING

j27 August, 1968

Ko. Dear John. ко

ED IN

.....

The

You will already have learned from our telegram number 778 of the arrest of David Johnston in Shanghai and by the time t'ia reaches you there will no doubt have been a lot more telegraphic correspondence on this subject. object of this letter is to fill in briefly the picture of the situation in Shanghai as we have learned it from telephone calls to Canninge, with whom we are in touch at least once a day.

He and Mrs. Johnston have not left the house since Johnston's arrest (except for his own visits to the office and to the Chinese authorities). They do not intend to do so until they have received an assurance from the Public Security Bureau that by moving freely about Shanghai, they will not be Baking things in any way more difficult for Johnston, themselves or other members of the British community; they hope to receive such an assurance this afternoon. Mrs. Johnston appears to be standing up to the shock quite well and Cannings said yesterday that she was "eating again". Other members of the British community appear to be visiting them but we have naturally not been able to discover over the telephone what their reactions are. I am sure they must all be in a state of near desperation,

Cannings remarked to me yesterday that they were having trouble with small boys coming through the fence into the garden. I asked if this was a new development and he said no, but that it had not happened for some tine; he had reported the matter to the Chinese authorities since "among other things he thought that the boys might get into trouble by climbing in". I did not like to press his two closely about the reasons for this development, which must be of considerable annoyance in present circumstances. Perhaps they saw the police car come in the night and are curious to know what is going on.

I enclose a copy of the medical certificate which Johnston received from Shanghai Hospital on 16 August, together with a (Shanghai) translation. Johnston handed the original of this certificate to the authorities in Shanghai to support his visa application and Percy Cradock gave a copy to Consular Department last night (our telègram 781).

I am copying this letter with enclosure to Robin McLaren in Hong Kong who may like to keep Graham of the Chartered Bank informed.

Yours w

eve

ре

Phistan

(A.J. Hunter r)

E.J. Sharland, Esq.,

Far Eastern Department.

RESTRICTED

SNAC:

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50-169582

2. 47/25 4 4 1 1

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Bladder stone, or possible kidney stone. From urga culture OOLITITRI is found, but

no symptoms locally or throughout the whole

body.

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Periodie exanizm ti on

for this disease,

required; operation when necessary.

Mr. Her

Mr. Foly 1

Lei

CONFIDENTIAL

RECEIVED IN

- 9 SEP 1968

F25/4

Eints

多

CALL OF THE CHINESE CHARGÉ D'AFFAIRES AD INTERIX

ON MR. FOLEY: FRIDAY, 6 SEPTEMBER, AT 11.00 A.M.

Mr. Foley has agreed to see Mr. Shen Ping at 11.00 a.m.

to-day to raise the case of Mr. Johnston of the Chartered Bank who was arrested in Shanghai on 25 August.

FLAG ACT(S) 2.

I attach speaking notes.

3. The background to Kr. Johnston's case is given in my FLAZ B submission of 5 September (attached).

Background on the

British community in Shanghai is to be found in the notes

with the press statement attached to that submission. FLAG C (115)4.

B4.

I attach, in addition, brief background notes on the

other British subjects at present detained or believed to

be detained in China.

виши Гранд

(James Murray)

6 September, 1968.

CONFIDENTIAL

(115

CONFIDENTIAL

INESE CHARGE D'AFFAIRES

Speaking Notes

Mr. D. C. Johnston, the former Manager of the Chartered

Bank branch in Shanghai, who had recently handed over to his

successor, was arrested by the Chinese authorities on 25 August.

I understand that at the time of his arrest Mr. Johnston was

accused of spying.

2. We know of no justification whatsover for an accusation

of espionage against Mr. Johnston.

3. I am very dissatisfied that, despite repeated requests

by the British Chargé d'Affaires in Peking, your Government ·

has failed to give details of any charges, there may be against

Mr. Johnston and that they have refused to allow a member of

the staff of the Office of the British Chargé d'Affaires in

Peking to visit Shanghai in order to see Mr. Johnston. I

should be grateful if you could provide any information about

the case.

If Hr. Shen Ping pleads ignorance of the case I should

be grateful if you would seek the necessary information from

your Government and inform me of the details of any charges

there may be against Kr. Johnston und of the reason why your

Government has not granted consular access to him.

As you

know, it is our objective to maintain correct relations with

your country. If this is to be done, it is essential that in

accordance with long-accepted international practice, consuler

should be granted to detained Bilish Natinal

and

formalin gesun

abond Layes laid paint them.

CONFIDENTIAL

200088

CONFIDENTIAL

- 2

access should be granted to detained British nationals and

information given about charges laid against them.

5. I am also concerned about the position of other British

subjects in Shanghai. Two employees of the Hong Kong and Shanghai Banking Corporation, Mr. Self and Mr. Crozier, working

in Shanghai, and their families, have for a long time (Mr. Self

for over a year), been seeking to leave China to take up

positions elsewhere. Your Government has however failed to

grant the necessary exit permits. I am particularly worried

since I am told that Mrs. Self is not in good health and that

Mr. Crozier's daughter has suffered recurrent and serious

attacks of bronchitis. Mr. Self's replacement has been in

Shanghai for a very considerable time so there can be no

justification for the continuing detention of these two families.

6. I am also seriously dissatisfied that you have failed to

supply the information sought by my predecessor, Mr. Rodgers,

on 5 April and 24 Kay about other British subjects detained in

China. These are as you know:

Mr. Anthony Grey, the Reuters correspondent in Peking,

Mr. Norman Barrymaine, who was detained from a foreign vessel

in Shanghai,

Mr. P. D. Crouch, the Second Officer of the "Demodocus",

Kr. Eric Gordon and his family,

Kre. Israel Epstein,

Mr. Michael Shapiro

and

Mr. David Crook and his family.

Since my predecessor last saw you the British Chargé d'Affaires

CONFIDENTIAL

/ in Peking

CONFIDENTIAL

- 3-

in Peking has also sought information about three further

British subjects detained or believed to have been detained

in China: two ships' officers,

Captain P. M. Will, of the "Kota Daya"

Fr. Saunders, of the "Rushpool"; and

and

Mrs. Gladys Yang, who we have heard has been detained

in Peking.

Apart from one visit to Mr. Grey, consular access has been

allowed in none of these cases, nor in that of Mr. George Watt

who was sentenced to three years' imprisonment in Lanchow

last Karch. I am therefore obliged to ask you yet again to

transmit to your Government a request to supply details of the

charges, if any, against these British subjecte and in

accordance with international practice to allow consular access

to them.

7. As regards the British Mission in Peking, I have noted

with satisfaction that a number of exit visas have been granted

to members of the Mission staff in particular to Sir Donald

Hopson. There remain however the cases of Mr. Appleyard and

Mr. Hunter, two members of the diplomatic staff of the British

Mission and their families for whom the applications for exit

visas have been outstanding for a considerable time. Chinese

practice in delaying visas is in striking contrast to that of

my own Government which imposes no restrictions on the

movements in and out of the country of the staff of your own

/ Mission.

CONFIDENTIAL

- 4

Mission.

I must therefore press once again for the speedy

issue of exit visas for these two officers and their

families.

Far Eastern Department,

6 September, 1968.

CONFIDENTIAL

BACKGROUND NOTE

British Subjects known or believed

to be detained in China

1. Kr. Anthony Grey, Reuters correspondent in Peking was placed

under house arrest on 21 July 1967 in retaliation for the arrest

and conviction of Haueh P'ing a correspondent of the New China News

Agency in Hong Kong on charges arising out of his activities during

"confrontation".

After repeated representations Sir Donald Hopson

and a member of his staff were allowed to visit Mr. Grey for about

twenty minutes on 23 April last in return for a special visit by

N.C.N.A. personnel to their former employees and other "patriotic

journalists" imprisoned in Hong Kong. No other visits have been

allowed. He is permitted to write to his family and fiancée. and to

receive letters from them. No charge of any sort has ever been

laid against Kr. Grey.

2. Mr. George att - was detained and placed under house arrest

in his hotel in Lunchow on 26 September, 1967. He was sentenced to

three years' imprisonment for alleged spying by a Lanchow court on

15 March this year. We believe that Mr. att may have been

indiscreet and have taken photographs in unauthorised places. Shortly

before his detention his wife was allowed to leave China; but she

was thoroughly searched at Shanghai before her departure when the

Chinese took from her photographs and letters from other engineers

in Lanchow to their families.

Mr. att's having been a spy.

There is, however, no question of

Since Mr. Watt's arrest a Chinese

court in Peking has annulled Vickers-Zimmer's contract with the

CONFIDENTIAL

/Technical

CONFIDENTIAL

Technical Import Corporation and has fined the firm £650,000.

In July Mr. Watt was allowed to write to his wife and the Chinese

authorities have undertaken to allow him to receive mail from

his family and one food parcel per month through the Red Cross.

Mr. att has beer. told that he may write one letter each month

to his wife. The arrangements for this correspondence are in

hand but we have not yet had confirmation that they are working.

3. Kr. Norman Barrymaine, a freelance journalist, was detained

at Shanghai on 23 February this year, while a passenger aboard a

Polish vessel. He was probably seeking copy and possibly photo-

graphs for articles about conditions in China.

4. Hr. P. D. Crouch, the Second Officer of the "Demodocus", was

detained at Shanghai on 3 April this year when the ship sailed

without him. The Third Officer, who was detained at the same time,

has since been deported to Hong Kong. Both officers were accused

of espionage activities, and the Third Officer may have taken notes

of the numbers of Chinese naval vessels in Shanghai.

Captain P. K. Will, was detained at Tang-ku, off Tien-tsin on

or about 3 July, 1968. He has been accused (probably justly) of

infringement of harbour regulations.

Kr. J. F. Saunders, was detained at Shanghai on or about

15 August, 1968. He was the Third Mate of the "Rushpool", a

U.K.-registered vessel on charter to the Chinese. We do not know

the charge if any against Mr. Saunders but understand that he had

taken a note of the numbers of four Chinese naval vessels.

7. Mr. Eric Gordon and Family. On 3 February Mr. Gordon's

brother reported to us that although the family had been due to

/leave

CONFIDENTIAL

-3

leave China in early November last year no news had been

received from them since the end of October.

Mr. Gordon was

employed by the Chinese government-controlled Foreign Languages

Press in Peking. We have been unable to confirm that he has

been detained but it is the only possible conclusion in view of the

family's long silence.

Reports reached the British Mission in Peking in March this

year that the following British subjects, all of whom were employed

by the Chinese authorities, had been detained towards the end of

1967.

Mrs. Epstein (née Elsie Fairfax Cholmondley)

Mr. Michael Shapiro

Mr. David Crook.

We have been unable to confirm the fact of their detention but

consider it extremely likely.

9. Krs. Gladys Yang. In mid-July this year our Mission in

Peking received unconfirmed reports that Mrs. Yang, who is British

by race and birth and married to a Chinese, had been detained about

a fortnight previously. She worked as a literary translator for

the Chinese. We have been unable to obtain confirmation of this

report.

Far Eastern Department

6 September, 1968.

CONFIDENTIAL

5/9

Sir D. Allen

Parliamentary Office

CONFIDENTIAL

MR. DAVID JOHNSTON

RECEIVED IN

ARCHIVES No 31 -3SEBU

E5/4.

Flag A

(103

Problem

Mr. David Johnston, the Manager of the Chartered Bank in

Shanghai, who had just handed over to his successor, was

arrested on a spying charge on 25 August (Peking telegram No. 778).

Despite repeated representations in Peking, the Chinese

authorities have given no information about the case and they

have refused permission for a member of the Mission to visit

Shanghai to see Mr. Johnston. (Peking telegram No. 810.)

We have to decide what further action should be taken, in

particular whether and in what form publicity should be given

to the case.

Recommendation

I recommend that:-

Kr. Foley summon the Chinese Chargé d'Affaires on

6 September to repeat our demand for information and for

access to Mr. Johnston. The call would be used as the

occasion to inform the press about the facts of the case.

If for any reason the Chinese Chargé d'Affaires is

unavailable, a statement should be released to the press on

6 September and the Chargé d'Affaires summoned next week.

I attach a draft press statement and notes for unattributable

background comment. The Board of Trade concur.

/Background and Argument

CONFIDENTIAL

- -

2 -

Flag

101

103

Background and Argument

3. Then Mr. Johnston was arrested, Mr. Cannings to whom he had

recently handed over the Bank's affairs, was present and heard

a warrant being read out in which it was alleged that

Mr. Johnston was guilty of "spying against the People's Republic

of China". When questioned about what the alleged acts of

espionage were, the Chinese replied "Why do you ask, you know

very well?". (Peking telegram No. 806). To our knowledge

there is no basis whatsoever for a charge of spying.

Mr. Johnston like other foreigners in Shanghai has acted with

great discretion. It seems likely, as the Chargé d'Affaires

in Peking has suggested, that the arrest is a result of the

"spy mania" which is prevalent in China, particularly Shanghai,

and that Mr. Johnston may in some way have been incriminated

by statements made under interrogation by a Belgian National,

Mr. van Roosbroeck, who was arrested a few weeks ago. The

Chartered Bank think the arrest might be connected with

difficulties which they have had with the Bank of China in

Singapore, details of which are contained in Foreign Office

telegram No. 807 to Peking. In my view this is unlikely to be

the main cause; but the Chinese might well use the arrest of

Mr. Johnston to try to put pressure on the Bank over the

Singapore affair,

4. In the case of other arrested British subjects, such as

Mr. Watt, of Vickers-Zimmer, we considered that publicity might

harm their chances of early release and we therefore discouraged

Experience over the past year would seem however to suggest

it.

that little

CONFIDENTIAL

-3-

Flag F

that little is to be gained by playing down affairs of this

kind. On the contrary, it seems possible that, in some cases

at least, the Chinese may be sensitive to accusations of

uncivilised behaviour. The Chargé d'Affaires in Peking has

recommended strongly that we make the facts of the case public.

(Peking telegram No. 786). He is supported by Sir Donald Hopson

to whom I have spoken. The Chartered Bank also accept the need

for publicity. The Board of Trade have acquiesced with some

reluctance. From the point of view of press and parliamentary

interest in this country it is clearly desirable that we should

not seem to be concealing the facts about a British subject in

difficulties in China, or about the conditions in which British

businessmen in China have to work. I therefore consider that

the press should be told about the case soon it is already

known to the foreign community in Shanghai and there is therefore

the possibility that it could become public at any time.

5. As regards the statement, I think it should be confined to

the bare facts as we know them, and contain no polemics. It

would probably be better to omit specific reference to charges

of espionage as this will merely give added currency to

unsubstantiated Chinese allegations. We could however say

unattributably that at the time of his arrest Hr. Johnston was

spoken of as "an enemy of the Chinese People's Republic". In

answer to questions, the Chartered Bank have agreed that they

too will make no reference to espionage. They will express

surprise at what has happened and add that their relations with

the Chinese have always been good, making no reference to

/ difficulties in

CONFIDENTIAL

Flag G

Flag H

difficulties in Singapore.

independently, they will

If the Singapore story should break

that they see no reason to connect

what happened in Singapore with the case of Mr. Johnston.

6. As to the way in which we inform the press, I think there

would be advantage in first summoning the Chinese Chargé

d'Affaires as we might well be asked why in the absence of

progress in Peking we had not broached the matter in London.

If however Kr. Shen Ping is for any reason unavailable, I

suggest that we should make the statement on Friday 6 September,

and then summon him next week. Apart from the possibility of

Mr. Johnston's arrest becoming known, the timing is also important

for another reason. The Chinese have invited representatives

of Simon Carves and I.C.I. to begin negotiations in Peking on

Tuesday 10 September with a view to completing the contract

for a plant being constructed by Simon Carves at Lanchow in

North-West China. In normal circumstances, we might well have

discouraged them from going but we, the Chargé d'Affaires in

Peking and the firms concerned consider that in the interests

of extricating other representatives of Simon Carves now in

China they should accept the invitation and try to finish their

business as quickly as possible. The Chargé d'Affaires was

consulted about the coincidence of a statement on Johnston and

the visit of Simon Carves and I.C.I. (F.0. telegram No. 811 to

Peking) and recommended (Peking tel No. 809) that the visit

should proceed but that the party should not leave until after

the statement on Mr. Johnston had been made. It would be

CONFIDENTIAL

/ possible

CONFIDENTIAL

- 5-

leave

possible for them to have on Monday 9 September or, if there

were a hold up, to tell the Chinese that their departure has

But they would like to go as soon as

had to be postponed.

possible.

7. When the arrest of Mr. Johnston becomes public, it will inevitably stimulate questions about other British subjects in China, particularly the British community in Shanghai. Following

the arrest of Mr. van Roosbroeck their morale suffered a serious

blow and it will have become still worse following Fr. Johnston's arrest. The Chargé d'Affaires has recommended that publicity

be given to the cases of all British subjects who have applied

for exit visas and have not yet been allowed to leave.

Details are contained in the notes for unattributable background,

and a reference might be made to them by Mr. Foley.

The Hong Kong and Shanghai Bank representatives are in a special category in that the Bank is negotiating with the Chinese in Hong Kong

to close the Shanghai branch or had it over to Chinese staff. In normal circumstances, they would have preferred no publicity about exit visas, but in view of Mr. Johnston's arrest they

accept that reference will have to be made to their representatives whose exit visas are being withheld.

No mention will, of course,

be made of their negotiations for closure.

James Umay.

Copy to: Dr. I. Russell, BOARD OF TRADE.

CONFIDENTIAL

(James Murray)

5 September, 1968.

I agree with this and support the chrommendations.

Denis Allen: Za

PRESS STATEMENT

For issue after call of Chinese Chargé d'Affaires

on Mr. Foley

ON THE RECORD

The Chinese Chargé d'Affaires a.i., Kr. Shen Ping, was

to-day summoned by the Parliamentary Under-Secretary of State.

Kr. Foley's purpose was to raise the case of Kr. D. C. Johnston,

of the Chartered Bank in Shanghai. The facts of the case

are these.

Kr. Johnston was arrested by the Chinese authorities in Shanghai on 25 August. Repeated representations have been

made by the British Chargé d'Affaires in Peking, but the

Chinese authorities have failed to provide any information about

the charges against Mr. Johnston and have refused the application

by a member of the Office of the British Chargé d'Affaires in

Peking to visit Shanghai to see Mr. Johnston. Kr. Foley

expressed strong dissatisfaction at the attitude of the Chinese

Government, and repeated the demands made in Peking that

information be provided about the case and Consular access to

Kr. Johnston permitted. Mr. Shen Ping undertook to report

the representations to his Government.7

UNATTRIBUTABLE COMENT

The Chinese authorities have given us no information about any charges against Mr. Johnston nor was the Chinese Chargé d'Affaires able to do so, but we understand that at the time

/ of his arrest

- 2 -

of his arrest he was described as "an enemy of the Chinese

People's Republic".

an accusation.

We know of no justification for such

We are in close touch with the Chartered Bank who, like

us, know of no action by Hr. Johnston which might have

justified his arrest.

This

Mr. Foley also referred to the cases

of other British subjects detained in China.

REPLIES TO POSSIBLE QUESTIONS

point conter be

necuell in The Tamile

Kind

statement.

The British community in Shanghai consists of some 30

people, about one third of whom are of dual British/Chinese

nationality. No consular visits by members of the British

Mission have been permitted by the Chinese authorities since

their closure of the British Office in Shanghai in May 1967.

Apart from Mr. Johnstone, whose replacement is already in

Shanghai, two other families, the Selfs and the Croziers, both

working in the Hong Kong and Shanghai Banking Corporation's

Shanghai Branch, have been due to leave China for a considerable

time. The Chinese have, however, declined to give the

necessary exit visas. Mrs. Self is in poor health, and the

Croziers' daughter has suffered attacks of bronchitis.

would not be advisable for her to remain in Shanghai for

another winter.

ADVICE TOBRITISH SUBJECTS

We are ensuring that anyone whom we know to be contemplating

a visit to China is fully aware of the situation there.

Circumstances of visits, however, vary and each case must be

treated on its merita.

/ BACKGROUND

-3-

BACKGROUND

British subjects known or believed to be in detention,

apart from Mr. Johnston

placed under house arrest, 21 July, 1967.

(a) Hr. A. Grey

(b)

Mr. George Watt

detained in Lanchow 26 September, 1967.

Sentenced to 3 years imprisonment for

alleged spying, 15 March, 1968.

(a) Mr. P. D. Crouch

(e) Capt. P. M. Will

(f) Mr. J. F. Saunders

detained at Shanghai, 23 February, 1968

detained at Shanghai, 3 April, 1968.

detained at Tangku on or about 3 June, 1968

←

detained at Shanghai on or about

15 August, 1968.

(Mr. Saunders was 3rd Mate of the "Rushpool", a U.K.

registered ship on charter to the Chinese.)

(g) Mr. Eric Gordon and family

no news of them since end

October, 1967.

(h) Mrs. Epstein (née Elsie Fairfax-Cholmondley) - reported

detained end 1967.

(1) Mr. Michael Shapiro

(j) Mr. David Crook

reported detained end 1967

(k) Mrs. Gladys Yang

In mid-July the British Mission in

Peking received unconfirmed reports that

Mrs. Yang, who is a British Citizen by

birth, married to a Chinese had been

detained about a fortnight previously.

Enquiries to the Chinese authorities have

elicited no reply.

(112290) DL 391999 1000w 269 10w.

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No.

SECURITY CLASSIFICATION

Top Secret. Secret.

Confidential,

Restricted.

Unclassified.

PRIVACY MARKING

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Registry No.

SECURITY CLASSIFICATION

Top Secret.

Secret

Confidential.

Restricted.

Unclassified.

PRIVACY MARKING

....

In Confidence

(11801) 34. 391999 1,30 - 2009

Beau Rivage

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NOTHING TO BE WRITTEN IN THIS MARGIN

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CYPHER/CAT A

IMMEDIATE FOREIGN OFFICE

EGRAM NUMBER 823

CONFITIAL

VED IN

ARCHIVES No. 31

TO PEKING

9 SEP 1968

Fes/4

6 SEPTEMBER 1968. (F)

109

CONFIDENTIAL

ADDRESSED TO PEKING TELEGRAM NUMBER 823 OF 6 SEPTEMBER

REPEATED FOR INFORMATION TO HONG KONG AND POLAD SINGAPORE. M.I.P.T. JOHNSTON,

WE DECIDED THAT IT WOULD BE BETTER IN COMMENTING ON THE CASE TO AVOID REFERENCE TO THE WARRANT AND THE ALLEGATIONS OF ESPIONAGE (YOUR TELEGRAM NO. 896).

2. UNATTRIBUTABLY THE SPOKESMAN SAID THAT WE UNDERSTOOD THAT AT THE TIME OF HIS ARREST JOHNSTON HAD BEEN DESCRIBED AS QUOTE AN ENEMY OF THE CHINESE PEOPLE'S REPUBLIC UNQUOTE: WE KNEW OF NO JUSTIFICATION FOR SUCH AN ACCUSATION. THE SPOKESMAN ADDED THAT WE WERE IN CLOSE TOUCH WITH THE CHARTERED BANK, WHO LIKE US, KNEW OF NO ACTION BY JOHNSTON WHICH MIGHT HAVE JUSTIFIED HIS ARREST.

3. THE SPOKESMAN ALSO GAVE BRIEF DETAILS OF THE CASES OF SAUNDERS AND MRS. GLADYS YANG. HE DID NOT REPEAT NOT MENTION THE MATTERS OF EXIT VISAS FOR THE SELFS AND THE CROZIERS.

SOSFA

DEPARTMENTAL DISTRIBUTION

F.O. F.E. D.

CONSULAR DEPT

E.R.D.

NEWS DEPT

I.R.D.

I.P.D.

RESEARCH DAPT

CONFI ATIAL

جرام

113

TELEGRAM SECTION Room 124 K.C.S

Communications Department

TO:

Festa

XTC/1

ไฟ

1.1113

FED

Copy/ies of the following telegram has/have been sent

823 To beling (44)

Dr. 1. Ruppell

B/Trade (Ches)

(Signed)..........

(Department).

(Date)..

Action taken in Communications Department :

(Initials).

......G...

(Date)...

Z./.....

AFTER ACTION THIS FORM SHOULD BE SENT TO

THE APPROPRIATE ARCHIVES DIVISION FOR RETENTION

NOTHING TO BE WRITTEN IN THIS MARGIN

11 12/65/

Registry No. FC74

DEPARTMENT

хх

* Date and time (G,M.T.) telegram should

reach addresse(s)

PRIORITY MARKINGS

(Date).

#13

SECURITY CLASSIFICATION

Top Smart Sacc

Confidential

Restriped Updassified

PRIVACY MARKING

In Confidence

En Clair. Gode

Cypher

Draft Telegram to:-

Peking

No.

(Date)

And to:-

Rich

Immediara Priority Routine

[Secur

Despatched

CYPHER

tion]

Security classification' -if any

[ Privacy marking

-if any ]

[Codeword-if any]

Addressed to

telegram No... 823

CONFIDENTIAL

PEKING

(date) 6 September

And to

6/9

HONG KONG, POLAD SINGAPORE

repeated for information to

823

- . --

Repeat ip:-

Hong Kong

Store

Polad Sore

Saving to...

-[B]

M.I.P.T.

Johnaton.

We decided that it would be better in

commenting on the case to avoid reference to the

warrant and the allegations of espionage (your

telegram No. 806).

Saving to:-

Distribution:-

Supp

FED

Now

ERD R1)

стижну сво

IRD

IPD Copies to:-

Do I Kernell CRED BAT

EXANUNTED SIGNATUREL

Unattributably the spokesman said that we

understood that at the time of his arrest Johnston

had been described as "an enemy of the Chinese

People's Republic";

such an accusation.

we knew of no justification for

The spokesman added that we

were in close touch with the Chartered Bank, who

like us, knew of no action by Johnston which might

have justified his arrest.

3. The spokesman also gave brief details of the

He did

cases of Saunders and Mrs. Gladys Yang.

not refent not mention the matter

exit vioco for

the

SELFS cust

the CROZIERS

Jul 6 Sex

TELEGRAM SECTION Room 124 K.C.S Communications Department

TO:

Fest

FED.

Willi

112

YTC/1

Copy/ies of the following telegram has/have been sent

1433 To H Kong.

Dr. 1. Russell

By Trade

CRED

(Signed)....

(Department). (Date)..

Action taken in Communications Department:

(Initials)...

(Date).

H. G.....

AFTER ACTION THIS FORM SHOULD BE SENT TO

THE APPROPRIATE ARCHIVES DIVISION FOR RETENTION

CONFIDENTIAL

CYPHER/CAT A

ROUTINE COMMONWEALTH OFFICE

TELEGRAA NUMBER 1433

TOP C!

TO HONG KONG

112

6 SEPTEMBER 1968 (F)

CONFIDENTIAL

ADDRESSED TO HONG KONG TELEGRAM HUMBER 1433 OF 6 SEPTEMBER REPEATED FOR INFORMATION TO PEKING AND POLAD SINGAPORE.

YOUR TELEGRAM NO 1937 ↑

WE AGREE BOTH THAT AH APPROACH TO THE LOCAL BANK OF CHINA MIGHT

" DO SOME GOOD AND WITH YOUR ADVICE TO GRAHAM THAT HE SEEK THE VIEWS HOF

OF HIS OWN HEAD OFFICE TO WHOM WE ARE REPORTING THE SUGGESTION AND ÉXPRESSING THE SAHE OPINION.

CROSEC

FILES

F.E.D.

CONSULAR DEPT.

E.R.D.

CONFIDENTIAL

RECEIVED IN ARCHIVES No. 31

9 SEP 1968

Fes/4

11-

NY ZUYÊN D.

170

000

A.& E,W.LTp. GP.66.

NOTHING TO BE WRITTEN IN THIS MARGIN.

112

Registry Fester

No.

EMERGENCY IMMEDIATE

PRIORITY.

Sefres

et.

Confidential.

Restric

Open.

Draft.

Telegram to:-

Ногу кору

No.

(Dale)

1433

And to:-

6/9

* Date and time (G.M.T.) telegram should

reach addressee(s).

(Date)

220...

ROUTINE

Despatched

priority

without

DEFERRED

[Se

[Security classification

-if any

CONFIDENTIAL

[Codeword-if any]

Addressed to.

........

telegram No. 433

Hory Kory

(date) 6 September

------

repeated for information to.

laking

and Ford Anggore

Repeat to

Kayly

Aufs

ICLAD

En Clait. Colla Cypher

Distribution :

Felin

FUD

Your teligsam N° 1057.

fyrore

Ive

buthe that

Lig Ali

exproach

to the locai

Bank of Chernia mykt

advice

to some

goud and

with your your

Consecter Dapt E.R.)

to Graham

that

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Akui

Copies to:- Dr Runel C.RO.D, Bd of Tay.

Вад

news of his cin

Hend offere to

Phome we

are

reporting

the suggestion

the

Dame opinion

xpress my b

$.42

with the bo

En Clair

FOREIGN OFFICE TO PEKING

IVED IN

Vi No.31

SEP 268

Telno. 826

7 September 1968 (FED)

Fer

CLASSIFIED

Addressed to Peking telegram No. 826 of 7 September

Repeated for information to:

Hong Kong

Your telegram No. 824: Johnston.

Mrs. Johnston senior was informed by Mrs Cross, an employee of the Bank. She took the news very well and sensibly.

2. She has left the nursing home and has been in her own home for some ten days. Her health is fair, for her age.

SOSPA

FILES

F.E.D.

Consular Dept. News Dept.

77777

Registry No.

Top Secret.

Secret.

Fasly

Confidential.

Restricted.

Open.

Draft.

Pet

No.

(Date)

Telegram to:-

826

HIH Add gandd

And to :-

EMERGENCY

IMMEDIATE

PRIORITY

ROUTINE

with petority

without

DEFERRED

[Sel

• Date and time (G.M.T.) telegram should

reach addressee(s)....

Security classification -if any

[Codeword-if any]

Addressed to........

telegram No.

(Date)

2/9

THI L

Despatched 14342.

-------+++++++

Leking 86

~-------------

repeated for information to.

E.C

(date).....

Hovy Kory

7/9

➖➖ ➖➖➖➖-----------------

A.EE.W.L16. Gr.686

NOTHING TO BE WRITTEN IN THIS MARGIN.

عسل لا

Repeat to :-

Hory Dory

En Clair. Code Cypher

Distribution :-

FED. Consular dest

News Dyt

and sensibly

She has lift

has been in her own

You telegram

No. 824

Mr. Johnston

senior

by Mrs. Cross.

Johnston

was informed

thew

smployee of

the Bank. She took the

the neers

well

very

has

the nursing николау

home and

home for

Copies to:-

ten days.

Her health is

aye.

for

fair her

Nam

Master Clek.

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TOME

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WT.EE/0.047

15037407

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100

EN CLAIR

IMMEDIATE

ILNO 824

UNCLASSIFIED

Top copy on FebẞZED

FOREIGN OFFICE TO PEKING

6 SEPTEMBER 1968 (F)

ADDRESSED TO PEKING TELEGRAM NO. 824 OF 6 SEPTEMBER. REPEATED FOR INFORMATION TO HONG KONG, POLAD SINGAPORE.

MY TELEGRAM NO. 821: JOHNSTON/.

MEMBERS OF GROUP ARE:

DR. H. CLOUGH (1,0,1

A.RAWLING (1.0.1.)

H. SEDGWICK (SIMON CARVES)

J. DOWNS (SIMON CARVES)

F.P.C. COKER (SIMON CARVES)

SOSFA

DEPARTMENTAL DISTRIBUTION

F.E.D.

NEWS DEPT.

CONSULAR DEPT.

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1.R.D.

I.P.D.

RESEARCH DEPT.

QQQQQ

RECEIVED IN ARCHIVES No.31

- 9 SEP 1968

Fesly

TELEGRAM SECTION Room 124 K.C.S

Communications Department

TO:

F2514.

FED

109 YTC/1

Copy/ies of the following telegram has/have been sent

822 To Peking

Dr. 1. Russell

بر

B/Trade

(CREA)

(Signed)...

(Department).

(Date)..

Action taken in Communications Department:

(Initials).

Z....

(Date)..

9/9...

AFTER ACTION THIS FORM SHOULD BE SENT TO

THE APPROPRIATE ARCHIVES DIVISION FOR RETENTION

Fes/4.

100

EN CLAIR

IMMEDIATE FOREIGN UFFICE TO PEKING

TELNO, 822

LASSIFIED

6 SEPTEMBER, 1968

(F)

بعلم

ADDRESSED TO PEKING TELEGRAM NO 822 OF 6 SEPTENDER REPEATED FOR

INPORMATION TO HONG KONG POLAD SINGAPORE

MIP TE JOHNSTON

THE FOLLOWING 18 TEXT OF STATEMENT |-

** THE CHINESE CHARGE D'AFFAIRES A.19, HR SHEN PING, WAS TODAY SUMMONED BY THE PARLIAMENTARY UNDER-SECRETARY OF STATE. MR FOLEY'S PURPOSE WAS TO RAIBE THE CABE OF HR D♫C. JOHNSTON, OF THE CHARTERED BANK IN SHANGHAI, THE FACTS OF THE CASE ARE THESE. HR JOHNSTON WAS ARRESTED BY THE CHINESE AUTHORITIES IN SHANGHAI ON 25 AUGUST, REPEATED REPRESENTATIONS HAVE BEEN MADE BY THE BRITISH CHARGE D'AFFAIRES IN PEXING, BUT THE CHINESE AUTHORITIES HAVE FAILED TO PROVIDE ANY INFORMATION ABOUT THE CHARGES AGAINST MR JOHNSTON AND HAVE REFUSED THE APPLICATION BY A MEMBER OF THE OFFICE OF THE BRITISH CHARGE D'AFFAIRES IN PEKING TO VISIT SHANGHAI TO SEE MR JOHNSTON. MR FOLEY EXPRESSED STRONG DISSATI 8- FACTION AT THE ATTITUDE OF THE CHINESE GOVERNMENT, AND REPEATED THE DEMANDS MADE IN PIKENG THAT INFORMATION BE PROVIDED ABOUT THE CASE AND CONSULAR ACCESS TO MR JOHNSTON PERMITTED, MR FOLEY ALSO REFERRED TO THE CASES OF OTHER BRITISH SUBJECTS DETAINED IN CHINA, HE ALSO TOOK UP THE QUESTION OF THE OUTSTANDING EXIT VISAS FOR MEMBERS OF OUR MISSION, THERE ARE SEVEN OUTST ALL TOLB,

THE MEETING LASTED HALF AN HOUR'.

2. ASKED WHAT MR SHEN PING SAID IN REPLY, THE SPOKESMAN BAID

** MR SHEN PING TOOK NOTE''.

3. BEEN | FT.

DEPARTMENTAL DISTRIBUTION

BUDKA

F.E.D.

NEWS DEPT.

CONSULAR DEPT.

E.R.D.

I.R.D.

RESEARCH DEPT. I.P.D.

メメ

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No.

DEPARTMENT

FC514 X.X

SECURITY CLASSIFICATION PRIORITY MARKINGS

Unclassified

Immediate →Priority

Routine

* Date and time (G.M.T.) telegram should

reach addresson(s).

6 SEP 1988

(Date)..

1718

Despatched

109

[B]

LILI Y

PRIVACY MARKING

In Confidence

En Clair Code Apher

Draft Telegram to :-

Peking

No.

(Date)

Auditor

822

6/9

MIPT

Repeat to

Hong Kong

Polad Spore

Saving to:-

Distributi Departmental F.E.D., News, Consular, ERD, IRD, Research. J.P.D.

Copies to:-

Dr. I. Russell, C.R.E.D.

Board of Trade

0₤1162016

Security classification" -if any

[Securi

[

Privacy marking -if any

[Codeword-if any]

-- --1111

LIJJ-IIJLE.-----

UNCLASSIFIED

PEKING

Addressed to

telegram No.......

822

(date)

619

And to

repeated for information to

LAT

Saving to

HONG KONG, POLAD SINGAPORE

JOHNSTON

The FOLLOWING IS TEXT OF STATEMENT: -

The Chinese Chargé d'Affaires 8.i., Mr. Shen

Ping, was today summoned by the Parliamentary Under-

Secretary of State. Mr. Foley's purpose was to

raise the case of Mr. D. C. Johnston,

of the Chartered

Bank in Shanghai. The facts of the case are these.

Mr. Johnston was arrested by the Chinese authorities

in Shanghai on 25 August. Repeated representations

have been made by the British Chargé d'Affaires in

Peking, but the Chinese authorities have failed to

provide any information about the charges against Mr.

Johnston and have refused the application by a member

of the office of the British Chargé d'Affaires in

Peking to visit Shanghai to see Mr. Johnston,

Foley expressed strong dissatisfaction at the

Mr.

attitude of the Chinese Government, and repeated the

demands made in Peking that information be provided

about the case and Consular access to Mr. Johnston

permitted.

representatie:

Me, Shen Ping undertook to report the

nie Government, 7

мак

032717 E.W.& S.,Ltd. 164m 3/67.

No Foley also refund to the cases of other Britial subject's defament in China. He also

Footer of the question of the outstanding exit noos

Los ankombers

BUTSTANDING

There are

SEULIA

out missum

outstanding all bla.

The meeting lasted half

ane hour.

2. Asked what Mr Shawn Pung sand in refly,

the spokesman saine "To Shew Ping tool wote".

3. See. m.i.f.t.

dhost

[c]

NOTHING TO BE WRITTEN IN THIS MARGIN

CYPHER/CAT A

Tup. copyon Fe6/3212

IMMEDIATE FOREIGN OFFICE

TELEGRAM NUMBER 821

CONFIDENT | AL

108

TO PEKING

·6 SEPTEMBER 1969.

(F)

~ SEP 1508

CONFIDENTIAL.

ADDRESSED TO PEKING TELEGRAM NUMBER 821 OF 6 SEPTEMBER REPEATED FOR INFORMATION TO HONG KONG POLAD SINGAPORE.

YOUR TELEGRAM NUMBER 823: JOHYSTON,

THE STATEMENT IN MY IMMEDIATELY FOLLOWING TELEGRAM WAS MADE BY NEWS DEPARTMENT AT 12.38 TODAY FOLLOWING A CALL OF THE CHINESE CHARGE D'AFFAIRES ON PARLIAMENTARY UNDER-SECRETARY. (A REPORT OF THE CALL IS BEING TELEGRAPHED TO YOU SEPARATELY).

2. AT INSISTENCE OF 1.0.1. AND SIMON CARVES, WE AGREED THAT THE GROUP SHOULD LEAVE THIS MORNING. WE ARRANGED HOWEVER TO BE. IN TOUCH WITH THEM AT KARACHI OR DACCA, IF NECESSARY.

DETAILS OF THE GROUP IN MY TELEGRAM NUMBER 824.

110

SO SF A

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EN CLAIR

FRIORITY PEKING TO FOREIGN OFFICE

CY COR

TELNO 824

6 SEPTEMBER, 1968

UNCLASSIFIED

167

[ARCHIV

ADDRESSED TO FOREIGN OFFICE TELEGRAM NO. 824 6 SEPTENDRECEIVED REPEATED FOR INFORMATION TO HONG KONG.

JOHNSTON.

- 9 SEP 1968

F05/4

MRS. JOHNSTON HAS ASKED US WHETHER WE CAN TELL HER WHO EROKE THE NEWS TO HIS MOTHER AND HOW SHE REACTED TO THIS.

FIRS. JOHNSTON IS APPARENTLY STANDING UP WELL TO THE STRAIN OF A VERY DIFFICULT SITUATION BUT IT WOULD BE HELPFUL TO HER IF YOU COULD ENABLE US TO ANSWER THESE QUESTIONS.

2. MRS JOHNSTON IS NOW APPLYING SEPARATELY FOR HER EXIT VI SA. WE HAVE SENT A NOTE TO CONSULAR DEPARTMENT SUPPORTING THIS APPLICATION,

MR. CRADOCK

FILES

F.E.D.

CONSULAR DEPT

NEWS DEPT.

بہار

Fe6/32(10

Top

эта сору

on fe

CONFIDENTIAL

Cypher/Cat A

6/3211.

IMMEDIATE PEKING TO FOREIGN OFFICE

Telno 823

CONFIDENTIAL

6 September, 1968

My telegram No. 809: Simon Carves.

. RECEIVED IN

ARCHIVES No.31 -9 SEP 1968

574

Fes/4...

Mr. and Mrs. Hill and Ansell arrived Peking on

5 September. Mrs. Hill will continue her journey to the

U.K. on 7 September. The two men have come to meet

106

Simon Carves party from London, whom the Chinese say will arrive

in Peking on 7 September.

Grateful to know urgently whether this information is correct, and if so what has been decided regarding publicity about Johnston (my telegram No: 810).

Mr. Cradock

FILES

F.E.D.

uuuuu

103

ADVANCE COPIES SENT.

CONFIDENTIAL

E514

$82918

FOREIGN OFFICE, 8.1.1.

29 August, 1968.

FC514

I understand from Mr. Murray that he promised to let you have the text of the report from Peking after Mr. Grudoak's meeting with the Consular Department of the Chinese Ministry of Foreign Affaire following Kr. Johnston's detention. The relevant telegram reads as follows:-

"After repeated requests I finally obtained an interview this afternoon with Mr. Lao, Deputy Divicional Chief of Consular Department. This was 8 low level reception, but we were hardly in a position to choose.

2. I reported the news I had received from Shanghai on Johnston's arrest, expressing my serious concern, and adding that I was sure it would be shared by Her Majesty's Government, I explained Johnston's position as manager of branch whose hand-over to Cannings had been formally socepted and who had applied with his wife in June for exit visas. I referred also to circumstances of his mother's illness and of his own medical complaints which, according to the Chinese doctors, would probably require an operation. I gave kr. Lao a copy of the medicul certificate on this last point.

3. I requested immediate information on charges, if any, against Johnston, and persiusion for a representative of this office to travel immediately to Shanghai to talk to him.

4. Mr. Leo said he would inform me after investigation to relevant departments. I stressed the urgency of the matter and asked when a reply could be expected.

He repeated his phrase and was unable to say how long a reply would take. I said that I expected his reply within a few days at the very latest.

15.

P. H. Taggart, Esq.,

The Chartered Bank,

38 Bishopsgate,

London, E.C.2.

ب تیرا

105

5. This failure to give an immediate reply should not necessarily be construed as malevolence or deliberate delay on representatives part. It more probably reflecta disarray of it all. I had impression that Lae was genuinely not fully informed. we shall keep up enquiries by telephone and, failing a reply, seek another interview in a few days time. da ramain in touch with Shanghai by telephone."

( E. J. Sharland ) Far Eastern Department

GENERAL MANAGERS'

OFFICE

104

TELEPHONE 01-588 36868

PHT/BT

THE CHARTERED BANK

38, BISHOPSGATE LONDON, E. c. 2

26th August, 1968

RED IN

*.31

Festa

Dear Mr Sharland,

Please hand the bearer of this note a copy

of the Peking telegram re Johnston about which I rang

you earlier this morning.

Yours sincerely,

Hig

PH Taggart

Assistant General Manager.

E. J. Sæland Esquire,

Foreign Office,

Downing Street,

S. W. L.

Action taken

CONFIDENTIAL

Cypher/Cat A

PRIORITY PEKING

Telno 810

FOREIGN OFFICE

1 September 1968

roz

{ RECEIVED IN

·A· No. 1 ✓ 3!

-- 3 SE 368

101 T02?

CONFIDENTIAL

Mressed to Foreign Office telegram No. 810 of 1 Septemb Repeated for information to Hong Kong.

Your telegrams Nos. 806 and 807: Johnston

I agree Johnston's arrest is connected with Singapore affair, though Shanghai spy-mania could be a logical reason in itself. It is obviously advisable for Chartered Bank to do all they can to extricate themselves from the too prominent role they have played in Singapore. [?go omitted] Other banks there help by furnishing Bank of China funds to substitute in whole or even in part for 7 million from Bank of China account with

Chartered Bank. F23/24 160

I do not think this effects the arguments for publicity given in my telegrams Nos. 764 and 786 and I agree that we cannot hold the present situation long. For example, a member of the Italian Trade Kission was in Shanghai at the time of the arrest and knows the facts. He has agreed to keep quiet but soon other less amenable foreign visitors to Shanghai will get . the story.

3. I must add that in a recent telephone talk Cannings said he was rather worried that publicity might mean a lot of letters criticicing the Chinese would be sent to the Shanghai community. He may have been intimating that the community are having doubts about the value of publicity for them. I understand their hesitation but regard the arguments in favour as overriding. Publicity abroad and in commercial world could be specially useful.

Our efforts here to obtain information have so far proved fruitless. We have telephoned Consular Deparment daily since 26 August. On 29 August Garside sought an interview but was told on 31 August that Consular Department had no time to see him. His travel application to visit Johnston in Shanghai made on 27 August ras refused on 29 August. There seems no reason therefore to delay publicity after 3 September.

I assume you will ensure that before publicity breaks Johnston's mother is informed.

Chnst

Foreign Office pass Routine Hong Kong.

Mr. Cradock

[Repeated as requested]

DEPARTUENTAL DISTRIBUTION

F.E.D.

Consular Dept.

E.R.D.

3.3.A.D.

News Dept.

NNNNN

CONFIDENTIAL

CYPHER/CAT A

PRIORITY FOREIGN OFFICE

TELEGRAM NUMBER 807

CONFIDENTIAL

TO PEKING 29 AUGUST 1968

(FT

CONFIDENTIAL.

ADDRESSED TO PEKING TELEGRAM NUMBER 807 OF 29 AUGUST

RF I HONG KONG AND BHC SINGAPORE.

M.I.P.T. : JOHNSTON,

101

102

RECEIVED IN

! ARCHIVES No.3*!

- 3 SEP 1968

THE DETAILS WHICH THE CHARTERED BANK HAVE PROVIDED ABOUT THE AFFAIR ARE THESE.

SOME TWO YEARS AGO, WHEN THE BANK OF CHINA IN SINGAPORE WERE IN SERIOUS STRAITS, THEY RAISED A LOAN FROM THE BANK NEGARA (CENTRAL BANK) IN SINGAPORE, MORGAGING THEIR PREMISES. EFFORTS OF THE BANK NEGARA TO RECOVER THE LOAN FAILED, THEY THEREFORE HAD TO RECOURSE TO THE COURTS AND OBTAINED A 'GARNISHEE** ORDER, 1.E. AN ORDER ATTACHING MONEY DEPOSITED BY THE BANK OF CHINA WITH OTHER BANKS IN SINGAPORE. UNDER THE ORDER SOME SEVEN OR EIGHT BANKS IN SINGAPORE WERE REQUIRED TO PAY SUBSTANTIAL SUMS HELD BY THEM IN DEPOSIT FOR THE BANK OF CHINA INTO THE SHERIFF'S OFFICE. THE CHARTERED BANK, THE LEADING BANK IN SINGAPORE, FEARING THAT NEWS OF LARGE PAYMENTS BY NUMBERS OF BANKS IN SINGAPORE MIGHT TO A GENERAL RUN ON BANKS BY SMALL DEPOSITORS, INDICATED THAT THEY HAD ENOUGH FUNDS IN THEIR BANK OF CHINA ACCOUNT TO MEET THE WHOLE SUM INVOLVED (SEVEN MILLION SINGAPORE DOLLARS), AND BY ARRANGEMENT PAID THIS SUM INTO THE SHERIFF'S OFFICE (WHERE IT STILL REMAINS). THE LOCAL MANAGER OF THE BANK OF CHINA AT FIRST THANKED THEM FOR THEIR LEAD IN HANDLING THIS CRISIS: BUT LATER ON, CLEARLY ON INSTRUCTIONS FROM PEKING, HE CONDEMNED THE GARNISHEE'' ORDER AS ILLEGAL AND CRITICISED THE CHARTERED BANK SEVERELY FOR THEIR PARTICIPATION IN AN IMPERIALIST PLOT**

CONFIDENTIAL

12......

CONFIDENTIAL

2. THE CHARTERED BANK MAINTAIN THAT THEY HAD NO ALTERNATIVE BUT TO OBEY THE GARNISHEE** ORDER, BUT THEY RECOGNISE WITH THE BENEFIT OF HINDSIGHT THAT IT WAS PERHAPS UNWISE FOR THEM TO TAKE THE LEAD IN THE WAY THEY DID. THEY HAVE SO FAR DERIVED SOME CONSOLATION FROM THE FACT THAT THE BANK OF CHINA IN SINGAPORE HAS NOT YET ATTEMPTED TO PUSH THINGS THERE TO THE LIMIT. THIS THEY COULD DO BY PRESENTING THE CHARTERED BANK WITH A CHEQUE IN RESPECT OF THE SUM WHICH THE CHARTERED BANK HAVE ALREADY PAID INTO THE SHERIFF'S OFFICE. THE CHARTERED BANK WOULD HAVE TO REFUSE PAYMENT OF THE CHEQUE, AND WOULD AT THE VERY LEAST EXPOSE THEMSELVES TO FURTHER CRITICISM FROM THE BANK OF CHINA FOR NOT ACCORDING OVERDRAFT FACILITIES.

SO SF A

DEPAKTALAMA DISTRIBUTION

F.O.

2.2.D.

Consulent DEFT.

3.R.D.

4.2.A.D.

BE.... JEET.

c.o.

BO NG DEPT.

CONFIDENTIAL

Registry No.

DEPARTMENT

Faclet

SECURITY CLASSIFICATION

PRIORITY MARKINGS

(Date)..

Top Secret

* Date and time (G.M.T.) telegram should

reach addressee(s).

---

ECIPHER

Confidential

Priority

Unclassified

PRIVACY MARKING

[Securit

In Confidence

'Security classification"

if any

CONFIDENTIAL

En Plair. Lode

[

Cypher

Privacy marking -if any

[Codeword-if any]

702

-------

NOTHING TO BE WRITTEN IN THIS MARGIN

16452

Buk

768

Draft Telegram to:-

Peking

(Date)

And to:-

Repeat to, Hong Kong

807

Addressed to

telegram No.....

And to

PEKING

807

(date)

29/8

398 repeated for information to

BHC Singapore

Saving to:- Labide by thems in deforrit for

the Bank of Chine

Distribution:-

Departmental

F.E.D.

Consular Dept.

B.R.D.

S.E.A.D.

News Dept.

Klapin Anok

c.o.

Hong Kong Dept.

Saving to..

HONG KONG AND BHC SINGAPORE

[Abbotto@by---------aldakalpakpakan kamp AZANI

M.I.P.T.: Johns ton.

The details which the Chant und Bank have purrebel about the affait and the. Some two years ago, when the Bank of China in

Singapore were in serious straits,they raised a loan

from the Bank # Negara (Central Bank) in Singapore,

mortgaging their premises. Efforts of the Bank in

Negara to recover the loan failed. They therefore

had to recourse to the Courts and obtained a

"garnishee" order, i.e. an order attaching money

deposited by the Bank of China with other banks in

Singapore. Under the order some seven or eight

banks in Singapore were required to pay substantial

sums into the Sheriff's Office. The Chartered Bank, He landing bank in Singafun

fearing that news of large

payments by numbers of

banks in Singapore might lead to a general run on the

banks by small depositors, Le Singepera indicating that

they had enough funds in their Bank of China account

to meet the whole sum involved (Seven million

by arraing amat

Singapore dollars), and they secondingly paid this

/su

sum into the Sheriff's Office

(where it still remains)

(manager of the

The local Bank

of China Bemaver at first thanked them for their

load

seoperation in handling this crisis; but later on

-clearly on instructions from Peking, he condemned

the "garnishee" order as illegal and criticised the

Chartered Bank severely for their participation in

"imperialist" plot.

2. The Chartered Bank maintained that they had no

alternative but to obey, the "garnishee" order.

But they recognised that the benefit of

Liimid sight

that it was perhaps unwise for them to take the

lead in the way they did They have so far

derived some consolation from

Las

Bank of China in Singapore we

the fact that the

yot not attempt to

push things there to the limit. This they could

Gave some by presenting the Chartered Bank with a

cheque in respect of the sung which the Chartered

Bank has already paid into the Sheriff's Office.

The Chartered Bank would have to refuse payment

of the cheque, and would at the very least

exposed themselves to further oriticism from the

Chine

Bank/for not according overdraft facilities.

0327 17 E.W.& S.,Ltd. 164m 3/67.

24 Ang.

NOTHING TO BE WRITTEN IN THIS MARGIN

CIPHER/CAT A

IDENTIAL

PRIORITY FOREIGN OFFICE 199

TELEGRAM NUMBER 806

CONFIDENTIAL.

ADDI

700

TO PEKING NG

AUGUST 1968 (F) RECEIVED IN

ISED TO PEKING TELEGRAM NUMBER 806 OF 29 AUGUST REPEATED FOR INFORMATION TO HONG KONG AND BHC SINGAPORE.

YOUR TELEGRAM NO. 786 : JOHNSTON.

¡ARCIVES No.31

- 3 SEP 1968

THE CHARTERED BANK THINK THAT THE ARREST OF JOHNSTON MIGHT CONCEIVABLY BE CONNECTED WITH SOME TROUBLE THEY HAVE RECENTLY HAD IN SINGAPORE INVOLVING THE BANK OF CHINA, DETAILS OF THE AFFAIR ARE IN MY IMMEDIATELY FOLLOWING TELEGRAM.

2. IF THERE IS INDEED A LINK AND THE CHINESE ARE IN EFFECT HOLDING JOHNSTON FOR RANSOM, THEY ARE UNLIKELY TO ADMIT THIS TO YOU OFFICIALLY AND IT CLEARLY WOULD BE UNDESIRABLE FOR YOU TO SAY ANYTHING TO THEM WHICH MIGHT SEEM TO IMPLY A CONNEXION. ANY INDICATION OF CHINESE INTENTIONS IS MORE LIKELY TO COME THROUGH THE BANK OF CHINA. YOU MIGHT HOWEVER, WHEN NEXT YOU HAVE AN OPPORTUNITY TO DISCUSS THE MATTER WITH THE CHINESE, ASK WHETHER THE REASONS FOR WHICH JOHNSTON WAS ARRESTED RELATE TO HIM PERSONALLY

OR TO THE BANK,

3. THE CHARTERED BANK ARE NOT AT ALL KEEN ABOUT PUBLICITY, WHICH THEY ARGUE MIGHT BE HARMFUL TO JOHNSTON. (THEIR RELUCTANCE ABOUT PUBLICITY IS SHARED BY THE HONG KONG AND SHANGHAI BANK). WE HAVE EXPLAINED THAT IF WE ARE NOT TO BE CRITICISED FOR WITHHOLDING DETAILS OF THE TRUE STATE OF AFFAIRS IN CHINA FROM THE BUSINESS COMMUNITY HERE WE SHALL HAVE TO MAKE A STATEMENT. WE COULD JUSTIFY DELAY OF UP TO SAY 3 SEPTEMBER TO GIVE AN OPPORTUNITY FOR THE CHINESE TO PROVIDE YOU WITH DETAILS1 BUT A STATEMENT COULD NOT BE DELAYED MUCH BEYOND THAT. THE CHARTERED BANK ACCEPT THIS AND WILL PROBABLY ISSUE A PARALLEL STATEMENT.

THE CHARTERED BANK HAVE INFORMED JOHNSTON'S FAMILY OF HIS ARREST ON THE LINES OF YOUR TELEGRAM NO. 788.

CROSEC

DEPARTMENTAL DISTRIBUTLUN

F.E.D.

CONSULAR DEPT.

E.R.D.

8.E,A,D.

NE.../3 DEPT.

CONFIDENTIAL

Copy Sent to Ram. 9 Bola.

Registry No.

DEPARTMENT

Faoler

SECURITY CLASSIFICATION PRIORITY MARKINGS

Top Spcret

Confidential Raptricted Upalkalled

Flash

lechediate "Priority Routine

(Date).

* Date and time (G.M.T.) telegram should

reach addressee(s).

ALLILJO qua|||-|

29/4/58

CYPHER

161)

23302

[A]

NOTHING TO BE WRITTEN IN THIS MARGIN

16452

24/18168

PRIVACY MARKING

In Confidence

En Clair. Code

Cypher

Draft Telegram to:-

Peking

No.

(Date)

And to:-

[Secu

Security classification"

--- CONFIDENTIAL

-if any ation]

[ Privacy

Privacy marking -if any

[Codeword-if any]

Addressed to

telegram No...

806

And to

998

POKING

(date)

--- L

806

repeated for information to

HONG KONG AND FHC SINGAPORE

SASALARI SELAMAT

Repeat to Hong

Kong

BHC Singapore

5.17

Saving to:-

Distribution Departmental F.E.D.

Consular Dept. E.R.D.

S.E.A.D. News Dept.

for.

Dept.

Saving to

29 lue

Your telegram No. 786 27 August /:

Johnston.

The Chartered Bank think that the arrest of

avigli

Johnston may conceivably be connected with some

trouble they have recently had in Singapore involving

the Bank of China. Details of the affair are in my

immediately following telegram.

indust

2. If there is a link and the Chinese are in

effect holding Johnston for ransom, they are unlikely

to admit this to you officially; and it clearly would

be undesirable for you to say anything to them which

might seem to imply a connection. Any indication of

Chinese intentions is more likely to come through the

Bank of China.

You might however, when next you

have an opportunity to discuss the matter with the

Chinese, ask whether the reasons for which Johnston

was arrested relate to him personally or to the Bank.

The Chartered Bank are not at all keen about

/publicity

publicity, which they argue might be harmful to

Johnston. (Their reluctance about publicity is

shared by the Hong Kong Shanghai Bank). We have

explained that if we are not to be criticised for

withholding details of the true state of affairs in

China from the business community here we shall

have to make a statement We could justify delay

of up to say 3 September to give an opportunity for

the Chinese to provide you with details;

statement could not be delayed much beyond that.

The Chartered Bank accept this and will probably

issue a parallel statement.

but a

The Chartered Bank have informed Johnston's of him soment

family on the lines of your telegram No. 780.

032717 E.W.& S.,Ltd. 164m 1/67.

Hans

128 Aug.

NOTHING TO BE WRITTEN IN THIS MARGIN

[

CYPHER/CAT-A-

ROUTINE H.C. SINGAPORE

TELEGRAM NUMBER 878

IDENTIAL.

CONFIDENTIAL

100

{ RECEIVED !

You may be interested in seeing

the enclosed copy of a letter from the Bank of China to the British Bank of the Middle East, Dubai.

Yours ever,

Slal

T.J Clark)

Far Eastern Department,

Foreign Office, London, S.V.1.

бел

UNCLASSIFIED

中

TELEGRAPHIC ADDRESS:

"CHUNGKUO"

國銀行上海分行

Bank of China

Shanghai Branch

When

TELEPHONE

21 7 4 6 6

23. Chung Shan Road (E.1)

REF. No

ER 1021/et į

電膳密

GODE USED:

PETERBON INTERNATIONAL CODE

340 EDITION

4TH EDITION

Alpi

QUOPATION FO.. CFA TRMAN MAO

THE FEOPLE WHO HAVE TRIUMPHED IN THEIR OWN REVO- LUTION SHOULD HELP THOSE STILL STRUGGLING FOR LIBERA - TION. THIS IS OUR INTERNATIONALIST DUTI.

The British Bank of the Middle East,

Dubai.

24th July, 1968

Vie, following the teachings of Chairmar. Mao, should support the struggles of the working class and the oppressed people of all countrica aguinatuule teallimary rule, support the national liberation struggle of the people of Asia, Africa and Latin America.

The extensive dissemination of Mao Tse-tung's thought throughout the world has spurred the development in depth of the contemporary world revolution. The tremendous victory of China's great proletarian cultural revolution has inspired the people of all countries with the revolutionary will to dare to struggle and dare to win victory.

In order to firmly support the revolutionary maes movements of the world, The People's Insurance Company of China have decided not to insure hereafter the risks of S.R.C.C. Strike, Riots & Civil Commotion). Therefore you are requested to cancel all such clauses appearire in your letters of credit already opened in the pas', am I these credits to be opened

for in the future, not to incorporate such clauses into them any

more.

Please take note of the above and contact your princi- pala immediately in this respect.

Bank of China, Shanghai Branch

(FC 5/4)

CONFIDE`TIAL

RECEIVED IN ARCH 25 No.31

1, AUG 1968

Feste

FOREIGN OFFICE, 8.1.1.

14 August, 1968.

British Community in Shanghai

I understand that Theo Peters as a result of meetings he had with members of the British community in Shanghai on his way out of China has written to you expressing concern about the morale and conditions there, Your telegram No.

681 reported that formalities for the transference of management of the Chartered Bank's Shanghai Branch from Johnston to Cannings have been completed and that this alight sign of movement had given a little encouragement to the Shanghai community.

2. We are concerned however that there has been no news of Johne ton's exit visa, and that Self of the Hong Kong Bank continues to be held in China.

3. You have, I know, from time to time made representations on Self's behalf but I should be grateful if you could let me know of the latest position of his case, nd whether or not you consider that further representations would be helpful. The Croziers are also, of course, overdue to leave and further representations on their behalf may also be appropriate.

4. I do not think that we ought yet to take official action over the Johnatons since by Chinese standards they have not yet been waiting over long. I should be grateful however for your considered views on what action they could take apart from representations, should the Johnstons also fail to obtain exit visas, But, as I see the only weapon we have at our disposal is publicity which might do more harm than good. The Banks clearly cannot take strong action themselves while so many of their employees remain in China,

A. J. Hunter, Esq.,

PEKING.

(E. J. 8harland)

Far Eastern Department

CONFIDENTIAL

Cypher/Cat A

PEKING TO FOREIGN OFFICE

TELNO. 681

19 CL

RESTRICTED

25 July 1968

RECEIVED IN ARCHIVES N⚫.31 29 JUL 1968

FC$14.

RESTRICTED

Addressed to F.0. telegram No. 681 of 25 July Repeated for information to:

Hong Kong.

Johnston of Chartered Bank in Shanghai has informed us that Chinese Authorities have completed formalities for transference of management from himself to Cannings. Although he has not (repeat not) yet received exit visa, this sign of movement has given mild encourge- ment to Shanghai Community.

F.O. pass Hong Kong.

Sir D. Hopson

[Repeated as requested]

DEPARTMENTAL DISTRIBUTION

F.0.

F.E.D.

S.E.A.D.

NEWS DEPT.

C.O. H.K.D.

77777

RESTRICTED

FE Dept

Registry F

No.

Top Secrep

Confidential.

Restricted.

EMERGENCY IMMEDIATE

PRIORITY

KOUTINE

with

without priority

DEFERRED

* Date and time (G.M.T.) telegram should

reach addressee(s)..

(Date)-

Despalehed

08.4-1

KECEIVED IN

No.

Draft.

Telegram to:-

Bridg

(Date)

And to:-

[Security classification]

-if any

[Codeword-if any}

680 Addressed to

0116

telegram No...........

חי

Repeat to:

1194

dyspepong

En Claip Corte Cypher

Distribution:-

CON

25 JUN 1968

FCS/4

(date)_24

repeated for information to Hang Kong

I'LL ALLAALIJILLIN-------

Qtor telmo, 650 :

21/6

Powi) Lungszere

DU NASDA

Chartered Bank.

Afte consulting their Branch in Hong Kong the Bank Thave decided that they

mut attempt to

ween though

VISA

200

JOHNSTON

of replace Johnstin

EXIT

gunsmatice f

sust

21/6

152-6158

حالات

باد

(14486) W: 38519-254 125m 2/52 D.L.

NOTHING TO BE WRITTEN IN THIS MARGIN.

Dersitment an

visa for him

вама

FED.

wvill therefore travel

Consular Dish

June.

Copier to

sie obtained. Cannings

to Shanghai

2. They have however laken over

point that they should give

thing

few

hostages to fortun

pressible. Ms.

CANNINGS

Causings is setuming

the U.K

and

I will ust

two of there

with ndi

to China for of months.

There will be

visit's by the

at may take

children (until after the Jahrstions

Johrations have

lift.

Meari-hile Johnston has applied

an exit pemuit for his wife

apparently

and / hiper to is receive it within 14

days

June.

NOTHING TO BE WRITTEN IN THIS MARGIN.

OUT TO SEND KONG TELN 1194 1/6 CYPHER CAT.'. UIT 1. PEELING

OUT TO POLAD SINGAPORE TEL.

CYPHER CAT..

PRIORITY FOREIGN OFFICE

TELEGRAM NO 680

CONFIDENTIAL

TO PEKING

21 JUNE 1968 (F)

CONFIDENTIAL

ADDRESSED TO PEKING TELEGRAM NO '680 OF 21/6 REPEATED FOR

INFORMATION TƠ HONG KONG AND POLAD SINGAPORE.

MY TELEGRAM :10 650: CHARTERED BANK.

AFTER CONSULTING THEIR BRANCH IN HONG KONG THE BANK HAVE

DECIDED THAT THEY MUST ATTEMPT TO REPLACE JOHNSTON EVEN

THOUGH NO GUARANTEE OF AN EXIT VISA FOR HIN CAN BE OBTAINED.

CAILTINGS WILL THEREFORE TRAVEL TO SHANGHAI ON..25 JUNE.

2. THEY HAVE HOWEVER, TAKEN OUR POINT THAT THEY SHOULD CIVE AS

FEW HOSTAGES TO FORTUNE AS POSSIBLE. MRS CANNINGS IS RETURNING

TO THE U.K. AND WILL NOT GO TO CHINA FOR TWO OR THREE MONTHS.

THERE WILL BE NO VISITS BY THE CHILDREN AT ANYRATE UNTIL AFTER

THE JOHNSTONG HAVE LEFT.

3. SEAN HILE, JOHNSTON HAS APPLIED FOR AN EXIT PERIT FOR HIS

WIFE AND APPARENTLY HOPES TO RECEIVE IT WITHIN 14 DAYS.

30 SFA

DEPARTMENTAL DISTRIBUTION

F.O. F.E.D.

CONSULAR DEPT.

DDDDD

CONFIDENTIAL

CYPHER CAT.A.

PRIORITY FOREIGN OFFICE

TELEGRAM NO 689

CONFIDENTIAL

TOP COPY COPY

TO PEKING

21 JUNE 1968 (F)

CONFIDENTIAL

ADDRESSED TO PEKING TELEGRAM NO 600 OF 21/6 REPEATED FOR INFORMATION TO HONG KONG AND POLAD SINGAPORE.

MY TELEGRAM NO 650 CHARTERED BANK.

AFTER CONSULTING THEIR BRANCH IN HONG KONG THE BANK HAVE DECIDED THAT THEY MUST ATTEMPT TO REPLACE JOHNSTON EVEN THOUGH NO GUARANTEE OF AN EXIT VISA FOR HIM CAN BE OBTAINED. CANNINGS WILL THEREFORE TRAVEL TO SHANGHAI ON 25 JUNE.

2 THEY HAVE HOWEVER, TAKEN OUR POINT THAT THEY SHOULD GIVE AS FEW HOSTAGES TO FORTUNE AS POSSIBLE. MRS CANNINGS IS RETURNING

TO THE U.K. AND WILL NOT GO TO CHINA FOR TWO OR THREE MONTHS.

THERE WILL BE NO VISITS BY THE CHILDREN AT ANYRATE UNTIL AFTER

THE JOHNSTONS HAVE LEFT.

3. MEANWHILE, JOHNSTON HAS APPLIED FOR AN EXIT PERMIT FOR HIS WIFE AND APPARENTLY HOPES TO RECEIVE IT WITHIN 14 DAYS.

SO SFA

DEPARTMENTAL DISTRIBUTION

F.0.

F.E.D.

CONSULAR DEPT.

DDDDD

CONFIDENTIAL

Ed (5064)

CONFIDENTIAL

RECTV D

24 JUN 1968

FC 5/4

Tel sent for dega lih

Mr. Maw ay Mamay.

Reference..

Haff of Charlond band in thoughar

telephoned

Mr. Anker of the Chartered Bank

las evening

A report the

: Bank's final decision about

the

of their thaughan of branch by Mr

take-ove

bannings from Mr. Johnston. The decision

has been made after consultations with the

Bank's Hong Kong

brauch.

Mr. Cannings will leave Hong Kong

for though an

25 June

His wife

hem

and

the well

test

до

however wise not accompany

returning to Britain

to China for at-

lead 2/3 months

and their children will not

ninke

any

visit's under and

until

the Jhuestions

ATT

have lift

/3.

CONFIDENTIAL

13.

! Hery Kong

In a telp bone conversation withi

Mr. Johnston reported that he

had applied für

ex it

basa fr

his

wife

and

issered with in

hopes

Auther experied the Bank's

that

it would be

14 days.

Mr.

gratitude for

our

uiterut

their problems

ļ and for

advice

He explained that

had fell slijed to

while they had fell-

adhere t

their expinal exces

that it

cons exential

to do everything possible

obtain

the departure of the Ihestions from China

our

vias

the

danger of increasing

-number of hostages in

lehmere hards

had laund

them k

advise

Mr Caming's

very theugly against taking his life to very

bhina with sun, which

hall accepted.

advice

I attach a draft lilymar to Sching

معدہ کی بیوی کو ان کے

филт

Féé

Festet

CYPHER CAT A

PARITY FOREIGN OFFICE

TELEGRAM KUMBER 650

COMIDANTIAL

TO PEKING

13 JUNE 1968

(FED)

CONFIDENTIAL,

ADDRESSED TO PEKING TELEGRAM NUMPER 650 OF 13/6 REPEATED FOR INFORMATION TO HONG KONG AND POLAD SINGAPORE.

YOUR TELEGRAM KO 541: CHARTERED BANK

MURRAY SAN REPRESENTATIVE OF THE BANK YESTERDAY AND PUT TO HIM STRONGLY THE POINTS IN YOUR TELEGRAM UNDER REFERENCE.

2. ACCORDINGLY A SENIOR MEMBER OF THE BANK CALLED ON THE OFFICE OF THE CHINESE CHARGE D'AFFAIRES YESTERDAY AND ATTEMPTED TO GET SOME SORT OF ASSURANCE THAT ONCE THE CANNINGS HAVE TAKEN OVER THERE WOULD BE NO DIFFICULTY ABOUT THE JOHNSTONS LEAVING. THE CHINESE WERE NON-COMM ITTAL AND WERE NOT PREPARED TO RAISE THE PROBLEM WITH PEKING. THE BANK HAVE CABLED THEIR MANAGER IN HONG KONG AND HAVE ASKED HIM TO SUGGEST TO JOHNSTON WITH WHOM THEIR HONG KONG BRANCH IS IN TOUCH WEEKLY BY TELEPHONE THAT HE SHOULD APPLY FOR AN EXIT VISA AT LEAST FOR HIS WIFE BEFORE CANEINGS' ARRIVAL. CANNINGS WILL NOT LEAVE HONG KONG UNTIL THEY RECEIVE FURTHER INSTRUCTIONS.

J. THE BANK CONSIDER HOWEVER, THAT THEY MUST ATTEMPT THE REP LACEMENT EVEN WITHOUT PRIOR ASSU RANCES ABOUT AN EXIT PERMIT FOR THE JOHNSTONS. IN THEIR VIEW THE JOHNSTONS WILL CERTAINLY NOT BE ALLOWED TO LEAVE BEFORE A REPLACEMENT HAS TAKEN OVER, AND MORALE IN SHANGHAI WOULD SUFFER MORE IF JOHNSTON WERE LED TO BEL LEVE THAT HE WILL NOT BE REPLACED IN THE FORESEEABLE FUTU FE THAN IF AT WORST HE WAS NOT ALLOWED TO LEAVE AFTER CANNINGS' ARRIVAL.

4. THE BANK WILL BE IN TOUCH WITH US AGAIN WHEN THEY HAVE RECEIVED A REPORT FR CH HONG KONG ON JOHNSTON'S REACTIONS TO THE SUGGESTION IN PARA 2 ABOVE.

5. THE BANK CONFIRMED THAT CANNINGS' CHILDREN INTEND TO VISIT SHANGHAI FOR THE HOLIDAYS ONLY.

THE CHINESE HERE HAVE SAID

THAT THERE WILL BE NO DIFFICULTY ABOUT VISAS FOR THEM.

S GFA

DEPARTMENTAL DISTRIBUTION

F.E.D.

CONSULAR DEPT.

Noted-

June

کر

NOTHING TO BE WRITTEN IN THIS MARGIN

* Date and time (G.M.T.) telegram_should

reach addressee(s)

Registry No.

DEPARTMENT

Fe64.

SECURITY CLASSIFICATION

Top Secret Secret

Confidential

Restricted

Unclassified

PRIORITY MARKINGS

Flash Immediate

(Date)

MITIPOLO MALIIJJLLI

Routine

PRIVACY MARKING

[

In Confidence

Security classification'

if any

Despatched

ication]

En Clair.

[

Privacy marking -if any

]

CONFIDENTIAL

Code Cypher

Draft Tejégram to:-

[Codeword-if any]

Addressed to

Peking

PRKING

telegram No....... 650

----- LLL-

ILI

(date) 1.3. Juma, 1968.

650

And to...

13.6.68

(Date)

And to:-

Repeat to:-

HONG KONG 33

POLAD, SINGAPORE

repeated for information to .... liong Kong Ind POLAD SINGAPORE,

Saving to.

Your telegram No.541: Chartered Bank

Kurray say representative of the Bank yesterday

shamshy

and put to him the points in your telegram under

reference.

Saving to:-

Distribution:-

Departmental

r.E.D. Consular

Copies to:-

Accentingly

senior member of the Bank called on the Office

of the Chinese Chargé d'Affaires yesterday and attempted

to get some sort of assurance that once the Canninga

have taken over there would be no difficulty about the

Johnstons leaving. The Chinese were non-committal bet and

were not prepared to raise the problem with Peking.

The Bank h! cabled their Manager in Hong Kong and have

asked him to suggest to Johnston with whom their

Hong Kong branch is in touch weekly by telephone that

he should apply for an exit visa at least for his wife

before Cannings' arrival. Cannings will not leave

Hong Kong until they receive further instructions.

CONFIDENTIAL

/3..

CONFIDENTTAL

3. The Bank feet, however, that they must attempt the

replacement even without prior assurances about an exit

permit for the Johnstons. In their view the Johnstons

will certainly not be allowed to leave before a replacement

has taken over; and morale in Shanghai would suffer

more if Johnston were led to believe that he will not be

replaced in the foreseeable future than if at worst he

was not allowed to leave after Cammings arrival.

he in Fowly with 3

The Bank will contest/u3 2gain when they have

received a report from Hong Kong on Johnston's reactions to

the suggestion in para. 2 above.

The Bank confirm that

Caumny i cleddsen intend to Санторі

haye

mat Shaughan for the backways only. The Chimne [have

Sand that there will be

difficulty about visas for

stau..

(8430) D4,833346

1/64 G.W.BLA, Op.963

Janis

CONFIDENTIAL

مسات

NOTHING TO BE WRITTEN IN THIS MARGIN

CONFIDENTIAL

Reference...

RECEIVED IN ARCHIV2- 5-No 31

Record of Meeting

17 JUN 1968

Faster

call of

Staff of Chartered Bank in Shanghai: Mr. Arthur on kr. ames Burray, 12 June 1968

Kr. Arthur called at Mr. Murray's request to discuss the problem of the replacement of Mr. Johnston, the Manager of the Chartered Bank branch in Shanghai, by Mr. Cannings.

Kr. Murray put to Fr. Arthur the points raised by Sir D. Hopson in his telegram No. 541. He asked Kr. Arthur that the Bank endeavour to obtain from the Chinese some form of assurance that, once kr. Cannings and his wife had arrived in Shanghai, Kr. Johnston and his wife would be allowed to leave.

Mr. Arthur confirmed that the intention was that the Cannings' children should visit them for the euamer holidays only, and that the Chinese Mission in London had undertaken that visas would be available. The Cannings were due to leave Hong Kong for Shanghai on 17 June Their visas are valid until 1 July. He further said that Mr. Johnston had been consulted, when the question of visas for the Cannings was first raised about his own exit visa, and had explained that there we no hope of his getting a visa until the Cannings had arrived. The Chartered Bank had always found the Chinese helpful in the past, and, indeed arrangements for Mr. Cannings to take over their Shanghai branch had gone very smoothly so far. The Bank was concerned lest an attempt to obtain assurances about the Johnston's' departure make difficulties by making the hand-over into a political problem.

Kr. Murray said that, unfortunately, the whole question of British subjects in China was already a political question. The Foreign Office was under pressure about British subjects in China; if the Cennings went into China and the Johnstons failed to obtain their exit visas, the problem would to that extent have been worsened.

Kr. Arthur agreed to put Mr. Murray'a views to hie General Managers and promised to keep Mr. Sharland informed of developments.

Far Eastern Department

14 June, 1968

Ispan

now unt

CONFIDENTIAL

WORK HEND

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No.

SECURITY CLASSIFICATION

Top Secret.

Secrol

Confidential.

Restricted. Unclassified.

PRIVACY MARKING

Flag A

In Cond

DRAFT Record of Heeting

Type 1 +

To:-

From

Telephons No. & Ext.

Department

Aure 14/6

Staff of Chartered Bank in Shanghai: call of

Mr. Arthur on Mr. James Murray, 12 June, 1968

Mr. Arthur called at Mr. Murray's request

to discuss the problem of the replacement of

Mr. Johnston, the manager of the Chartered

Bank branch in Shanghai by Mr. Cannings.

Er. Kurrey put to Mr. Arthur the points

raised by Sir. D. Hopson in his telegram

No. 541. He asked Kr. Arthur that the Bank

endeavour to obtain from the Chinese some form

of assurance that, once Mr. Cannings and his

wife had arrived in Shanghai, Mr. Johnston and

his wife would be allowed to leave.

Er. Arthur confirmed that the intention

was that the Cannings' children should visit

them for the summer holidays only, and that the

Chinese Mission in London had undertaken that

visas would be available.

The Cannings were

due to leave Hong Kong for Shanghai on 17 June.

Their visas are valid until 1 July. He further

said that Mr. Johnston had been consulted, when

the question of visas for the Cannings was first

raised, about his own exit visa, and had

explained that there was no hope of his getting

there

a visa until the Cannings had arrived. The

Chartered Bank/had always found the Chinese

/bad

helpful in the past, and, indeed arrangements

for Mr. Cannings to take over their Shanghai

branch had gone very smoothly so far.

/Bank

The

Bank was concerned lest an attempt to obtain

assurances about the Johnston's departure

make difficulties by making the hand-over

into a political problem.

Mr. Murray said that, unfortunately, the

whole question of British subjects in China

heady

was new a political question. The Foreign

chant Buitele matjests office was under pressure to help those

alseedy in China to leave; if the Cannings

went into China and the Johnstons failed to

obtain their exit visas, the problem would to that unt

have been cerebrumad, worsened.

Mr. Arthur agreed to put Mr. Murray's

views to his General Margers and promised to

keep Mr. Sharland informed of developments.

JMI

استانی

NOTHING TO BE WRITTEN IN THIS MARGIN

Ed (5084) |

Mr. Murray

Reference

RECEIVED IN

AR V. No.31

1 7 JUN 1968

Faisla

I attach a record of your meeting with Mr. Arthur of the Chartered Bank.

Mr. Arthur promised that he would let me know what decisions were taken by his General Manager. I think that we should wait until we have heard from him again before we cable

Peking.

Yes.

Sheuland

(E. J. Sharland) 13 June, 1968.

13 June.

Agen

Ed (5084)

Flay

Mr. Myway

CONFIDENTIAL.

Reference.

staff of Chartered Bank in

VED IN

No.31

17 JUN J68

the trees/ex

Pring telegram N° 541 of 10 June

Express, lovcem

about

the animal in thaughan

Mr. bannings, who

is due to replace

Johnston

manager of

the

Chartered

Bank branch there. Peking

recommend (para 3)

that we

the pisu ponti on

contact the Bank

to them ank

and explain

that of

the blunc

bill

not fur

helpful reply

about the prospects for

exet viser for the

Jolurations, eve

rcouru- cnd

that the banning,

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the banning ove

are

due

to mach

Munghar

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Flay is

about 18 June.

letter of 8 Guil to

M. Johnston, Peking

advised

that the bevé

way of handling the change of managers

was to

adhere to

the

nomial procedure

far

as possible

that

procedure is

/outlined

CONFIDENTIAL.

Flag

outlined ev

Mr.

Johnation's lette

27 Manche

to Reking.

It is impotant

hoveve that

I've should try t

avoid

repetition of

the Hong

what happened in the

Care

Kory Bank who

have had

Mr. self and

and his

his "repla

com ent

two manager.

Lachlan - both in Shanghai since May last

year

mygirl therefore

therefore that

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thest to Arthur

You have informed

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Mo Shyrtar

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BA (2009)

Mr. Jane Turray

CONFIDENTIAL Reference....

RECEIVED IN

ARCHIVES No.31

14 JUN 1968

FESA.

44.1

Staff of the Chartered Bank in Sharrhei

Mr. Arthur telephoned this morning to report developments since his meeting with you yesterday.

2. He discussed the question of Mr. Johnston's replacement by Mr. Cannings with the General Managers and then paid a call on the Office of the Chinese Chargé d'Affires where he sawthe Head of their Visa Section. The Chinese were non-committal. While they made no suggestion that there would be any difficulty over Mr. Johnston's visa they claimed that the problem is outside the scope of the office in London and they were not prepared to raise it with Peking.

3. Nr. Arthur reised the question by saying that

Mr. Johnston's son was unwell and the Bank was concerned that there would be no difficulty about his leaving China once Mr. Cannings had taken over from him. explained the Bank's concern by reference to the problems of other British Subjects in China. The Chinese countered by pointing out that he would know quite well whose fault the present problems were and that it was not the Chinese who were suppressing Chinese deems in Hong Kong.

。

The Bank has cabled their Manager in Hong Kong asking him to suggest to Mr. Johnston by telephone that Johnston should immediately put in for an exit visa for his wife if not for himself. The Bank proposes now to wait until they have Kr. Johnston's reactions to the suggestion. Meanwhile the Cannings will not leave Hong Kong until they receive further instructions.

5. Kr. Arthur pointed out, however, that the feeling in the Bank is that they must go ahead with the handover aven if they get no undertaking from the Chinese that the Johnstons will be allowed to leave, The Bank considers that there will certainly be no possibility of the Johnstons leaving before the replacement has taken over and that if the Johnstons once get the idea that there is a doubt about their being replaced the effect on morale in Shanghai will be much greater than if the Cannings went in and the Johnstons could then not leave. The General Kanngers of the Bank, however, believe that once Mr. Cannings has arrived and taken over the chances of the Johnstons being allowed out are much better than 50/50. They believe that if difficulties arose the Bank of China would be prepared to intercede on their behalf.

6. The Bank will be in touch with us again when they have heard from Hong Kong.

2 albach a

draje likijsarn to feking.

Jaland

Tilgram seat for deportch

Ente

باشم

CONFIDENTIAL

(B.J.Sharland) 13 June, 1968

Cypher/Cat A

CONFIDENTIAL

TOP COP 85

RECEIVED IN ARCHIVES No.31

IMMEDIATE PEKING

FOREIGN OFFICE

Telno 541

10 June 1968

10 JU

AFIDENTIAL

Feb/4

Addressed to Foreign Office telegram No. 541 of 10 June, Repeated for information to Hong Kong.

My telegram No. 372: Chartered Bank.

Neither Selfs nor Croziers have yet received visas.

view of this and of discouraging tone of interview reported in my telegram No. 526, it seems increasingly unlikely that Johnstons -Will be allowed to leave next month.

Fe3/3 332

2. We have now urgently to consider whether Chartered Bank should be advised to postpone Canning's arrival in Shanghai, own view (strongly supported by Pia, Manager in Shanghai on a recent visit here) is that a repetition in this case of the Hong Kong and Shanghai Bank situation would have a very bad effect on the already low morale of Shanghai British community, and must be avoided at all costs. A recent letter to us from Mrs. Johnston implied that, although they were understandably anxious for Crefer to come, the situation would only be viable if Mrs. Johnston at least got her exit visa, or Codes were allowed by Chinese (and prepared) to stay indefinitely in a hotel. Reither of these conditions seems likely to be as it is as prevent.

3. I suggest that Bank be advised first to contact the Chinese in London, explain the problem frankly, and ask for assurance that Johnstons visas will be forthcoming, or at least for a clarification of the position. In the light of the Chinese answer they might then consider, in consultation with us, whether to let Crosiers ammy come on schedule. Unless answer is unexpectedly helpful, we shall Imost certainly have to advise that Crosiers' arrival be postponed until elit visa outlook has improved (through issue of exit visas to Hong Kong Bank staff or possibly to our own senior staff).

Johnston has impression that is daughter is scheduled to arrive with him and stay for a year. This conflicts with your report to us (your telegram No. 416) that children were coming for the summer holiday only. I hope the children will be coming for as short a time as possible, since the tense atmosphere of Shanghai community (especially since development reported in my telegran No. 531) will not be good for them.

Ft (139) Foreign Office pass Friority Hong Kong No. 387.

DEPARTMENTAL DISTRIBUTION

[Repeated as requested)

ADVANCE COPIES SENT

Sir D. Hopson

F.0.

F.E.D.

Consular Dept.

C.C.

H.K.Dept.

DSAO

Personnel Dept.

CONFIDENTIAL

NNNNN

Paddick lettage Churd Lane

May the 1960

Sidtidam G O. Robert Esq

Rec'd 16/5 Dear Lu 600

I am & receipt of

Jum favor of of May. Ifn estud

I Hank you. I hardly expected

immediate resects, but may daughter is Su untrappy olasa feeling Hat they are forgillin

any

I can nur assure her Hat thes

mit stil

F25/4.

Agam Hanking Jr.

Jus Sincerely

Else & Soune

as not

F.E.D

No reply needed

Dept.

aply

+45

• Fc3/4

Cypher/Cat A

FOREIGN OFFICE TO PEKING

CONFIDENTIAL

Telno 192 15 May 1968

(F)

CONFIDENTIAL

Addressed to Peking telegram No. 492 of 15 May Repeated for information to Hong Kong

My telegram No. 453: Shanghai Banks,

Mr. and Mrs. Cannings scheduled to reach Shanghai on or

about 18 June.

SOSFA

DEPARTMENTAL DISTRIBUTION

F.O. F.E.D.

Consular Dept.

C.0. Hong Kong Dept.

CONFIDENTIAL

за

1010

abby

Registry No.

DEPARTMENT

Festa

SECURITY CLASSIFICATION

Top Secret

Secret

Confidential

Reveristad

Lelded

PRIORITY MARKINGS

Rushy Impédiace

* Date and time (G.M.T.) telegram should

reach addressDe(s).

ניוויי.

83.

CYPHER

---------

Routine

PRIVACY MARKING

[

Security classification"

In Confidence

Ed Clair

[

Privacy marking -if any

------די--ו-ו--ו11

TFIT

LONEDENTIAL

---

Code- Cypher

Draft Telegram to:-

Pikyky

499

(Date)

And to:-

Repeat to:-

SIST

Mengkong 868

Saving to:-

[Codeword-if any}

Addressed to

telegram No..

And to

]

лер

--------------- ■

repeated for information to

Saving to....

Likuy

▬▬▬▬▬||YAIHMAPUH+||

(date)

15/5

Hory Kony

Могу

My for letyram

No 453

Himmeloanpedotum---H

Shangliai Banker.

scheduled

Mr and

Mus

CANNINGS

about

3 June.

reach Shanghai

SENESTE

NOTHING TO BE WRITTEN IN THIS MARGIN

Distribution:--

Departmental

Fo.

FED

Consular Type-

H.A

影

EJ (4206)

F25/4

Mr.

Denny.

Reference.

bank staff in Shanghar

The Chartered Bank. have telephoned

that

Day

Mr. Mrs. Cannings

Sheduled t

assive anwe

in Shanghai

about

18 June

al attach

chaft-

telegram informing Peking

acland

•how

Tet. Smt

for desparm

10.51

1 6 MAY 1968

Fes/u

BY BAG

UNCLASSIFIED

PAS/OMB/MAY '68

Enter

41.81

BRITISH HIGH COMMISSION

CHANAKYAPURI

NEW DELHI-11. (INDIA)

10 May, 1968

Dear Mr Sharland,

Would you please refer to your letter FC 5/4 of 6 May enclosing British passports Nos. D. 242283 & D. 242284 issued to

Mr & Mrs. R.E. Cannings.

These passports were forwarded to London in the bag at the request of the Chartered Bank, Delhi and I enclose a copy of my covering explanatory letter to Mails Branch. The passports have now been returned to the Bank here.

E.J. Sharland, Esq.,

Far Eastern Department, Foreign Office, London, S..1.

Yours sincerely,

محمد

Marian Binen frä

(Miss) M. Binnington Passport Officer

'SNM'

BY BAG

UNCLASSIFIED

PAS/OMB/FEB. '68

COPY

BRITISH HIGH COMMISSION CHANAKYAPURI

NEW DELHI-11. (INDIA)

14 February, 1968

Dear Officer-in-Charge,

I an enclosing under flying seal British passports Nos. D. 242283 and D. 242284 issued in Dacca to Mr. Ronald Ernest Cannings and Mrs. Enid Cannings respectively together with a copy of a letter from the Chartered Bank, Delhi to their Head Office in London. After considering the circumstances of the case we agreed exceptionally to forward these through the bag for onward transmission.

Mr Cannings is at present the Manager of the Amritsar branch of the Chartered Bank but is shortly proceeding on direct transfor to the Shanghai branch of the bank, I have been told by the General Manager that the Chinese Embassy in Delhi to whom applications for vizas were made have been uncooperative in the extreme, have refused to give any information or process the applications in any way. The Chartered Bank Head Office have instructed Delhi to send the passports through the Diplomatic bag. The bank here do not know whether your prior agreement was obtained but presume that, since the passports will have to be returned by the same channels, you were consulted.

If you have no objections I should be grateful if you arrange for the despatch of the passports to the Chartered Bank, London as requested.

Yours sincerely,

The Officer-in-Charge, Inward Bag Room

Kails Branch,

D.S.A.0..

King Charles Street, London, S.W.1.

(Miss) M. Binnington

Passport Officer

*SNK'

F25/4

Seen

Presente

Jou

Enter

DESPATCHED BY

MINISTAR

ST. ·S OFF.CE

9 May, 1988.

The Foreign Secretary has asked me

to reply to your letter of 29 April about the failure of the Chinese to grant an exit visa to your daughter, Kre, Self, and her husband.

I am sorry to say that, so far, our repeated representations to secure exit visas have not met with any response. Mr. Self applied for his visa on 17 May, 1967, and your daughter's most recent application was made on 21 August, 1967. On 27 November, an official of the Hinistry of Foreign Affairs in Peking told Sir Donald Hopson that ho would look into the matter. We received no further news or any reply to a formal note sent to the Ministry of Foreign Affairs on 24 January. ir. Rodgers, Parliamentary Under Secretary of State at the Foreign rice, raised the question with the Chinese Chargé d'Affaires ad interim in London on 5 April, In a formal protest about all the British subjects in difficulties in China. The Counsellor in Peking did so again in Peking on 4 May.

Discussions about visas for our Mission and other British subjects are still going on in Peking. We have reason to hope that the atuation is improving. But it is a slow process,

and I would not like to lead you to believe that any very early progress is likely. I can assure you that we and the Hong Kong & Shanghai Banking Corporation, are doing all that we possibly can to obtain visas for your daughter and son-in-law.

Mrs. E. Squires.

Paddock Cottage,

Church Lane,

Sidlesham,

CHICHESTER.

(G.O. ROBERTS)

NOTHING TO BE WRITTEN IN THIS MARGIN

SEMMIE VERMAA

Registry No.

F25/4.

SECURITY CLASSIFICATION

Top Secret.

Secret.

Confidential

Restricted. Unclassified.

PRIVACY MARKING

DRAFT Letter

To:-

Mrs. E. Squires, Paddock Cottage, Church Lane, Sidlesham,

Chichester,

Type 1 +

From

Mr. Roberta

Telephone No. & Ext.

Department

In Confidence

The Foreign Secretary has asked me to

reply to your letter of 29 Apri] about the

failure of the Chinese to grant an exit visa to

your daughter, Mrs. Self, and her husband.

I am sorry to say that, so far, our

repeated representations to secure exit visas

have not met with any response. Mr. Self

applied for his visa on 17 May, 1967, and your

daughter's most recent application was made on

21 August, 1967. On 27/November, an official

of the Ministry of Foreign Affairs in Peking

told Sir Donald Hopson that he would look into

the matter. We received no further news or

any reply to a formal hote sent to the Ministry

of Foreign Affairs on 24 January. Mr. Rodgers,

Parliamentary Under Secretary of State at the

Foreign Office, raised the question with the

Chinese Chargé d'Affaires ad interia in London

on 5 April, in a formal protest about all the

British subjects in difficulties in China.

infà

The Counsellor in Peking did so again in Peking

on 4 May.

Discussions about visas for our Mission

and other British subjects are still going on

in Peking. We have reason to hope that the

situation is improving. But it is a slow

process, and I would not like to lead you to

believe that any very early progress is likely.

I can assure you that we and the Hong Kong &

/Shanghai

Corporation,

Shanghai Banking Corporation, are doing all

that we possibly can to obtain visas for your

daughter and son-in-law.

LITA /1⁄2

NOTHING TO BE WRITTEN IN THIS MARGIN

RECEIVED IN AKCHIVES No.31 1 C MAY 1968

F25/4

Mr. Arbuthnott

179

RESTRICTED

Flag A

Flag B

KANAGER OF THE HONG KONG AND SHANGHAI BANKING

CORPORATION

The Secretary of State has received a letter from a

Mrs. Squires, mother-in-law of Mr. D. H. Self. My submission

of 21 March covers the background of this case.

2. The question of visas for Bank staff in Shanghai was

last raised when the Counsellor called on the Ministry of

Foreign Affairs on ↳ May. We have so far had no response to

this or to our many previous representations.

3. We have recently received four exit visas for the staff

of our Mission in Peking, as well as four entry visas for replacements; and we have been allowed a consular visit to

Mr. Grey, the Reuters correspondent in Peking. Some improve-

ment in the climate of Sino-British relations is therefore discernible, and we may hope for progress over Mr. Self.

I attach a draft reply.

вати глину James

(James Murray)

9 Mey, 1968

RESTRICTED

F25/4

ALSO ON FC3/3.

COHRIDENTIAL

(679)

and 9 Hong Kong residents of Chinese race whose nationality

is not known. No reply has yet been received from the

Chinese.

15. On 12 Karch Butterfield and Swire, Blue Funnel agoats

in Hong Kong, reported that they had heard from a representative

(of Chinese race) whom they had sent to Shanghai that the

delay was due to a group of officers attempting to obtain

military information, possibly at the instigation of the

company, end that the matter was still under investigation.

Later information suggested that the cutcome of the incident

depended on a suitable confession from those accused, and

that the nato was the principal peraon involved.

16.

sre keeping in touch with the Blue Funnel line,

particularly on the problem of whether or not they should in present circumstances proceed with further sailings to China.

E. Vr. and Kra. ). Self

17. Mr. Self is the Manager of the Shanghai branch of the Hong Kong and Shanghai Banking Corporation. He was due to leave China in Xay last year and duly applied for an exit vica. His successor, Er. Lachlan, has been in Shanghai since before Mr. Self's visa application. The Chinese hold up the visa on the grounds of some irregularity in the Bank's affairs and demanded that kr. Self apologise for "the orimes committed by the Fank since 1949". Further enquiries suggested that the Chinese had in mind some money belonging to 1.0.1. which the Bank passed to our Kission in Peking end which various I.C.I.

/officials

CONFIDENTIAL

officiala visiting China had used to defray their expenses. The remainder of the money was finally used by I.C.I. to help pay for an exhibition they held in Tientsin in September,. 1965. Other cases, involving the payment of War Damage claims for property in China into accounts in Hong Kong were also mentioned. Although we have received no reports of the investigation of "crimes" since July, Er. Self and his wife still await exit visas, in spite of repeated representations

on their behalf.

18. We are in retaliation withholding British entry visas

for two senior officials of the Bank of China in London.

Far Eastern Department,

21 March, 1968.

COFFIDENTIAL

F25/4

Cypher/Cat A

FOREIGN OFFICE TO

Telo. 453

CONFIDENTIAL

PEKING

6 May 1968 (F)

CONFIDENTIAL

Addressed to Peking telegram No, 453 of 6 May.

Repeated for information to Hong Kong.

Your telegram No. 372:

Shanghai Banks.

Visas now issued for Mr. and Mrs. Cannings valid for

entry via Shum Chun for 2 months from 1 May.

will be notified when known.

SOSFA

DEPARTMENTAL DISTRIBUTION

7.0.

F.E.D.

Consular Dept.

E.R.D.

0.0. H.K. Dept.

SSSSS

CONFIDENTIAL

Travel plans

}

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No.

DEPARTMENT

Fcs/4

SECURITY CLASSIFICATION PRIORITY MARKINGS

Top Same

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No.

(Date)

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453

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Saving to...

6 May

KAAM MUI

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(FC 5/4)

DUD

RESTRICTED

FOREIGN OFFICE, S.W.1.

RECEIV ́D IN

ARCHAMP 1:

7-DAY 1968

6 May, 1968.

I enclose herewith the passports of Mr. and Mrs. R. B. Cannings, who are at present on the staff of the Chartered Bank in Amritsar, They are due to be posted to Shanghai. The passports bear visas valid for entry into China via 3hum Chum for two months from 1 May. Also enclosed is a copy of the letter from the New Delhi branch of the Chartered Bank with which the passports were enclosed when they reached the London Office. Neither that office nor this Department have any record of a covering letter from your High Commission.

I should be most grateful if you would pass the passports to the New Delhi branch of the Bank, and if you confirm to me that you have done so. I am sorry to give you this chore, but we wish to take every precaution to see that there are no hitches in Mr. Cannings transfer.

(E. J. Sharland) Par Eastern Department

R. J. Hicks, Keq.,

First Secretary (Consuler),

British High Commission,

KEW DELHI.

RES FAICTED

(FC 5/4)

Din D

1615

FOREIGN OFFICE, 8.N.1.

6 May, 1968.

Thank you for your letter reference WC Staff Department of 2 Way with which you enclosed the passports of Er. and Yrs. R. E. Canr:ings for transmission to New Delhi via the diplomatie bag.

I confirm that I have forwarded the passports to our High Comission in New Delhi, with a request that they be handed to your New Delhi branch.

I should be most grateful if you would, in due course, let me know the expected date of arrival of Er, and Ers. Cannings in China, and later the travel plans of their two children who will be joining them for the summer holidays.

Tə- Staff Manager,

The Chartered Bank, 38 Bishopsgate,

London, 2.0.2.

(K. J. Bharland) Far Eastern Department

INLAND TELEGRAMS CHARTABANK, LONDON, TELEX

FOREIGN TELEGRAMS

INK LONDON-EC2

LEPHONE

01-586

3688

TELEX

HOI

22355/6

RECE THE CHARTERED BANK

ARCHIV+

7- MAY 1968

FC5/4

RCT

INCORPORATED IY ROYAL CHARTER

QUOTE

Staff Department

HEAD OFFICE -

38, BISHOPSGATE

LONDON, E. C. 2

2nd May 1968

The Foreign Office,

Downing Street,

S.W.1.

Attention Mr.Sharland

Dear Sir,

IT - Mrs.R.2.Jenninrs

We refer to our telephone conversation this afternoon and as arranged we enclose the passports of Mr & Mrs.Cannings, which have been endorsed with vises to enable them to enter Shanghai.

We would be grateful if you would kindly arrange for these documents to be forwarded to our branch in New Delhi through the diplomatic bag.

A copy of the letter sent to us by our branch

is enclosed as requested.

We thank you for your assistance in this matter.

妆

Yours faithfully,

де

حسمت مور

Staff Manager.

$419.

FE. Dept for craft oply from Am. Rodgers 15 1/5

Padduck Cottage Sput 290 1965

Church Lane

Sidlesham. Chichislić

Dear Sir

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RECEIVED IN

ARCHIVES No.31

- 3 MAY 1968

FCS/4

千

Cypher/Cat A

PEKING

Telno 5/2

CONFIDENTIAL

FOREIGN OFFICE

2 May 1968

RECEIVED IN ARCHIVES No.31

-2 MAY 1868-

F2514.

Addressed to Foreign Ofrice telegram No. 5/2 of 2 way, Repeated for information to Hong Kong.

Your telegram No. 416: Shanghai Banks.

We told Johnston by telephone today of Canning's visa, and he was naturally delighted. He assumes that Canning is still planning to arrive Shanghai during June. Johnston himself has on our advice already applied for exit visas for himself and wife for 5 July.

2. We still do not know whether Chinese are going to issue exit visas, and we must prevent in Canning's case a repetition of Hong Kong Bank situation in which Lachlan was allowed in but Self not allowed to leave. Self last week applied for exit visas for himself and wife for 6 May and for Croziers for 31 May. If these are issued Johnston will almost certainly get theirs; but if not the Chartered Bank will have to be asked to consider carefully whether Canning should come.

Foreign Office pass Hong Kong 262.

Sir D. Hopson

[Repeated as requested]

D-PARTMENTAL DISTRIBUTION

F.0.

F.E.D.

Consular Dept.

C.O. H.K.Dept.

NNNNN

CONFIDENTIAL

Tel. Set

japans

FC5/4.

CYPHER/CAT A

CONFIDENTI AL

FOREIGN OFFICE TO PEKING

TEL NO.416

29 APRIL 1968 (F)

CONFIDENTIAL

ADDRESSED TO PEKING TELEGRAM NO. 416 OF 29 APRIL REPEATED FOR INFORMATION TO HONGKONG,

MY TELEGRAM NO 277: CHARTERED BANK.

BANK WERE INFORMED TODAY BY CHINESE MISSION THAT VISAS HAD BEEN APPROVED FOR CANNINGS AND WIFE. THEY WILL TRAVEL DIRECT FROM AMRITSAR ABOUT END MAY.

2. BANK ALSO ARE INFORMED THAT VISAS WILL BE AVAILABLE FOR CHILDREN FOR SUMMER HOLIDAYS.

SOSFA

DEPARTMENTAL DISTRIBUTION:

FO: F.E.D.

CONSULAR DEPT

CO: H.K. DEPT

Sadaladala

CONFIDENTI AL

50949

60.000

ARE.W.LIB.

AGEN GOLDE LAN

(GETCHI

NOTHING TO BE WRITTEN IN THIS MARGIN.

Registry No.

Top Secret.

Fcs/4.1

POTEKBENCY INUÉDIATE

PAJORITY

ROUTINE

Confidential,

Resepicted.

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Draft.

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* Date and time (G.M.T.) telegram should

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(Date)...

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priority

2914

05.10./30

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-DEFERRED

[Security classification] -if any

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Addressed to...........

-------

CONFIDENTIAL

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not be OKAN

No.

416

telegram No..........

(Date)

And to:-

29/4

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Nory Mary 438

En Clair. Gode Cypher

Distribution :

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Kamalar Deph

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--------------------------------- intert

..(date).......

HAĻAI UEHARAMSALU probatek dempore---------opiskopskaINTERESANTINIA

repeated for information to........... Mary Kang

Our telegram No 277 [ Chartered Bank]

Wele

Bank Jinformed today by

ท

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Find beingynoved

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Reference; RECEIVED IN

AR FIVES No.31

→0 APR 1968

FE874

ittaff of Position Banter in China.

Quer telynam N° 2ra

& Peking Cradocki

в взрив

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Better to John Benson of 8 Apul and my uply

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that the

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(FC 5/4)

DiD

COFFIDENTIAL

FOREIGN OFFICE, 8.W.1.

25 April, 1968.

SR25/4

Thank you for your letter PEK/5 of 8 April to John Denson about the problems of the British Banks in Shanghai. John is at present in Brussels so that I am replying in his absence.

2. I have spoken to senior representatives of both Banks but have failed to completely clarify the position of either of them. The Bong Kong Bank have confirmed that they have no intention at present of sending any further officers into China until at least one of those at present there has been allowed to leave. They do not intend to withdraw the application for a visa for Robertson but are assuming that if the Chinese are not reminded of it, it will not at this late stage be granted. They may of course have to think again if the Chinese make it plain that they will not allow the Croziers out until a replacement has arrived in China. You will know that the head office of the Bank is in Hong Kong and it is there that a final decision will be taken on whether or not to attempt the closure of the Shanghai office. The London Directors are still unsure of the Bank's position on this issue, but I was assured that they would approach the head office to seek a speedy decision.

3. I explained to the Chartered Bank the difficulties Mr. Canninga may encounter over the question of his children spending their summer holidays with their parents in China, and also your suggestion to Kr. Johnston as to

The Bank the best way to try to arrange the handover. promised to consider both aspects of the problem carefully, but realise that there is still a chance that no visa for Mr. Cannings may be forthcoming I took the opportunity to point out once again that the granting of an entry visa to Cannings is no guarantee of an exit visa for Johnston.

રીદ

(E. J. Sherland) Per Eastern Department

P. Cradock, Esq., C.M.G.,

PEKING.

CONFIDENTIAL...

PER/5

Dean John,

CONFIDENTIAL

RE LIVED IN ART, WYES No.31

7 APR 368

Festa

Please speak to me

Office of the British

Charge d'Affaires,

PEKING.

8 April, 1968

und ofti commiting

both bandes

Bank.

Mr. Shaland

Enter

Preoccupation with other matters has delayed my reply to your letter RC 5/4 of 26 February about the problems of the British banks in Shanghai.

2. In paragraph 5 of that letter you asked for our estimate of how serious would be the risk of adverse Chinese reactions should we press for an entry visa for Cannings of the Chartered Bank (his name is not Cummings, and I regret that this error originated with us) while ignoring that for Robertson of the Hong Kong Bank. My intention in my earlier letter to which you were referring was not to suggest the possibility of anything so strong as an "adverse reaction" on the part of the Chinese, but merely that to press for Cennings' visa alone might make the Chinese suspect that the Hong Kong Bank were thinking of closing before the latter wanted them to suspect it. I made this point to emphasize the need for the banks to keep in close touch with one another. If in due course we are asked to press for Canninge' visa I do not think that we need refuse to do so simply because of uncertainty over Robertson's position, although it would be important to warm the Hong Kong Bank before we approached the Chinese. And I do not think that to apply for Cannings' visa but say nothing about Robertson's would in any way diminish the chances of the Chinese granting one to Cannings.

3. Despite this I think it would be a good thing if the Hong Kong Bank could make up their mind soon what they want to do about Robertson and I hope that, as indicated in your paragraph 3, they will soon be letting us have their views on this. We are concerned about this in relation not only to the Bank's general policy over Shanghai but also to the fate of the Croziers whom Robertson was nominated to succeed. The Croziers have been in China for about three years and should have left in April 1967. They have done very well in Shanghai and by all accounts have show a great deal more resilience than some of their seniors; but they have considerable worries, not least the recurrent sickness of their two-year old daughter. We are most concerned that in their anxiety to get the Selfs out of China the Hong Kong Bank should not forget about the Croziers; and a decision to cancel Robertson's appointment without nominating a replacement might possibly (though not definitely) affect the chances of Crozier getting his exit visa. I hope that the Bank will take this into account.

All this is of course theoretical at the moment since in present circumstances I imagine that there is no chance of even Cannings getting his visa. When eventually we manage to bring the "visa war" to an end I hope that there will be no further

/difficulty

liv

J. B. Denson, Esq., 0.B.B.,

Far Eastern Department.

CONFIDENTIAL

lifficulty over the Chartered Bank vises (but see my next paragraph). There should also be no trouble over the Hong Kong Bank wives. However Crozier's visa may, as I have said, be affected by the question of a replacement, and Self's by the investigation into the Bank's affairs which was under way before last August.

5. Incidentally David Johnston, the present Chartered Bank manager in Shanghai, has written to us recently to ask advice on how best to try and avoid his hand-over to Cannings becoming

I enclose a copy a repetition of the Self-Lachlan situation.

of his letter, and of our reply, which is self-explanatory. are disturbed by Johnson's reference to Cannings' two teen-age children, who "will be joining him for the summer holidays". Admittedly it seems probable at present that by the time Cannings gets his entry visa (whenever that may be) conditions will have returned more or less to normal: but this is not certain. hope it has not been concealed from Cannings that if he and his wife get their entry visas it does not necessarily mean that their children will get them, and that even if the children do get them they may not find the atmosphere all that pleasant.

Yours

Rach

(P. CRADOCK)

CONFIDENTIAL

Office of the British

Chargé d'Affaires,

PEKING.

8 April, 1968.

Thank you for your letter of 27 March asking our advice about applying for your exit visa and the handing over of the Bank's management to Gannings.

In general I think that you would be well advised to stick

There is to the normal procedure as far as possible. certainly no point in trying to seek assurances from the Shanghai authorities that Canning's visa will only be granted if your exit visa is also to be granted within three weeks of his arrival. It might however be a good idea for you to make your application for an exit visa rather earlier than usue 1 in fact immediately, now that Cannings application is in and explain to the local authorities that you are doing this in order to give them plenty of advance warning since the intention is that Mr. Cannings should succeed you and you wish to be able to hand over to him and to leave yourself immediately on his arrival, In this way you will have done all you can to avoid misunder- standing.

If we have any further thoughts on this question we will of course let you have them, I am sure you will not besitate to write to us again on the subject if necessary.

I hope you will have received my manuscript letter which

Te arossed with yours and that you are all still well. shall be interested to bear whether you manage to get to Hangchow for Easter,

D.C. Johnston, Esq., Chartered Bank,

Shanghai.

(A.J. Fhunter)

•

Lavract from letter to A.J, Hunter (Peking) from D.C. Johnston (Chartered Bank, Shanghai) dated 27 March.

When I wrote to you previously it was about the application forme for an entry via for my successor, Ron Cannings and hie wife. These forms have been obtained and the application lodged with the Chinese Legation in London.

I have nor had another letter from him saying that they, Basuring they get their visas, will be arriving here via Hong Kong about the middle of June, and their daughter aged 18 end son aged 15 will be joining them for the summer holidays. Ee doesn't onite seer to have got the message I tried to convey in my first latter to him, but never mind, The purpose of this letter is to ask you what can be done in an endeavour either to prevent them coming in if Elizabeth and I are not going to get èxit permite after the Certificate of Chenge of Management has been lodged or to give ga " reasonable chance of getting exit nermits in the event of the Cannings petting their entry visas, Our procedure in the pest for the out- going officer has been to apply for his exit permit only after the change of asragenent has been approved. Would it help, do you think, if I applied now adding to the application that Cannings is not to be allowed in, unless we are going to get our exit permite within three weeks of his arrival? This of course might lead to Cennings never getting in at all. On the other hand if Cennings added to his application that, if he was given entry, it would be on the understanding only thet I soild leve within three weeks of his arriv¬l, The authorities could then of course hold us up over the change of manazement approval, I do realise that we are entirely in their hands, but if your fertile imagination can come up with some surpestien I shëll be forever grateful,

We are thinking of asking Cannings to apply for accommod-tion in the Pence Hotel, At all events we naturelly wish to prevent a recurrence of what happend to the Selfs,

I have a feeling though that Just to adopt the usual procedure aight pay off best.

The Bank of China very kindly approved our application for closing for Easter within one day and we are now wondering if our aplications to go to Hangchow will be anroved.

יז

FEB/4.

CONFIDENTIAL

Cypher/Cat A

PRIORITY

Telno 277

FOREIGN OFFICE TO PEKING

21 March 1968

(F)

CONFIDENTIAL

Addressed to Peking telegram No. 277 of 21 March. Repeated for information to Hong Kong.

Denson's letter FC 5/4 of 13 March to Cradock; Chartered Bank,

Bank have today applied in London for Chinese Entry Visa for Cummings.

SOSFA

FILES

F.0.

F.E.D.

Consular Dept.

C.O. H.K.D.

CONFIDENTIAL

Registry No.

DEPARTMENT

Fer14

SECURITY CLASSIFICATION

Top Secret

Secret

Confidential

Restricted

Unclassified

In Confidence

PRIORITY MARKINGS

(Date)...

Flash

Immediate }*

Priority

* Date and time (G.M.T.) telegram should--

Despadine

reach addressor(s).

720.

(68

---------¬I

CYPHER

Security classification"

PRIVACY MARKING

[Sec

[

En Clair. Code Cypher

Z | Draft Telegram to:-

NOTHING TO BE WRITTEN IN THIS MARGIN

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if any tion]

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-if any

[Codeword-if any]

Addressed to

telegram No... 272

277

And to

21/3

(Date) repeated for information to

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Saving to..

DENSON

Leking

ILL.

CONFIDENTIAL

(date)

bros MatH++ ----------------|

22. tharch ม

PIR P----‒‒ALIPID

Dory Kong

Denson's letter FC 5/4 of 13 March to

Hong Kong 517

bradock: Charlend Bank.

Saving to:-

in London

Bank have today applied [ for

CUMMINGS.

Chinare Entry Visa for cummings.

Distribution:-

F Comutar Dept. long thong Best

Copies to:-

1340/20/32

Ed (4206)

Reference.......

Denison

RECEIVED IN

ARCHIVES NO.31.

22 MAR 1938

The Chartend Bank have just telephoned

FELT s

to inform

that they

have

applied for

the

Shiner entry visa for

M.. Cummings.

replacement manager for their thaughan brouch.

I attach a

telegram informing Aling

and Hong Kong.

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√2574

CONFIDENTIAL.

FOREIGN OFFICE, 8.#.1.

13 March, 1968.

Thank you for your letter PEK/1 of 26 February in which you reported the impressions of a member of the French Embassy, who recently visited Shanghai.

2. We have infomed the banks of the general situation of their people without giving the source

ituat of our information.

3. The Chartered Bank when we spoke to them con- firmed that they had now obtained Mr. Cumings' pasa- port and so were in a position to ap, ly formally for la visa for him. They have decided, however, that for

the time being no application will be put in. They will inform us when they contemplate further action.

The report of Donald Hopson's talk with Lo Kusi-po unfortunately suggests that we are no nearer to any solution to the problems of the bank staff or indeed anyone elso. without going into details about the latest exchange, we have warned the bank not to expect progress on ŝelf's exit visa in the immediate future.

I am copying this letter to Anthony Elliott in "ong Kong.

P. Cradock Esq., C.N.G....

PRKING.

пе

(J. B. Denson)

__CONFIDENTAL

BENCIE KELMA

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry Fes 14

SECURITY CLASSIFICATION

Top Secret.

Secret

Confidential

Restricted.

Unclassified.

PRIVACY MARKING

In Condence

66.

DRAFT LETTER

Typy 1 +

To:

From

P. Cradock, C.M.G. PEKING.

J.B. Dengon

Telephone No. & Ba,

Department

Copy to:

T.A.K. Elliott,

Hong Kong.

Political Adviser

Withour going

nito Derml's/

peteret me į

Thank you for your letter PEK/1 of

26 February 15/which you reported the impressions

member of the

of a French Embassy official who recently

visited Shanghai.

ghai.

2. We have informed the banks of the general

people

situatigh of their on without giving the

hon wi

source/of our information.

3. When we contested the Chartered Bank

when we spate to them

they confirmed that they had now obtained Mr.

Cummings' passport and so were in a position

tó apply formally for a visa for him. They

have decided, however, that for the time being

no application will be put in. They will

inform us when they contemplate further action. Lafor The repor

The report of Bosind Hipsme talk with Your fatest telegrama suggest that we Lo Vudetto unfortunakin sugu but wer

are no dearer) any solution to the problems of

rerLie

Anyone alsu

the bank staff or indeed of the Mission,

have warned the bank that we de not) expect

progress on

immediate future.

lavors exerlange 5.

Self's exit visa in the

5. I am copying this letter to Anthony

Elliott in Hong Kong.

May

F2674

COVERING CONFIDENTIAL

Reference..

WI ------

Mr. Denso)

"}}

Please see Mr. Cradock's

1. MAR

Ait เป

FCB/4

ber of

26 February to you about the morale of the staff of the banks in Shanghai. I have contacted the banks as you requested and attach a short draft reply from you to Mr. Cradock.

Schadland

(E.J. Sharland) 8 March, 1968

LAST

REF.

KEF.

64 66

Ed (1426)

COVERING CONFIDENTIAL

5 Copy to boundar

(PEK/1)

+) Lati

Dear Joher,

CONFIDENTIAL

4/3

The Sharians Consular Department

·Show see. You mony atto

office of the British in to Speak

Chargé d'Affaires,

PEKING,

26 February, 1968.

malw

Perma to th Brinks-

A member of the French Embassy visited Shanghai recently and on his return provided our first news for some time of the situation in the British Bank community there.

2. He reported that they are generally quite confortable: meat is short and heating in foreigners' buildings is limited to twelve hours a day, but otherwise they have few material difficulties. Their spirits, however, are not high and the wives in particular are tense and more than a little hysterical. The Hong Kong and Shanghai Bank situation, in which there have been two managers since last June sharing a house and even an office desk, seems to be particularly unhappy.

None of this is surprising. Their circumstances are distinctly worse than our own. Shanghai, which is lese pleasant than Peking in the first place, is still in a fair state of ferment; the foreign community is minute and the atmosphere much more oppressive; and because we have no confidential channel of communication with them they have very little idea of developments. It makes it all the more urgent that we should find a solution to their problema,

I am copying this letter to Anthony Elliott in Hong Kong.

Yours wer

livey

(P. CRADOCK)

J. B. Denson, Esq., O.B.E.,

Far Eastern Department.

LASI

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CONFIDENTIAL

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646 (+65)

(FC 5/4)

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لا لا

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A. C. 26/2

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FOREIGN OFFICE, S.V.1.

26 February, 1968.

Thank you for your letter of 12 February about the problems of the British Banks in Shanghai.

We have confirmed that the Banks are still planning on different lines, the Chartered Bank intending to continue in business in Shanghai and the Hongkong Bank considering the closure of their office there when conditions permit. Both Banks have agreed to keep in close touch with us, and with each other. Each is already aware of the other'■ position.

3. The Hongkong Bank are at present undecided about their ultimate position on closure. Their first concern is to get Self out of China, and they would then review the situation. Their London office are enquiring from Head Office in Hong Kong whether they still want Robertson to go to Shanghai. Until we hear from them again, please do not press further for a visa for Robertson.

The Chartered Bank remain anxious to obtain a visa for Cummings. They have obtained application forms from the Chinese Office here, which Cummings has now completed. As soon as his passport arrives from Amritsar the application will be formally submitted. We have explained to them that even when the Chinese intend to issue visas there can be considerable delay, so they will not necessarily expect any action from us to back them up until a month or more after they have submitted the application. They will let us know as soon as they have done so.

5. There is thus no immediate question of pressing for Cummings' visa while ignoring Robertson's. I appreciate that such action could raise Chinese suspicions about the Hongkong Bank's long-term intentions, but consider it more likely that they would regard the lack of thrust behind Robertson's appli- cation as resulting from their failure to grant an exit visa for Self. I should be grateful, however, for your estimate of how serious would be the risk of adverse Chinese reactions should we press for an entry visa for Cummings while ignoring that for Robertson, and whether these would, in any oiroum- stances, be sufficient to make it necessary to consider declining to assist the Chartered Bank in Cummings' case.

6. I am sending a copy of this letter to Anthony Elliott in Hong Jong.

P. Cradock, Esq., C.M.G.,

Peking.

(J. B. Denson)

CONFIDENTIAL

p.a.

Ed (1636)

Flag A

621

Kr. Denson

CONFIDENTIAL

Reference.....

FC5/4.0 62.

Please see Mr. Cradock's letter of

12 February.

I have discussed their positions with the two Banks. The Chartered Bank are anxious to obtain an entry visa for Cummings, but the Hongkong Bank (whose Head Office is, of course, in Hongkong) are undecided about their position. Mr. Stewart, to whom I spoke, confirmed that they wish to treat the two questions of Self's exit visa and the Bank's closure separately, but was uncertain that closure was now the ultimate aim. He will contact his Head Office and let us know. Meanwhile we should not press for Robertson's entry visa.

3. I attach a draft letter explaining the position to Peking, and seeking their estimation of the danger of Chinese hostility towards the Hongkong Bank should we press for an entry visa for Cummings while allowing Robertson's applica- tion to remain dormant.

F Mhailand

(E. J. Sharland) 23 February, 1968

2012

CONFIDENTIAL

Enter

CONFIDENTIAL

Please speak

49.

bean Johar,

Office of the British Charge

d'Affaires,

No 31

Peking.

► Lb 1968

TOP

Feb14

бо

Mir Sharland

12 February, 1968. We gestu.

Thank you for your letter FC 5/4 of 23 January about the Chartered Bank's plans for replacing David Johnston in Shanghai

2. We are slightly concerned at the fact that the two British banks operating in Shanghai are planning on entirely different lines, i.e. that the Hong Kong and Shanghai Bank have stated their intention of closing down their Shanghai branch as soon as the moment seems ripe (your telegram No. 1003 of 22 November), while the Chartered Bank according to your letter wish to continue in business there. There are may mbalasanit be further difficult negotiations ahead before we obtain the release (and, where appropriate, the replacement) of the bank personnel now in Shanghai, and it would strengthen our arm and theirs if they were able to present a common policy and a united front. Both banks no doubt have good reasons for their decisions. But I think it essential for us to make sure that at least each bank is aware of the other's decision and that they keep in close touch about subsequent developments with each other as well as with H.M.G.

3. One example of the kind of situation where this would help is that we may in due course have to press for an entry visa for Cummings of the Chartered Bank to replace Johnston. If so, we ought preferably to have decided with the Hong Kong and Shanghai Bank whether or not we should press simultaneously for an entry visa for Robertson, whose application for a visa to relieve Crozier has been outstanding since December, 1966. To agitate about Cumminge while making no mention of Robertson might conceivably raise suspicions in the minds of the Chinese about the Hong Kong and Shanghai Bank's intentions.

I am sending a copy of this letter, with one of yours, to Anthony Elliott in Hong Kong.

J. B. Denson, Esq., 0.B.E.

Far Eastern Department,

Foreign Office,

London 5.W.1.

Yours wer

Aven

(P. Cradock)

CONFIDENTIAL

UNCLASSIFIED

Far Eastern Department,

Foreign Office, S.W.1.

With the compliments of

THE OFFICE OF

THE BRITISH CHARGÉ D'AFFAIRES

The Sharlen ідейну

p:༤. op.c

PEKING

24 January, 1968

ساده

e. Wil

(This Note was delivered to MFA on

the day after Mr. Cradock's interview with Consular Dept., :. e. 25 January

of.).

RECEIVED IN

*VES No 31

F28/4

The office of the British Chargé d'Affaires present

their compliments to the Consular Department of the Ministry

of Foreign Affairs of the People's Republic of China, and

have the honour to refer to the case of Mr. D. N. H. 8elf,

Manager of the Shanghai branch of the Hong Kong and Shanghai

Banking Corporation. Kr. Self's application for a visa

to leave China, submitted on the 17th of May, 1967, and

his wife's similar application, which ma last submitted

on the 21st of August, 1967, have not yet been granted,

despite the fact that Kr, 8elf's successor arrived in

Shanghai in June,

Er. Higuch, the Deputy Director of the West European

Department of the Ministry, said at a meeting with the

British Chargé d'Affaires on the 27th of November, 1967,

that he would enquire about the case of Ir, and Mira, Belf.

The Office would be grateful to know if the Hinistry are

yet able to inform them of the situation with regard to

Mr. and Mrs. Self'e sxit visas.

The Office of the British Chargé d'Affaires avail

themselves of this apportmity to renew to Consular Departaent

of the Ministry of Foreign Affairs of the People's Republic

of China the assurance of their highest consideration.

The Office of the British Chargé d'Affaires,

PRKINO.

24 January, 1968.

(FC 5/4)

CONFIDENTIAL

FOREIGN OFFICE, S.W.1.

23 January, 1968.

CHARTERED BANK: SHANGHAI

Thank you for your letter PEK/1 of ↳ January about the difficulties being encountered by the Chartered Bank over obtaining an entry visa for a replacement for David Johnston.

have informed the Bank of your action and explained that we are delaying the issue of visas to staff of the Bank of China who are due to come to London. We also warned them that, even if Cummings manages to take over in Shanghai, there is no guarantee that the Chinese would allow Johnston to leave. The Bank's view is that, since they wish to continue in business in Shanghai, they have no option but to try to proceed with the change-over as planned. They will accordingly apply for an entry visa for Cunnings in London if your démarche produces no result in Peking or Indía, If the visa is granted they will apply for an exit visa for David Johnston, to be effective a few days after Cummings' arrival in Shanghai. will keep you informed of any developments.

P. Cradock, Esq., C.M.G.,

PERING.

(J. B. Denson) Far Eastern Department

CUAFIDENTIAL

234,

Desp. in Regy 2311/0

Paffey,

WOOL SUNR

NOTHING TO BE WRITTEN IN THIS MAPZIN

CONFIDENTIAL

Registry TO.

3 5/4

DRAFT

Letter

Type 1+

SECURITY CLASSIFICATION

To:-

Top Secret

Secret.

P. Cradock Esq., C.M.G., Peking.

From

J. B. Denson

Telephone No. & Ext.

Con l'ential EJS

Restricted.

19/1

Unclassifed.

VACY MARKING

Flag A

THE 724.

Department

F.E.

CHARTERED BANK: SHANGHAI

Thank you for your letter FEE/1 of 4

Januar: about the difficulties being encountered

by the Chartered Bank over obtaining an entry

visa for a replacement for David Johnston.

mformið

We have not

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your actioptin-suspert of their offert

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Cummings manges to take over in Shanghai, there

is no guarantee that the Chinese would allow

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since they wish to continue in business in

Shanghai, they have no option but to try to

procee

accord Hagley

will apply

the change-over as planned. They

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CHARTERED BANK: SHANGHAI

Please see Mr. Cradock's letter of 4 January.

I have spoken to Mr. Arthur of the Chartered Bank and attach a self-explanatory reply from you to Mr. Cradock.

Esthailand

८

(E. J. Sharland 19 January, 1968

Draft Yo issue.

вс

fun

227;

PEK/

Lecar Johor,

RESTRICTED

Enter.

Office of the British Chargé d'Affaires,

PEKING.

4 January, #5GBIVED IN

ARCHIVES N➜.31

1 8 JAN 1953

FC6/4

I enclose a copy of a letter we have received from David Johnston, the Chartered Bank Manager in Shanghai, about his successor's difficulties in obtaining an entry visa. We have passed his request on to the Foreign Ministry in a Note, but not surprisingly have not yet: received a reply.

2. There seems nothing more to be done at the moment: it is most unlikely that the Chinese will react to this or to the Hong Kong and Shanghai Bank's applications for visas until our quarrel with them about diplomatic exit visas is resolved. If you are not already in touch with the Chartered Bank in London, you might like to consider doing-ee-and warning them about the difficulties that may arise over the proposed change-over.

neem

Yam

lincy

J. B. Denson, Esq., 0.B.E.,

Far Eastern Department.

(P. CRADOCK)

Mr. Sharland

This crossed 4.0. relegiam

No. 38 about visas for the

Bank of China. Please

Quran @

Speaks to

Chartered

Bank.

o dragy reply.

المعاملات

Fes/u.w(59)

COPY

No. 203

13th December, 1967.

Office of the British Chargé d'Affaires,

5, Kuang Hua Lu,

Peking.

Dear Sire,

We wish to advise you that it has been arranged for Mr. D. C. Johnston to be relieved of his duties as manager of The Chartered Bank, Shanghai about July next year. His relier, Mr. R. E. Cannings is at present in Amritsar and applied on 6th October to the Chinese Legation in Delhi through our New Delhi office for entry visas for himself and Mrs. Cannings. Our New Delhi office telephoned the Legation on 23rd October, when they were informed that they were unable to give any indication when they could expect to get the application forms. Enquiries have been made weekly since then, but our New Delhi office have merely been told that the matter has been referred to Peking.

It is possible that by now our New Delhi office will have received the application forms. However we should be most grateful if you would kindly contact the Chinese Foreign Office at your discretion and endeavour to expedite the issue of the application forms. Alternatively, if the forms can be obtained in Peking, they could be forwarded by us to our Amritsar office direct.

Yours faithfully,

Manager.

J. Murray, Esq., C.M.G., Far Eastern Department.

To Shutart

ہے؟

With the compliments of

THE OFFICE OF

THE BRITISH CHARGÉ D'AFFAIRES

(T. Peters)

PEKING

30 November, 1967

CONFIDENTIAL

Res14

office of the British

Charge d'Affaires,

PEKING.

30 November, 1967

I am sorry about the muddle over the enclosure to my letter of 7`October about the Hong Kong Bank which you reported in your letter of 15 November to me. Since our whole office was in Ray Whitney's flat at the time and my own share of it was a corner of a sofa, you will understand how this came about.

am sure that the Foreign Office will have 1

returned the enclosure to you by now.

RECEIVED IN BARCHIVES No.31

1 DEC 1967

FFC5/4

2. In the meantime you will have seen from Foreign Office telegram No. 1027 of 27 November, to us that the Hong Kong Bank will be reconsider- ing their plans for closing the Shanghai office just at present.

am sending a copy of this letter to Murray in Far Eastern Department.

We have.

A. Q.

11/12 FZ25/453

(T. Peters)

Elliott, Esq., nial Secretariat,

g Kong.

CONFIDENTIAL

F25/4.

CYPHER/CAT A

N12=-Folios (54)-(57)

TRANS. TO FE24/4 22)

CONFIDENTIAL

FOREIGN OFFICE TO PEKING

TELA

1027 27 November 1967

(FED)

TOP COPY

CONFIDENTIAL.

ADDRESSED TO PEKING TEL NO 1927 OF 27 NOVEMBER REPEATED FOR INFORMATION TO HONG KONG,

YOUR TELEGRAM NO 267 : HONG KONG AND SHANGHAI BANK.

DE LA MARE SAW STEWART, THE GENERAL MANAGER OF THE LONDON OFFICE THIS MORNING AND PUT THE POINTS IN PARAGRAPH 1 OF YOUR TELEGRAM UNDER REFERENCE. STEWART ACCEPTED THEM AND INDICATED THAT, IN PRESENT CIRCUMSTANCES, THEIR CONCERN FOR SELF'S WELFARE TOOK PRIORITY OVER THE QUESTION OF CLOSURE. HE WOULD THEREFORE TELEGRAPH

TO HONG KONG RECOMMENDING THAT THE PROPOSED LETTER TO THE CHINESE

SHOULD NOT BE SENT. WE AGREED THAT THE SITUATION COULD BE REVIEWED

IN THE LIGHT OF ANY IMPROVEMENT IN SINO-BRITISH RELATIONS WHICH

MIGHT TAKE PLACE OVER THE COMING MONTHS.

2. THE MOST WELCOME NEWS GIVEN IN YOUR TELEGRAM NO 272 MAY ALSO

HELP IN THIS CONNECTION.

SOSFA

DEPARTMENTAL DISTRIBUTION

F.O. F.E.D.

C.O. HONG KONG DEPT.

F.E.P.D.

il, Sharlad

p.a.

FC 3/3 (181)

CONFIDENTIAL

1622

پو گردن

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No. FC

DEPARTMENT

FC 574.

PRIORITY MARKINGS

SECURITY CLASSIFICATION

Top Secret

fecret

Confidential

Restricted

Anclavelled.

•

Jomediese d -Priority- Routine

~Date)

• Date and time (G.M.T.) telegram should reach addressee(s)

Despatched

0 235

----------ndanovske HR+Akosten÷mul. ---------------

TER

CONFIDENTIAL

--------------HAHHAHAHdakladacium----------||

PRIVACY MARKING

In Confidence

"Security classification" -if any

[Secu

Ert.

[

Privacy marking --if any

]

Lode

Cypher

Draft Telegram to:-

PEKING

PEE

No.

(Date)

And to:-

1027

27/11

[Codeword-if any).

Addressed to

telegram No.....

And to

ILJI

Peking

------------

FULL..

1027 (date)

------

I LINZ 1

repeated for information to......

Hong Kong

Saving to.....

12 ...

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37/11

N-IIJLOOIJ `----` -------

PILLOL LLOJI

-----

-----|| ---

Repeat to

HÃNG XONG

2419

Saving to:-

Distribution:-

Departmental

P.E.D.

0.0:

H.K.D. F.E.P.D.

Copies to:-

Bank.

Your telegram No. 267: Hong Kong and Shanghai

de la Mare saw Stewart, the General Manager of

the London office, this morning and put the points

in paragraph 1 of your telegram under reference.

indicated

Stewart accepted them and eaid that, in present circumstances, their concern for Self's welfare

You be

biguity over

spektent than the question of closure.

Alcomm and in "

He would therefore telegraph to Hong Kong/ inevi

that no topo le not

пров

рибрал teken on sending the A

letter to the Chinese) Ve agreed that the situation

could be reviewed in the light of any, improvement

in Sino-British relations which might take place

over the coming months.

2 The most welcome news

Given dom Denson belts in this connection.

held

in your telepam No 272 may also

た

27/4

Cypher/Cat A

CONFIDENTIAL

FAMEDIA TE PEKING TO FOREIGN OFFICE

Telno 273

27 November 1967

*# IN

ARCHIVUS No.31

2 € NOV 1967

FC574

CONFIDENTIAL

Addressed to Foreign Office telegram No. 273 of 27 November. Repeated for information to Hong Kong, Washington, POLAD Singapore.

My immediately preceding telegram.

I then raised with Mr. Hsueh the cases of several British subjects who were in trouble in China. I referred to Mr. and Mrs. Fels in Shanghai for whom the issue of exit visas had been delayed

FC3/21.

for months, to Mr. Grey unofficial representative Reuters who had been under house arrest for 4 months and incommunicado for 3 rano to "r, hatt who was detained in Lanchow and about whom we

had asked for information and for Consular access. I enquired whether he could give me any news about these cases.

2. Mr. Hsueh said in reply that his communication concerned only staff of British offices in China and did not apply to other British subjects. He promised to enquire about Mr. and Mrs. Self and said that we could expect some information soon about kr. Yatt. On the subject of kr. Grey he said we had been informed by Newe Department of Ministry of Foreign Affairs that access to him could not be granted until officials of N.C.N.A. were allowed to visit N.C.N.A. prisoners in Hong Kong. I pointed out that N.C.N.A. officials had in fact been allowed to visit Mr. Hauch Ping and that we had informed News Department to this effect. Mr. Hsueh said that he had not received a report on this matter but promised to look into it.

I shall be grateful if Hong Kong would send by immediate telegram details of visits with dates and if possible names of N.C.N.A. officials who have been allowed access to Hauch Ping. I would then propose to send this in writing to kinistry of Foreign Affairs.

Foreign Office pass to Hong Kong 125, Washington 29 and PULAD Singapore 29.

FC13/8.

Mr. Hopson

FO/CO/WH. DISTRIBUTION

F.E.D.

HMEER

[Repeated as requested!

CONFIDENTIAL

ADVANCE COPIES SENT

Original Copy on F£313 (27 Copy also on F2 13/8 62

and FC 3/21

(82)

CONFIDERITI AL

CYPHER/CAT A

IMMEDIATE PEKING TO FOREIGN OFFICE

elo 267

CONFIDENTIAL

TOP C

RECEIVED IN

ARCHIVES No.31

27NOV 1967

24 November 1967

Now see /53

Feb 4

разли

Addressed to Foreign urtice telegram No.267 of 24 November. Repeated for information to Hong Kon

(2+1)

Your telegram No.1003: Hong Kong and Shanghai Bank.

Following are my detailed comments on paragraph 2 of your telegram under reference:-

(a)

(b)

(c)

હ

(d)

Although I think that self's detention in Shanghai was initially on account of alleged technical breaches of Chinese laws by the Bank, delay in granting an exit visa to nim ahd his wire has now become political and is probably bound up with the difficulties being experienced by this mission and British subjects generally.

The Chinese may be Less keen on using sterling as a reserve currency after the recent devaluation but I agree that it will be some time before the Chinese will allow all bank officials to leave Shanghai.

I think it quite possible that the stair of the bank in Shanghai would be as far as possible under nouse arrest or nave their movements severely restricted if the Bank announced their intention or closing at present. There are one British and two German engineers at present under some rorm or arrest in Chine as well as rive Japanese businessmen.

I fully agree that no one in china will make a decision on an application to close at present.

Furthermore the Chinese would certainly see the move as having political implications, and as conilicting with the line I took in my interview of 14 November and would be left bartled and suspicious about our general intentions. The move at the present time would therefore not only do the Bank no good but might also reduce the chances of improving the situation of this mission and, as a consequence, of British subjects generally. I therefore strongly recommend that the Bank be asked to postpone their decision at least until I see now the lifting ɗ movement_restrictions affects the political climate and until we are clearer about Sino/British relations in general. 3. To sum up I think it essential that the Hong Kong Bank should carry on as normal for at least several more montus. The best hope for the release of self and nis wire is as a consequence of normalized diplomatic relations; but if this

/ hope

CONFIDENTIAL

CONFIDENTI AL

Peking telegram No. 267 to Foreign Orrice

-2-

hope is not fulfilled we could look at the situation again.

I also hope that the Hong Kong bank will take the Chartered Bank into their confidence. If the Hong Kong Bank did decide

to pull out this would leave the Chartered very isolated and they might prefer to take similar action.

in that case they would be wise to do so.

Foreign Office pass Priority Hong Kong 123.

Mr. Hopson

[Repeated as requested]

Indeed I think

DEPARTMENTAL DISTRIBUTION

ADVANCE COPIES SENT

F.0.

F.E.D.

C.0.

H.K.D.

VVVVV

F.E.P.D.

CONFIDENTIAL

PLEASE NOTE OUR NEW TELEPHONE NUMBER: 01-623-4365

Fard (50)

The Hongkong and Shanghai Banking Corporation.

RECEIVED IN

ARCHIVES No.31

24 NOV 1967

(INCORPORATED IN HONG KONG WITH LIMITED LIABILITY]

4. Gracechurch Street.

London, E.C.3.

21st November, 1967.

Best Arther, FE5/4

Dear

I have been asked by my Head Office to consult you about the somewhat difficult problem of our Shanghai Office, coupled with getting Self out of China.

It seems to me that the best thing I can do is to forward you the letter I have received from Hong Kong and after you have studied it, perhaps you will give me a ring and if you wish I shall naturally be pleased to come and call

on you.

The letter is attached and I think it should be quite clear to you, but I would just add that H. J. Shen is a respected Chinese whom we recruited some years ago to our Management in Hong Kong Office.

Shen is very well-known

His

in Hong Kong and Taiwan circles and no doubt, like everybody else, does a good deal of China listening in Hong Kong. reservations about the course of action my Head Office propose are, as you see, fairly strong.

I should be grateful for any advice you could give we on this matter.

Laft lelegram facittad / Jours pincerely, in secry i'r Stewart of/11 on Thunday.

об

A. J. de 1 Mare, Esq.,

Foreign Office,

тел

London, S.W.1.

Gurse

вни

(G. OP. Stewart

Tel to Peking part Com

dec

Са

22 M

[

S/0

11 SH1967

THE HONGKONG AND SHANGHAI BANKING CORPORATION

PRIVATE AND. CONFIDENTIAL

HEAD OFFICE.. 15th November,.-19.67.

var

y dear Stewart,

I refer to the Chief Manager's private and confidential

letter of 3rd November.

SHANGHAI OFFICE

We have now received Self's private letter of 30th October in which he stated that it was quite likely the

Chinese authorities would be glad to see us close but that

they would not make it easy for us and that our approach

must be put in such a way that it could not be ignored.

We are now examining ways and means of doing this and

we consider that the present political situation between

Hong Kong and Peking is such that it would be unwise for

Head Office to attempt to initiate closure from here. We

think therefore this should be done in London and we have

in mind sending a letter to you signed by the Chairman and

Chief Manager addressed to the Minister of Finance in Peking

for forwarding through diplomatic channels if this can be

arranged.

attached.

A draft of the form of letter we would send is

We also think it would be advantageous to arrange

for a copy to be delivered to the Commercial Counsellor or

/cont'd...

THE HONGKONG AND SHANGHAI BANKING CORPORATION

HEAD OFFICE........

(2)

19......

his equivalent at the office of the Chinese Chargé d'Affaires

This copy

in London under a covering letter from yourself.

would we hope be passed on to Peking and our intentions thus

be made known in the event of the British diplomatic authorities

not being able to take early action. You would then advise

Self by semi-official letter of the action you had taken

enclosing a further copy of the letter for his reference.

However, before we go ahead on the lines indicated,

we would like you to consult with de la Mare and obtain his

views on our proposals and also any reactions he may now have

on our decision to close down. In this respect H.J. Shen

when consulted expressed strong reservations about the wisdom

of closure at this stage his main reasons being as follows:-

1) He feels that Self's detention is now a political

matter and the application to close our Shanghai

Office could be construed by the Chinese Government

as the first move towards H.M.G. breaking off relations

with China.

As China is barred from keeping US dollar balances

she uses sterling principally as her reserve currency,

and, should further untoward incidents occur, it is

possible she will feel that the Bank of England might

consider blocking her sterling balances. Shen feels,

therefore, that should such a situation arise the

/cont'à.

THE HONGKONG AND SHANGHAI BANKING CORPORATION

(3)

HEAD OFFICE......

fact that China has British nationals for use as

hostages would be of considerable value to her in the

subsequent negotiations, and, for this reason, considers

it unlikely that the Chinese authorities will permit

us to reduce our normal Foreign Staff complement of two.

He feels that although our Foreign Staff have not to

date been molested in any way, if we take this step

conditions might deteriorate for them.

He feels that in view of the situation in China at

present no-one would make a decision one way or the

other on our application.

Shen has expressed his views sufficiently strongly that

we must obviously give them very serious consideration and we

would like de la Mare to be made fully aware of them during

your discussions.

As a matter of courtesy the Chief Manager has advised

the Governor of our desire to close down in Shanghai and

Elliott, Political Adviser to the Hong Kong Government, has

been provisionally briefed by us on the method of approach

we have in mind.

We are naturally anxious to get things moving and would

/cont'd.

THE HONGKONG AND SHANGHAI BANKING CORPORATION

(4)

HEAD OFFICE.......

like you to let us know the result of your discussions

with de la Mare as soon as possible.

Yours very truly,

19......

G. O. W. Stewart Esq., LONDON.

[

inister of Finance,

eople's Republic of China, PEKING, China.

Dear Sir,

DRAFT

RCG/var

OUR SHANGHAI OFFICE

We have had under consideration for some time the

position of our office in Shanghai and our Board of

Directors have now reluctantly come to the conclusion that

we should initiate action to close down in that city as

soon as can be arranged. In arriving at this decision

we have been influenced by a number of factors, not the

least of which is the difficulty we have recently

encountered over obtaining exit visas for our staff.

This is not to imply any cessation on our part of

financing the trade of China, which we shall continue to

do from London and from our other branches outside China.

The object of this letter therefore is to obtain your

formal approval for the liquidation of our business in

Shanghai and for the authority for visas to be issued

for our British staff to leave China as soon as can be

arranged. In this respect we would request that

Mr. and Mrs. D.N.H. Self, our present manager and his wife,

whose replacement arrived in Shanghai as long ago as

14th May, should be granted exit visas and permission

be given for his replacement, Mr. D.G. Lachlan, to assume

the managership during the period of liquidation.

would add that in the past we have always had the closest

co-operation from the People's Republic of China in arranging

reliefs for managers and our other British staff and

obtaining exit visas for them within a short period of the

time of arrival of their replacements.

/cont'd

(2)

Once we receive your formal approval for closure

the necessary arrangements will be put into force as

soon as possible. We do not anticipate that it will

require the retention in Shanghai of our normal complement

of two British staff to handle the necessary closing down

formalities and in addition to authorising exit visas

for our present manager and his wife, we would therefore

request that visas also be issued to Mr. and Mrs. T.R.K.

Crozier and family, leaving Mr. Self's replacement,

Mr. D. G. Lachlan, to handle the final closure it being

understood that an exit visa for Mr. Lachlan would be

forthcoming when all matters have been finalised.

It would be appreciated if this application could

be given early consideration to enable us to put in train

the necessary arrangements.

Yours faithfully,

J. A. H. Saunders

Chairman and

Chief Manager.

CYPHER/CAT A

Fes/4.

TOP COPY

CONFIDENTI AL

IMN JIATE FOREIGN OFFICE TO PEKING

TELNO 1003

22 NOVEMBER, 1967

(FED)

See - 51

pa lue

CONFIDENTIAL.

ADDSD TO PEKING TELNO 1893 OF 22 NOVEMBER REPEATED FOR INFORMATION TO HONG KONG.

HONG KONG AND SHANGHAI BANK,

BANK HAVE ASKED OUR ADVICE ABOUT MOVES THEY WISH TO MAKE TO CLOSE THEIR BRANCH IN SHANGHAI. THEY PROPOSE TO ASK US TO FORWARD THROUGH DIPLOMATIC CHANNELS A LETTER TO MINISTER OF FINANCE SAYING THEY INTEND TO CLOSE AND SEEKING COOPERATION IN THIS AND ISSUE OF EXIT VISAS FOR STAFF. ALL STAFF WOULD BE WITH DRAWN IMMEDIATELY

WITH THE EXCEPTION OF LACHLAN WHO WOULD HANDLE CLOSURE. COPIES OF LETTER WOULD BE SENT TO CHINESE OFFICE HERE AND TO SELF.

2. ONE OF THEIR TRUSTED CHINESE ADVISERS IS STRONGLY AGAINST THIS

ACTION FOR THE FOLLOWING REASONS:

(A) SELF'S DETENTION IS POLITICAL AND ATTEMPT TO CLOSE SHANGHAI BRANCH WOULD BE SEEN AS FIRST MOVE TOWARDS BREAKING DIPLOMATIC RELATIONS

(B) CHINA USES STERLING AS RESERVE CURRENCY AND FEARS BLOCKING OF STERLING ACCOUNT FOR POLITICAL REASONS, HOSTAGES ARE THEREFORE IMPORTANT AND CHINA IS UNLIKELY TO ALLOW ALL BANK OFFICIALS TO LEAVE.

(D) IN PRESENT SITUATION IN CHINA, NO-ONE WILL MAKE A DECISION ON APPLICATION TO CLOSE.

3. WE SEE FORCE IN ARGUMENTS AT (B) AND (D) BUT LESS IN (A) AND (C). GRATEFUL TO HAVE YOUR VIEWS ON ALL THE ABOVE AND ANY ADDITIONAL POINTS YOU THINK SHOULD BE CONSIDERED, BY 25 NOVEMBER.

SOSPA

DEPARTMENT AL DISTRIBUTION

F.0.

FAR EASTERN DEPT.

C.0. HONG KONG DEPT.

F.E. & P.D.

CONFIDENTIAL

[

Registry No. F4

DEPARTMENT

Far Eastern Dept

SECURITY CLASSIFICATION

Fog Secret

SeEred

Confidential

Laffassified

PRIORITY MARKINGS

(Date).

Flash. Immediate

469

......................`LLJJILLOJJILOKALLILLEH

• Date and time (G.M.T.) telegram should

reach addressee(s)

.|-|-|

22/11

1550

NOTHING TO BE WRITTEN IN THIS MARGIN

22/14/16-

PRIVACY MARKING

In-Confidence

[Security classification]

-if any

En Clair. Cada

[

Privacy marking -if any

Cypher

Draft Telegram to:-

No.

PEKING

(Date)

1003...

---

And to:-

22/1.

[Codeword-if any]

]

Addressed to PEKING

telegram No.

And to...

------

...

1003

CONFIDENTIAL.

(date)

22 November 1967-

repeated for information to... HONG KONG........

Repeat to:- for info.

Hong Kong 2385

Saving to:-

Distribution:-

Departmental

Far Eastern

Hong Kong Dep.

Copies to:-

----

Saving to

Hong Kong and Shanghai Bank

Bank have asked our advice about moves they

wish to make to close their Branch in Shanghai. They propose to ask us to forward through diplomatic

channels a letter to Minister of Finance saying

they intend to close and seeking cooperation in this

and issue of exit visas for staff. All staff would

Withrown

be ented immediately with the exception of

Lachlan who would handle closure. Copies of letter

would be sent to Chinese Office here and to Self.

2. One of their trusted Chinese advisers edvines is

strongly against this action for the following

reasons:

(a) Self's detention is political and attempt

Branch

to close Shanghai Boule would be seen as

first move towards breaking diplomatic

ملتا ہے۔

Densm

भ्र

relations;

(b)

D4.32855 BA (4200)

NOTHING TO BE WRITTEN IN THIS MARGIN

(b) China uses sterling as ✯ reserve

currency and fears blocking of

sterling account for political

reasons.

Hostages are therefore

important and China is unlikely to

allow all Bank officials to leave.

been molested, this situation might

change if closure were an:.ounced;

(a) In present situation in China, no-one

will make a decision on application

to close.

3. We see force in arguments at (b) and (a)

but less in (a) and (c). Grateful to have your

views on all the above, and any additional

points you think should be considered, by 25

November.

Departmental

dist.

22/4

M. Marland

With the Compliments of the

Political Adviser

Hang Trong

Pse-speak

し

Entu

BCR 1/1167/55 VI

CONFIDENTIAL

? Nov.

letter

November 15th, 1967.

१५.

JFD IN

No 31

1967

Thank you for your

Ostober 7th about the

Hongkong Bank in Shanghai. I am afraid that I did not get the top copy of the letter nor the chit; I expect they went to London by mistake.

I have passed on your message to Jake Saunders.

I now learn from the Bank that they wish to take active steps as soon as possible to close their branch in Shanghai. Their present intention, subject to the views of Far Eastern Department, is to inform the Chinese Charge d'Affaires' Office in London of what they have in mind. I have pointed out that there are riske that this line of action would in fact encourage the Chinese to think of new obstacles which they could place in the way of the departure of their staff. But, in the long run, if it is really their settled plan to close their Shanghai office, they will obviously have to let the Chinese know of their plan through one channel or another. Perhaps the present is as good a moment for broaching the idea as any.

I am sending a copy of this letter to James Murray in Far Eastern Department.

Now see 749

T. Peters, Esq., C.K.G.,

Office or R.M. Charge d'Affaires, PNKING.

(T.A.K. Kliott)

}

CONFIDENTIAL

Saundan)

Mr De

17 Nor

Mr Shank 29.

Shoul

Way Scar: Anthony,

Office of the British

Chargé d'AffaireLVED IN

¡ARCHIVES No 3'

PEKING

7 Roseber, 1967.-

Norimber

21 NOV 1967 · 1

FC574

Our Danish colleague was able to give self of the Hong Kong Bank in Shanghai a manuscript letter of mine giving him the information in the enclosures to your letter SCR 1/1167/55 VI of 4 October to Donald Hopson. The colleague was able to have a chat with Self and the.

other two members of the Bank there and, if nothing else, I think this chance of a chat with someone outside the now tiny Shanghai circle of foreigners was a great help to them all.

Our Danish colleague brought back with him the enclosed chit which is obviously for Jake Saunders at the Bank and will, I hope, make sense to him.

3. Since it is absolutely assential to keep this channel of communication confidential I should be grateful if you would remind SFF that he should not refer to Self's message of 30 October in any open letters or telegrams, either back to Shanghai or to London. Perhaps you would be kind enough to ask him to destroy the message when he has finished with it.

We were very lucky to find someone who was prepared to carry messages and we will always do what we can. However it is very difficult to do this and opportunities do not often arise.

I am sending a copy of this letter without enclosure to James Kurray in Far Easterni Department and have noted that he would only want us to use the Poles for messages as a last resort.

T. A. K. Elliott, Esq.,

HONG YONG.

しし

PETERS)

peke

(Note. The

have b

before

orig. was sent have mirale - so it was passed

be in forwarded, i b=?

در

AC.

CONFIDENTIAL

25.10.67.

Thank you for your letter of 19th October.

We would much prefer not to commit our opinions to paper and suggest that you first make a direct approach to the Head Office of the Bank of China and try to get their reactions. use Sterling.

They still

There are no banking problems involved and our half-yearly reciprocity figures business with correspondents) should give you all the paakizmax information you might need,

We are not at all happy about the possible effects on our personal prospects and it is most unfortunate that there are three officers here. However, we are all agreed that the time to face realities is considerably overdue.

30.10.67.

Further to my chit of 25th, it seems that one or two comments are indicated after all.

As you know, it was for several years until the mid fifties

I have the our firm policy to close as soon as possible. impression that when it was decided to continue, the persons concerned on both sides had pretty hazy ideas about our future role. Anyway hostages were needed until the settlement of the foreign currency liabilities question and the idea has evidently not been eliminated. My point is that in the event, we have never been of any other value to China unless you count a lac or two of Sterling at inter-branch rates and the collection of bills in London. Perhaps they thought our connections and influence might be useful with their own overseas banking operations. Our present overheads are about JMP 150,000 per annum but it costs London Office quite a bit to collect our bills under other banks' credits.

I am almost sure that we would not be permitted to continue in business without British staff. If we could get the same sort of treatment as Air France and P.I.A., it might be worth holding on for a while in the hope of better days but this probably depends mostly on Hong Kong politics. It is quite likely that they would be glad to see us close but this does not mean that it will be easy. Our approach must be put in such a way that it cannot be ignored. If you decide to take the plunge, we hope that GOW will be able to rally some support. I am grateful that you have given my personal position so much attention but I think that this should no longer be taken into con- sideration.

* GOW is in my opinion the crux of the matter and means the Treasury/B of E. What hopes ?

Please destroy.

CONFIRMANTIAL

Office of the British

Chargé d'Affaire,

FC5/41

Peking.

TheGN

31 October, 1967.

You will remember writing to a on October 4, your reference 8CR 1/1167/55 VI (with various enclosures).

I am writing by to-day's bag to tell you that I was able to send a message to Derrick Self by one of our Danish

I shall not know colleagues who went to Shanghai on Sunday. whether he was able to give Belf the message for a few days, but I thought that I had better let you know that he may have received the Bank's proposels and may therefore be sending then

I will write again es 800% seme open messages about then.

so we have more news.

I am sending a copy of this letter to James Murray in the Foreign Office.

7. A. I. Milliett, Esq•,

Hong Loly

(T. Peters)

очен

CONFIDE

TIAL

CYPHER/CAT.A

FC574.

CONFIDENTIAL

FOREN OFFICE TO PEKING

TELNO. 952

3 NOVEMBER 1967

(F)

CONFIDENTIAL.

ADDRESSED TO PEKING TELEGRAM NUMBER 952 OF 3 NOVEMBER REPEATED FOR INFORMATION TO HONG KONG.

PETER'S LETTER TO ELLIOTT OF 19 OCTOBER (JUST RECEIVED): MESSAGES TO SELF.

WE WOULD MUCH PREFER NOT (REPEAT NOT) TO USE THE POLES TO SEND A MESSAGE TO SELF BUT WOULD AGREE AS A LAST RESORT.

SOSFA

FILES

F.0.

F.E.D.

SECURITY DEPT.

SSSSS

CONFIDENTI AL

NOTHING TO BE WRITTEN IN THIS MARGIN

Date and time (G.M.T.), toleram should reach addressed())

Registry No.

Top Secret

Confidential

Resisted

FC574.

__EMERGENCY

IMMEDIA: MIORITY ROUTINE

with

DEFERRED

priority

(Date)

Despatche

Draft.

No!

Peking 952 (Date)_3/

And to :-

[Security classification] -if any

[Codeword-if any],

Address to..

telegram No.

Conf

3/11

1938

Peking 952 3/11

...(date)...

repeated for information to......

Họng họng.

Peters' letter to Elliste of 19 October

Repeal to :-

#148

(just received):

to SELF

messages

We would much

prefer not (repeat Noi)

use

message

The Poles to

Fend

to SELF bur would

Be-Clair, Cade Cypher

agree

last resort.

Distribution :-

Fila

FE) Securityy

Copies to:-

1605

3/11/67

(oz) Wh. 17714-33-300 7/62 $15.

FC5/4

I'm

With the compliments of

THE OFFICE OF

THE BRITISH CHARGÉ D'AFFAIRES

casted

Mr Sharland or.

PEKING

RECEIVED IN

ARCHIVES No.31

31 OCT 1967

FC54

THE HONGKONG AND SHANGHAI BANKING CORPORATION

:two Huya

VLER MANG TUEN ROAD

A. A DOT 101

SHANGHAI, CHINA

AYROONG:

aist Jetcher, 1967.

I am enclosing for your information. a

*ranslation of a letter which we sent on 14th October

to the local Bureau of Industry and Mŝommerce, I felt

that traze was perhaps a remote posqfbility that an -ågth at least get over one of the formalities avon

theto ro exit vians appear to be ferthrowing.

They

-ight even be glad to have a younger and moze vigorous

j malèle party' i

copies more sent

sent to

to the Cadena and to the

latter which

Zank of China but it is presumably

oals with the matter anyway.

Trust that you are all well and bearing up

that the news from home is good.

#ith best regards,

Yours sing

K. Self.

Pitney Zaşe,

Brice of the British Charge d'FT=ize:

FEKINT

THE HONGKONG AND SHANGHAI BANKING CORPORATION

SHANGHAI, CHINA

The Bureau of Industry à donneres, Shanghai.

Dear Sirs,

dated 1th May 1967 ta shiat

1907

of this

Letter approval for D.K.K. Bels

kra þ,3, Lachim.

To believe

by the

1967.

may have been

enquirion and

As it is

shall be most grateful toer consideration and worship.

Vo would mention

the Bank.

x'n entry visa tire for medias) kith, 14 in hoped the

best to

Loving

་་་་

PRECE NOHY

$100, 1967

.3t

1F25/4

CONFIDENTIAL

Office of the British Charge

d'Affaires,

Peking.

19 October, 1967.

Donald Hopson has asked me to reply to your letter SCR 1/1167/ 55 VI of 4 October about the Hong Kong Bank's Shanghai Branch. It is unfortunately true that we have no confidential means of communicating with Self in Shanghai. We speak to him on average about twice a week by telephome and when we last did so a few days ago he reported that there was no change in his situation and that of his stafft.

We shall try hard to find a suitable safe hand to carry a letter to Self. Some of our solleagues sometimes ge to Shanghai but the Chinese have been quite mean about travel for all of us in recent months. In the past the Indian Embassy used to send people fairly regularly to Shanghai to look at their property there or to deal with problems concerning the Indian community. They are trying to go again but have not yet been given permission to de se.

3. The Manager of Pakistan International Airlines in Shanghai usually calls on us when he is in Paking and we also know the Shanghai Manager of Air France. I do not know if the Bark would agree to us asking them if they would carry a letter about thesa matters to Self.

4. There are also the Poles who have a Consulate General in Shanghai and who are sometimes able to send couriers to their Consulate General there or have visits from them. I should be grateful if James Murray, to whom I am copying this latter, would let us know Is the Office would agres to us approaching the Poles to take a letter for us if all else fails. We do not know if the Foles would agree to do so but they have always been very helpful in the past.

7. A. K. mliott, Esq.,

HỒNG KON

(T. Peters)

The Denso

дер

I have Preken & Securely Japa (ir Ogmond) and a gred CONFIDENTIAL attached draft 1.

PS John Jenson enguins abouw self

receut

lith

and all the

letter tomme.

above

Оли

afraid para.

bl.

༢

is the best we can do. Self Buth in Shanghai are very depressed, and we

cannot ourselves when we talk to them give them much comfort thes

(5/4)

CONFIDENTIAL

FOREIGN OFFICE, S.W.1.

24 October, 1967.

Your telegram No. 3044 about the Hong Kong Bank in Shanghai. You did indeed inform us that the Bank did not wish to send in replacements and this has been confirmed by the Bank's main Londen Office.

Eddie Bolland's mentioning the subject of Robertson's entry visa for Shanghai was in the course of a general survey of Chinese obstructionism and this must have slipped his mind. I am sure that there is no danger of the Chinese granting a visa to Robertson unless a new application is made, and we shall certainly not mention the subject to them again.

K. M. Wilford Esq., C.M.G.,

WASHINGTON.

(J. B. Denson)

MALA

25/6

M.F.P

NOTHING TO BE WRITTEN IN This margIN.

Registry No.

FOSTA

Top Secret.

Secret.

Confidential.

Restricted.

Open.

Draft. Letter

EJS

20/10

Personal

K. M. Wilford Esq.,

C...G., Washington.

from: J. B. DENSON

And this mum!

have shipped her

munt

Insert Telephone No. & Ext. when appropriate.

Theuse refer to Your telegram No. 3044

about the desire of the Hong Kong Bank

extricate its staff members from Shanghai

without suli

my replacements, You mast the Baits did not wish to send m

indeed inform us of this before you

Mis

have bun

did

left Hong Kong and we juste inlun isen.

the Bank's main London Office D

on the subjeet

Eddie Bolland's mentiaing the subject

of Robertson's entry visa for Shanghai was

in the course of a general survey of

Chinese obstructionism I am sure that

there is no danger of the

ng a visa

to Robertson unless a new application is

made, and we shall certainly not mention

the subject to them again,

the st-ju

* Jon

экооб

fig we hitta

CONFIDENTIAL

I know bulishe mkjent

F2574.

the Charlina banko ONFIDENTIAL

inition is that they do not get

in to when this staff when we

sortiumplate as

From: 0.4.0, Hong Kong

PRIORITY CYPHER

ACTION

VED IN AS No.31

.7.1967

Fe514

Kilind

D.T.R: 29th August 1967

1850 hra

To: Secretary of State

1321

D.T.D: 29th August 1967 2100 hrs

Following from Political Adviser.

Chief Manager of H.K. & Shanghai Bank, Hr. Saunders, raised with ne on 28th August question of Bank staff in Shanghai. Present staff situation is set out in H.K. telegram No. 1159. Mrs. Self's axit permit has since ex- pired and she has been told that it cannot be extended and that she must re- apply. She is not at all well and her husband would like bør to leave.

Bank have now decided that their continued prosence in China. serva no useful purpose and that they would be quite ready to close their office and liquidate the business if this could be arranged, and withdraw all British staff. They would, however, be willing to contine to finance China trade from Hong Kong and elsewhere. Alternatively and as a last resors, if Chinese opposed withdrawal they would be prepared to try to find a suit- able Chinese manager to take charge, though this wouldlimit the scale of operations possible. Only staff whom they might be prepared hereafter to send is would be Chinese volunteers of Shanghai origin.

(a)

(b)

Three factors which influence Bank in taking this position now ave;

absence of official British representation in Shanghai;

imposition of controls on Bank of China staff in London puts tha: in such the same position as F.K, bank staff in Shanghai;

(0)

their belief that Mr. Self's retention now is a political act.

Mr. Saunders hopes that you would be prepared to includo his bzak staff, or at least the wives and children, within the scope of any negotiation: for evacuation of Charge'u staff. Secondly could lir. Self be confidentially told Bank's position? If he wore then to recousand overtly withor & with- drawal or the other possible course of action in parti, 2 above, Bank would respond, but they do not wish to risk damaging Self'u position by volunteerir; this to him on open telephone line or by letter (they are still in touch by telephone). Mr. Saunders asked if any method existed by which we could convey their views confidentially to Mr. Self. I have said that I could premise nothing but would refer to you.

I have not spoken to Chartered Bank who may hold similar viors. Their manager is not here at prosect, but in any case their head office to in London.

ASC2

D1 BE, CS, DCS, PA, APA, DSB(2), BLO, HARG, DoʻI.

wah

CONFIDENTIAL

31-8-6-7

SCR 1/1167/55 VI

October 4th, 1967.

FC574.

I enclose a copy

a memorandum about the position of the Hong Kong Bank's staff in Shanghai which Jake Saunders passod to Michael Wilford at the end of August. It formed the basis of our telegram No. 1321′ of August 29th to the Foreign Office, of which I also encloss a copy

In fact Saunders raised two issues. The first, that his bank staff, or at least their wives and children, should be included within the scope of any negotiations for the evacuation of your staff, has I think been covered by the terms of the Secretary of State'a communication to Chen Yi of August 30th. But I am not quite clear what the situation is about the second point. The question is whether it would at any time be possible for you to get a confidential message to self on the lines of paragraph 2 of our telegram 1321, suggesting that he might then overtly recommend to the bank either a withdrawal or, as a last resort, the appointment of a suitable Chinese manager in Shanghai.

I had not raised this question before aš te were told flatly by the Office, in their telegrần No. 1817 of September 1st, that there was no confidential mʊans of communication with Self, and I judged that the situation was too tense to bother you on the point. But it seems possible that things may now have relaxed sufficiently to make the idea of getting a message to Self by some reliable intermediary not entirely fantastic; and it would be helpful to have your views about the whole problem.

I as sending a copy of this letter to James Hurray in Far Eastern "epartment.

D.C, Hopson, Esq., OMG, DSO, MO, TD,

H.M. Charge d'Affaires,

PRKING.

(T.A.K. Elliott)

PRIVATE AND CONFIDENTIAL

Rester. (Wista

THE HONGKONG AND SHANGHAI BANKING CORPORATION

MEMORANDUM

PART I

HEAD OFFICE HONG KONG

←

The object of this memorandum is to request the support of H.M.G. in the evacuation of our British staff and their families from Shanghai.

The delays in the granting of visas and the departure of the British Consulate from Shanghai have added additional anxieties to what has always been a difficult situation. Our Manager, D. N. H. Self, and his wife have been trying to leave since May last. Self's relief, D. G. Lachlan, - a bachelor, arrived in Shanghai in May, the application for his visa to enter China having been submitted in September 1966, T. R. K. Crozier, who has a wife and baby, is also overdue for relief.

It is our understanding that before the present situation arose the British Government had no objection in principle to the closure of our Shanghai office and this we now seek to achieve, This does not mean that {} we propose to cease financing China trade we shall continue to do so trom || Hong Kong and elsewhere,

We also request the assistance of H.M.G. in informing Self of our aim to close the office and evacuate the British staff. We do not wish to write or telephone this to Self since by doing so we may prejudice his immediate departure, If on the other hand he would welcome such instruc- tions we would issue them forthwith, since they emanate from a desire to protect the staff in the absence of any British Government establishment in Shanghai.

PART II

In the event of the Chinese authorities refusing to allow the evacuation of all our British staff unless we continued to operate the office under a Chinese manager, such a condition would be accepted as a last resort.

In such circumstances the amount of business directed to our Shanghai office would inevitably have to be reduced as we cannot envisage the employment of an acceptable local man of sufficient calibre to run the office on its present scale. The diminution of business might offend the Chinese authorities, who we think particularly want us to remain in operation because they are aware that certain overseas firms wish to buy Chinese exports through non-communist banks.

PART III

For the first time, Chinese bank employees in London find themselves In roughly the same situation as our British staff in Shanghai.

We are satisfied that Self's detention is now a political matter since he answered his so-called crimes by letter and was fully interrogated on July 12th, He has heard nothing since, He has just been told that his wife's exit visa, granted on June 14th and now expired, cannot be extended but must be re-processed despite the fact that she is ill,

12...

10.

11.

Part III (contd)

It is assumed that eventually there will have to be some form of compromise between the present British and Chinese attitudes and it is hoped that when this occurs the position of our expatriate staff in Shanghai will be borne in mind and their evacuation arranged, or at least that of their wives and children.

Although it was proposed to send in a relief for Crozier, and application was made for this in the name of S. Robertson in December 1966, I do not now consider that such a move should be made even if a visa were granted. I feel that all efforts should be concentrated on evacuating British staff from China and if these are unsuccessful there should be no replacements.

I can only envisage sending in replacements if Chinese nationals of Shanghal origin should volunteer to go from here,

سهل

under

J. A. H. Saunders

29th August, 1967.

CONFIDENTIAL

FOREIGN OFFICE, 8.W.1.

29 September, 1967.

(BC 5/4)

ا؟

1.91

In your letter 1115/67 of 17 July you mentioned two "charges" made against the Hong Kong Bank, which the Chinese had put to Self, apart from the I.C.I. Money. These involved payments made in Hong Kong by H.M.G. to Mr. Padilla a Filipino still resident in Shanghai and Mr. Meany, a British subject who lived in Shanghai until his death in 1963.

2. We have been unable to trace any payment to Padilla in 1961, or any record of his employment by H.I.G. in Shanghai at that time.

3. The records on Mesny's case are, however almost complete. In 1955 he lodged a claim for £2,537. 10. -d. to cover the total loss of 30 Chinese tenement houses, numbers 3-55 (odd numbers only) Urgs Road in the Eastern District of the International Settlement own as Doang Loh Lee, The destruction occurred during and as a result of the Sino-Japanese hostilities, 7 July 1937 8 December 1941. H.N.G. took the claim up with the Japanese Government, and in 1961 Hosny accepted the sum of £1,015. -8. -d. in final and complete settlement. He expressed the wish that the money be paid into the Hong Kong Bank in Hong Kong and, although we have no record of where it was actually paid, there is no reason to doubt that Meany's wishes were complied with,

4. I agree that you should not try to inform Self of the details of these, and any other similar cases. It is less confusing for him, and probably less con- promising as well, if he receives all his instructions from the Bank in Hong Kong, We should be most interested to know anything you may hear about the progress of Belf's case, particularly if there are any develop- ments which throw light on how much longer he will be forced to remain in Shanghai.

T. Peters Enq., C.X.G.,

PEKING.

(J. B. Denson)

CONFIDENTIAL

B4. (3746)

NOTHING TO BE WRITTEN IN THIS MARGIN

CONFIDENTIAL

Registry No.

FC 5/4

DRAFT

Letter

SECURITY CLASSIFICATION

To:-

Top Secret.

Secret.

Restricted.

ConfidentialEJS

T. Peters Esq., Peking.

C.M. C,

Unclassified.

PRIVACY MARKING

IL - HI

In Confidence

Type 1 +

From

J. B. Denson

Telephone No. & Ext.

Department

Flag R

Flag A

Flag B

In your letter reference-1115/67 of 17 July

you mentioned two "charges" made against the Hong Kong Bank, which the Chinese had put to Self,

apart from the I.C.I money. These involved

payments made in Hong Kong by H.M.G. to Mr. Padille a Filipino still resident in Shanghai and Mr.

Mesny, a British subject who lived in Shanghai

until his death in 1963.

2. We have been unable to trace any payment

to Padilla in 1961, or any record of his emply

webwit

ment by H.M.G." in Shang at that time.

3. The records on Mesny's case are, however

almost complete. In 1955 he lodged a claim for

£2,537. 10s. -d. to cover the total loss of 30

Chinese tenement houses, numbers 3-55 (odd numbers

only) Urga Road in the Eastern District of the

International Settlebent known as Doang Loh Lee.

The destruction occurred during and as a result of

8 the Sino-Japanese hostilities, 7 July 1937 December 1941. f... took the claim up with the

Japanese Government, and in 1961 H. Mesny

accepted the sum of £1,ɖ15. -s. -d. in final and

complete settlement. He expressed the wish that

the money be paid into the Hong Kong Bank in Hong Kong and, although we have no record of where it

/wes

CONFIDENTIAL

was actually paid, there is no reason to doubt

that "leany's wishes were complied with.

4. I agree wit

I agree with your view that you should not

try to inform Self of the details of these, and

any other similar cases. It is less confusing

for him, and probably less compromising as well,

if he receives all is instructions from the

Bank in Hong Kong. We should be most interested

to know anything you may hear about the progress

of Kam Self's case, particularly if there are

any developments which throw light on how much

longer he will be forced to remain in Shgnahi.

за

NOTHING TO BE WRITTEN IN THIS MARGIN

Reference. WiH (39)

Fly H

Mr. Brigh

4+2

Висал

My liter lette.

Krafti ugly from your.

Ozv. to issue

A baland

ร

Ed (1626)

Kr. Denson

Reference.

Fes/4+ (w: 38

Flag A 3 Flag B

F23/3/184

Please see Washington telegram No. 3044

and our telegram No. 813 to Peking.

2. I attach a draft letter from you to Mr. Wilford.

4. tharland

(E. J. Sharland) 20 October, 1967

Ofr wism.

CONFIDENTIAL

RECEIVED IN

¡ARCHIVES No.31

25 SEP 1967

CYPHER CAT A

PRIORITY WASHINGTON

TELEGRAM NO 3044

CONFIDENTIAL.

YOUR TEL NO 813 TO PEKING.

PERSONAL FOR BOLLAND FROM WILFORD.

TO FOREIGN OFFICE

23RD SEPTEMBER 1967.

TO FED. 299.

AS | RECOLLECT IN A COMUNICATION WHICH I SENT FROM HONG KONG I REPORTED THAT SAUNDERS OF HONG KONG AND SHANGHAI BANK HAD MADE IT CLEAR TO ME THAT HE WAS NO LONGER INTERESTED IN SENDING ANY NEW EXPATRIATE STAFF INTO SHANGHAI. I AM THEREFORE SURPRISED TO SEE REFERENCE TO ROBERTSON'S APPLICATION FOR ENTRY VISA UNLESS THERE HAVE BEEN DEVELOPMENTS SINCE MY DEPARTURE OF WHICH I AM UNAWARE.

SIR P DEAN.

FILES

R.V.

F.E.D.

DESP.

RECD.

1851Z

23 SEPTEMBER 1967.

1852Z

23 SEPTEMBER 1967.

CONFIDENTIAL

Reference............

RFIVED IN

YES No.31

Flag J

Flag

Mr. Denson

FS4,SÉPH967

Fes/4

Please see Hong Kong telegram No. 1321 attached and the copy of the message from the Manager of the Hong Kong Bank in Hong Kong, which produced it.

2. I have spoken to Mr. Stewart of the Hong Kong Bank and Mr. Lane of the Chartered Bank here in London and obtained the following views. The Hong Kong Bank has bgreed to close its office in Shanghai and withdraw its European staff but would be prepared if the Chinese would not accept that, to keep the Office in Shanghai open under the control of a Chinese manager.

3. The Chartered Bank on the other hand,even after being informed of the gist of the relevant passage in the Secretary of State's message to Ch'en Yi, have decided to keep their Shanghai Branch open with a British manager. They would however like us to bear in mind the name of the Manager's wife, Mrs. Johnson, whom they would like to be included in any evacuation plans.

4. I attach a draft telegram to Hong Kong inbruing them of the action taken here.

Te aminted, on

Sharlant

(E. J. SHarland) 31 August. 1967.

message has already gone

teser A

Hay Kry.

Jom Denm 15

Tel. Lime.

of Shalal Y

JG LANE 4385

PLEASE NOTE OUS NEW TELEPHONE NUMBER: 01-623-4365

The Hongkong and Shanghai Banking Corporation.

FINCORPORATED IN HONG KONG WITH LIMITED LIABILITY)

2. Gravechurch Street,

London, E.,6.3

RECEIVED IN

ARCHIVES No.31

- 4 SEP 1967

Dear Mr. Sharland,

F25/4

30th August, 1967,

As arranged, I enclose copy

of a telegram I have received from Saunders in

Hong Kong.

Yours sincerely,

linh

(G.O.W. Stewart) (Manager for Europe)

E. J. Sharland, Esq.,

Far Eastern Department,

Foreign Office,

Downing Street,

S.W.1.

TELEGRAMS RECEIVED,

Euesday 29th August, 1967.

SPEEDKET

| No

HỤNGACNG 29th Code

Stewart from Saunders

Following is text of

memorandum handed to Political Adviser to Hongkong

| Government today (stop) Please inform Pullen gist

of parts one and three (stop) Paragraph three is

bit overstated but is based on your conversation

with a Peking Official in London some months ago

(begins) Private and Confidential.

Part Üne paragraph one the object of this memorandjan

is to request the support of H.M.G. in the evacuation

of our British Staff and their families from Shanghai

paragraph two the delays in the granting of visas und

the departure of the British Consulate from Shanghai

have added additional anxiety to what has always been

a difficult situation (stop) Our Manager D.M.H. Belf

i and his wife have been trying to leave since May last

: (stop) D.X.A. Self's relief D.G. Lachlan a bachelor

arrived in Shanghai in May the application for his visa

to enter into China having been submitted in Joptopber

1966 (stop) T.R.X. Crozień who has a wife and baby

is also overdue for relief paragraph three it is our

understanding that before the present situation arbse

the British Government had no objection in principle

to the closure of our Shanghai Office and this we pow

sesk to achieve (stop) This does not mean that

1 propose to cease financing China Trade - we shall

sontinue to do so from Hongkong and elsewhere

(contd)

SPEEDISTT

No 190

TELEGRAMS RECEIVED

Tuesday 29th August, 1967

HONGKONG conté.

paragraph four we also request the assistance of Hik.G.

in informing D.1.0. Self of our aim to close the office

and evacuata the British Staff (stop) We do not wish

to write er telephone this to D.X.H. Self since by doing

so we may prejudice his immediɛte departure (stop)

If on the other hand he would welcome such instructions

¦we would issue then forthwith sines they emanate from

a desire to protect the Staff in the absence of aný

British Government Establishment in Shanghai (stop)

Part 2 paragraph five in the event of the Chinese

| authorities refusing to allow the evacuation of ali

our British Staff xt unless we continued to operate the

joffice under a Chinese Nanager such a condition would

be accepted as a last resort (stop) Paragraph six

¡ in such circumstances the amount of business directed

İto our Shanghai Office would inevitably have to be

(reduced as we cannot envisage the employment of an

acceptable local man of sufficient ai calibre to rún

| the office on its present scale (stop) The diminution

|of business might offend the Chinese authoritis whe |we think particularly want us to remain in operation

because they are aware that certain overseas firms

wish to buy Chinese export through non-Communist

Banka (stop) Part 3 paragraph seven for the first [time Chinese Bank employees in London find themselves

(2)

(contd.)

SPEEDISET

No 190

TELEGRAMS RECEIVED

Tuesday 29th August, 1967

HONGKONG 29th -contd.

in roughly the same situation as our British Staff

(3)

in Shanghai Paragraph sight we are satisfied that

D.X.H. Self's detention is now a political matter since

he answered his so-called CRIMES by letter and was

fully interrogated sa 12th July (stop) He has heard

nothing since (stop) He has just been told his

wife's EXIT visa granted on 14th June and now expired cannot be extended but must be re-processed despite

the a fact that she is ill Paragraph nine it is

assumed eventually there will have to be some formi

of con; ronize between the present British and Chinese

attitude and it is hoped that when this occurs the

position of our XXPATRIATE Staff in Shanghai will

be borne in mind and their evacuation arranged or

least that of their wives and children Paragraph

ten although it was proposed to send in a relief for T.ñ.L. Crosiet and application was made for this

in the name of 5. Robertson in December 1966 I

do not now consider that such a move should be made

ven if a visa were granted (step) I feel that

· all efforts should be concentrated ʊn evacuating

British Staff from China and if these are unsuccessful

| there should be no replacements

Paragraph eleven

I can only envisage sending in replacements if

|Chinese Nationals of Shanghai origin should volunteer

to go from here (:top) Signed J.A.H.Saunders

CYPHER/CAT A

CONFIDENTIAL

PRIORITY COMMONTEALTH OFFICE TO HONG KONG

TEL. 0. 1817

TOP

(D.T.D.)

:D IN

1 SEPTEMBER, 1967

(F.E.DEPT.)

VES No.3

SEN 1967

CONFIDENTIAL.

YOUR TELEGRAM NUMBER 1321: BANKS IN SHANGHAI,

F(Fes/44

WE HAVE BEEN IN TOUCH WITH BOTH THE HONG KONG AND SHANGHAI AND THE CHARTERED BANKS HERE. THE FORMER HAVE CONFIRMED THEIR DESIRE TO WITHDRAW FROM SHANGHAI, BUT THE LATTER SAY IT IS THEIR INT-

ENTION TO STAY ON.

2. BOTH BANKS HAVE BEEN INFORMED IN CONFIDENCE OF THE GIST OF THE PASSAGE IN PARAGRAPH 6 OF THE MESSAGE FROM THE FOREIGN SECRETARY TO THE CHINESE FOREIGN MINISTER, WHICH DEALTH WITH BRITISH SUBJECTS IN CHINA (MY TELEGRAM NUMBER 1801).

3. WE HAVE MADE IT CLEAR THAT THERE IS NO GUARANTEE THAT THE CHINESE WILL ACCEPT SUCH AN ARRANGEMENT. THE MATTER CAN BE CONSIDERED FURTHER WHEN THE CHINESE REACTION TO THE MESSAGE

IS KNOWN.

4. WE HAVE NO, REPEAT NO, CONFIDENTIAL MEANS OF COMMUNICATING

WITH SELF.

CROSEC

DEPARTMENTAL DISTRIBUTION

F.O. F.E.D.

O.L.A.

O.P.A.

EMERGENCY UNIT

0.0. H.K. & W.I.D. 'C'

I & G DEPT.

CONSULAR DEPT. F.E.P.D.

SENT 0450Z/2 SEPTEMBER

CONFIDENTIAL

TELEGRAM SECTION Room #4 K.C.S.

Communications Department

Fes

* Please send copies-

ط بنا ۲۰۰

the following telegram__

YTC/1

• Copy/ies of the following telegram has/have been sent

[*delete as applicable

Hong Kong 1317 of 1.9.67

TO:

o.b.m. dist.

(Initials)

(Signed)

(Department)

(Date)

Action taken in Communications Department :

દુ

(Date)

3/9/67

AFTER ACTION THIS FORM SHOULD BE SENT TO

THE APPROPRIATE ARCHIVES DIVISION FOR RETENTION

16352

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No. F25/44

FE Dept

DEPARTMENT

SECURITY CLASSIFICATION

Top Secret

Secret

Confidential

Restricted

Unclassified

• Date and time (G.M.T.) telegram should

reach addressee(s).

PRIORITY MARKINGS

(Date)..

Despatched

Aso

Flash

Immediate Priority

JOSE

HI+N+He has...dem----

CYPHER

Security classification" --if any

[Se

[

Privacy marking -if any

]

Confidential

...---

[Codeword-if any]

Addressed to

ILII

PRIVACY MARKING

In Confidence

En Clair. Code Cypher

Draft Telegram to:-

Hong Kong

No.

HALL

(Date)

1817

And to:-

119

telegram No.

And to

repeated for information to

Saving to...

Pro ZODELL.

THE

Kang Hong

(date)

Repeat to:-

Saving to:-

Distribution:-

Dept:

Copies to:-

Your telegram No. 1321: Banks in Shanghai.

We have been in touch with both the Hong Kong

and Shanghai and the Chartered Banks here. The

former have confirmed their desire to withdraw from

Shanghai, but the latter say it is their intention

to stay onothera

Both Banks have been informed in confide

baragraph

nfidence of

the gist of the passage in the message from the

Foreign Secretary seanlegg to th

the

Imy Pelegram No 1on1story

Chinese Foreign Minister

1801

which dealt with British subjects in China) "Helevant

passage reeds as follows, after the suggestion

salone be witidrawas

*1 Fould be prepared to allow all members of

your diplomatic mission and other official organisa tlone with their dpendents and staff and any other ditizens of the People's Republic of China in

Anited

3. We have

United Kingdom who wished to leave this country

to d so, the clear understanding that you

would allow all British subjects in China,

diplomatic, official or others who wished to

omatic, offic

Leave to do so at the same time.

#o Bust await Chinese reaction to this

message before proceeding further.

+ CA

We have made it clear that

There is

gensomker that

the

he.

Chriese will accepte such

arrangement. The matter

omn

Lan

considerat further when the

MESSAGE

Chien seantion to the neenage

is known.

We have no repeat

confidential

I means

with Self.

of communicating

(9430) D4.033246

G.W.B.Ltd. Gp.14)

NOTHING TO BE WRITTEN IN THIS MARGIN

Reference.

wild(34

RECEIVED ARCHIVES

1967

Mr.

Claims Dept.).

Samen (Chains

Please

top letter inside file.

I should be gratiful if you

could

cheek fro

tthe

claims

the damage

let me

have details.

Писто

Lecou. 24/3

2/8.

involved,

and where

took place. (paragraphs

a 3). and

Botharland

5.69.

Request to Regy. to obtain all files.

Mr Styrlande. (F.E..

now. (F. Ev. Dept

Dept.)

B31/8

I am attaching all our files

as for attached list on the MESNY claim.

Would you please

L.R.R.

return them direct to

The relevant papers are

or follows

Feng A⋅ on H.G.1101/5 (1961)

flagged

in the

H6.1101/277 (1961

Claim in respect of property. International Settlement, Shanghai.

Frag.B...

Are does. Oza

Payment arrangements

For what it is worth in this context the usual interpretation of effective compensation is that is should be convert ble currency but the advice of Legal. Depts should be sought before

is conveyed to Peters in Peking.

opiacion

incon

伉

C beacon Dept Дере

3013/67.

Papiès attached as requedect

лед

23/8/6/7/

daims Regy,

Room 515,

LKR

1st Avenue the

L.R.R

Holbera

Please could you send over Japan HG 1233/70 (1952) *

HG 1233/102 (1954) *

China HG 1101/5 ts (1955) I

Whi 1103/15

(1961) X

HG 1101/277

C196/α

Jij Hi 1233/6

HG 1101/176

Crass) X

(1955) X

These RPS

are for Mr. STEDMAN

ù claims department.

Thank

you

Alethin

Rt Regy: "/

(1115/67)

RECEIVED IN

ARCHIVES No.31

2 JUL 1967

F25/4

My Dear Jolin.

ما

CONFIDENTSIAL

Enter

Mr. Marland Рос ребен

Office of the British

Charge d'Affaires,

PEKING.

17 July, 1967

Fes/4

த

Derrick Self of the Hong Kong Bank in Shanghai had telephoned us a few days before we received your telegram No. 600 (our reply to which, No. 574 to Hong Kong, you will have seen), and had told us. thert the "inquisition" into the Bank's affairs had begun.

2. He said that besides the I.C.I. case two charges had been made which involved former representatives of H.M.G. in Shanghai. One charge was that in 1961 the Shanghai Branch of the Bank had helped a Mr. Padilla, a Filipino still resident in Shanghai, to open an account in Hong Kong, and that in October of that year the sum of £550 had been paid into that account by H.K.G. The Chinese allege that at this time Mr. Padilla was employed by the British represen- tative in Shanghai, and claim that if the payment was made in connexion with this employment, it should have been made in China and in Chinese currency.

3. The second charge concerns a British subject called Mesny, who lived in Shanghai until his death in about 1963. It appears that in 1961 Mr. Meany received from H.M.G. a sum in respect of "war damage claim", which was paid into his Hong Kong account. The Chinese are querying whether the payment was in connexion with damage to property in China; if so, they allege that it should have been made in Chinese currency.

4. Self made it clear that he had not been told by the Chinese to inform us of these cases, but was doing so on his om initiative simply to keep us in the picture. We told him that we would investigate our records to see if they threw any light on these allegations.

5. The only additional information that we can provide from our files and our memories is as follows:-

(a) Padilla

Fadilla, whom several of us had met on social occasions in Shanghai before he disappeared from view last summer, was a former employee of the Philippine Consulate-General there who stayed behind when the Filipinos left. We know nothing about his having been employed by us in 1961. It appears however that last year David Brookfield (then our man in Shanghai)

J.B. Denson, Esq., 0.B.E., Far Eastern Department.

/considered

CONFIDENTIAL

considered employing Padilla to sort out the old Philippine archives which had been left in our custody. Although this never came to anything, the Chinese found out about it from Padilla and were nasty to Brookfield about it at the time of his departure. I enclose a copy of the relevant extract from Brookfield's account of his interview with the Foreign Affairs Department in Shanghai.

(b) Mesny. From a letter which has reached us since Peter Hewitt's

departure from Shanghai, it appears that Hewitt was corresponding with the Hong Kong and Shanghai Bank in Hong Kong in their capacity as trustees of the Kesny estate. We know nothing more about lir. Mesny, however, and Hewitt has recorded that he destroyed the Shanghai file on the subject before leaving.

We shall not pass on to Self even this rather worthless information since we think it best that his briefing should come to him from the Bank in Hong Kong. It seems sensible to have no discussion of this subject with Self, both to avoid confusing him with instructions and suggestions from various sources (see Hong Kong telegram to us No. 330 of 12 June, para. 3) and to prevent our getting involved as far as possible.

7. We should be grateful for any further information you can dig up about these matters either in London or Hong Kong.

I am sending copies of this letter to Michael Wilford and to Ben Thorne (Acting British Trade Commissioner in Hong Kong).

ever

Your ther

(T. Peters)

CONFIDENTIAL

Extract from record of meeting between Mr. D.G.H. Brookfield and Foreign Affairs Department, Shanghal on ó July, 1966

Mr. Yang:

The second point is that according to a report made by a Filipino, V. Padilla, to the Public Security Bureau here, you have been entrusted by the Philippine Government to sort out the old archives of the "Philippine Office" and you want to employ him temporarily for the work. The "Philippine Office" is an illegal establishment and you being an officer of the office of the British Charge d'Affaires Taking Care of British Nationals' Affairs in Shanghai it is clearly beyond your scope to handle any matters of other nationals. In September, 1965 you were told that you should not overstep the scope of your function. This constitutes an open and flagrant violation of the Geneva verbal agreement and is also against the scope of your functions told by the Ministry of Foreign Affairs and the Foreign Affairs Department. Your doing so is an out-and-out violation. You must therefore stop this immediately and give assurance that you will not repeat it in future. (At the request of Hr. Brookfield Kr. Lo Hei-chang repeated what was said about the first part of the second point).

Mr. Brookfield:

I want to say I have received no definite instructions from the Foreign Office to sort out the old Philippine files which are now left in my office. I talked to r. Padilla about listing the old files because he is familiar with the work. I have only suggested to the Foreign Office to employ Mr. Padilla temporarily for doing the work but no action has been taken so far as no reply has yet been received from the Foreign Office. As there is no action there is nothing to stop.

Fr. Chen Ting-ping:

Director Yang has said that you mentioned the temporary employment to Mr. Padilla and this is the report made by Hr. Padilla to the Public Security Bureau here, so this is part of the action you have already taken. Furthermore, to handle nationals' affairs other than that of British nationals you have overstepped the scope of your function so this must be stopped forthwith,

Hr. Brookfield:

I wish to point out that as nothing has been started so there is nothing to be stopped. I have asked Mr. Padilla about this as he is the only Philippine in Shanghai. I only made a proposal to the F.O. Is there any vilation if no action has been taken?

Mr. Yang:

You said you had talked about this matter with Mr. Padilla. This is already a violation of the 1954 Geneva verbal agreement.

/Mr. Brookfield:

ส่ง

Mr. Brookfield:

F.0.

I have just said that I have so far received no reply from the

Ky proposal may be vetoed by the F.O.

Mr. Chen Ting-ping:

You being an officer of the Office of the British Charge d'Affaires Taking Care of British Nationals' Affairs in Shanghai should only take care of the British nationals affairs in Shanghai and not the affairs of other nationals here. This has already been made very clear to you by the Foreign Affairs Department. You have actually started the matter as Director Yang has already pointed out and this constitutes a violation. Any denial of this is groundless.

Hr. Brookfield:

I did not make any denial. I asked Mr. Padilla if he would like to do this work. I have so far received no instructions from our F.0. I cannot agree that I have taken any action.

Mr. Yang:

Mr. Padilla has said that you wanted to employ him temporarily. How can you deny that? Furthermore, do you think you as an officer of the Office of the British Charge d'Affaires Taking Care of British Nationals' Affairs in Shanghai have the right to meddle with affairs of Philippine nationals.

Mr. Brookfield:

Firstly, I have taken no action. I have merely made enquiries from Mr. Padilla, and secondly I have not decided whether I would take any action. So I have not started any action.

Er. Chen Ting-ning:

How can you deny that to make enquiries is not a start of the action? To enquire is already a part of the action.

Mr. Brookfield:

If Mr. Chen can see no difference between enquiry and action then it is a question of different language. Then we cannot make any further argument as it is a question of different language.

Hr. Yang:

Is there any stipulation laid down anywhere that the Officer of the Office of the British Charge d'Affaires Taking Care of British Nationals' Affairs in Shanghai can deal with matters concerning other foreign nationals? This is an open and flagrant violation.

Ling

CONFIDENTIAL

RECEIVED

Reference...

AK.

V, No 11

Mr. Dengen

1.G.1. Money

1 3 JUL 1967

Fesly

Dr. Clark of I.C.I. telephoned this morning about the Chinese enquiries into the use by I.C.I. of the money handed by the Hong Kong Bank in Shanghai to our Office in Peking and by Peking to I.C.I.

2. Mr. Kendall, the I.C.I. No. 1 in Hong Kong is now on leave (returning to U.K. via Japan) and

Mr. Burrell who is now in charge has cabled asking for details of dates and people involved in spending the money.

3. I emphasized the point made in our telegram No. 483 to Peking, 1.e. that in our opinion dates and names should be left as vague as possible.

I also stressed that this was just as important to I.G.I. as it was to us, since if the Chinese wanted to be unpleasant towards individuals or prohibit their re-entry into China I.C.I. employees were every bit as waste as our own.

I recommended therefore that I.C.I, should confirm that the money was used for their, exhibition in October 1965 and, if pressed further, say that it could not be accounted for separately.

· Dr. Clark said his thoughts had been very similar and that he would advise Hong Kong accordingly.

Jharland

(K. J. Sharland) 12 July, 1967.

I agree entirch with the

you took.

Tami

CONFIDENTIAL

line

En Clair

'CONFIDENTIAL

PRIORITY PEKING TO FOREIGN OFFICE

Telno. 871

UNCLASSIFIED

11 July 1967

RECEIVED IN

ARCHIVES No.31

1 1 JUL 1967

Fes/4

Addressed to Hong Kong telegram No. 574 of 11 July Repeated for information Priority to Foreign Office

·Foreign Office telegram No. 600 to me.

[I.C.I. Money]

I have no (repeat no) objection.

Mr. Hopson

DEPARTMENTAL DISTRIBUTION

F.E.Dept.

Consular Dept.

SSSSS

Sent 01252/11 July 1967

Recd 07192/11 July 1967

CONFIDENTIAL

Par. 13.

CYPHER/CAT A

F= 5/4 B

다

CONFIDENTIAL

TOP COPY

IMMEDIATE FOREIGN OFFICE TO PEKING

600 10 JULY,1967 (FED)

CONFIDENTIAL

ADDRESSED TO PEKING TELEGRAM NO 600 OF 10 JULY REPEATED FOR INFORMATION TO HONG KONG.

MY TELEGRAM NO. 483: 1.C.). MONEY

1.C.1. INFORM US THAT SELF HAS BEEN INSTRUCTED BY THE CHINESE AUTHORITIES TO INFORM THEM ON 12 JULY WHAT I.C.I. DID WITH THE MONEY.

2. BURRELL, I.C.I. REPRESENTATIVE IN HONG KONG, PROPOSES TO TELL THE BANK THERE ON TUESDAY 11 JULY THAT THE MONEY WAS SPENT ON THE

.C.I. EXHIBITION IN TIENTSIN IN OCTOBER 1965. SELF WILL THEN BE TOLD AND WILL SO INFORM THE CHINESE. THIS MIGHT INDICATE THE DATE OF HANDOVER MORE PRECISELY THAN CONTEMPLATED IN MY TELEGRAM UNDER REFERENCE. BUT 1.C.I. CONSIDER AND WE AGREE THAT THIS IS THE COURSE BEST CALCULATED TO CLOSE THE MATTER AS USE TO WHICH MONEY WAS PUT WAS FOR PROJECT AGREED BY CHINESE GOVERNMENT. IF YOU SEE OBJECTION, PLEASE TELEGRAPH FLASH TO HONGKONG,

SOSFA SENT 18002/10 JULY

DEPARTMENTAL DISTRIBUTION

F.E.D.

CONSULAR DEPT.

CONFIDENTI AL

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No. F

DEPARTMENT

FC5/4

SECURITY CLASSIFICATION PRIORITY MARKINGS

Date and time (G.M.T.) telegram should

reach addressee(1).........

Top-Secret ingres

Confidential

Routine

PRIVACY MARKING

In Confidence

Ex Clair Lode

Cypher

Draft Telegram to:-

Peking

No.

CONFIDENTIAL

FC5/4

PILI

(Dat

Despatched

Fark

omvedlate

[Security

Security classification

if any

ztion]

[

Privacy marking if any

[Codeword-if any] ... -

Addressed to

telegram No......

boo

600

And to..

2004I...

(Date) 10/7

And to:-

repeated for information to

DALLAS

- domin----- pay

Peking

LEJOJALI-Lad➖ ➖➖

(date)

Hong Kong.

-----------➖➖➖➖➖➖.

VIL ------

CALL

Saving to

Immelt Repeal to: 7

Hồng Kong

VIACO

Saving to:-

`shand

Distribution:- Departmental

FE .D.

Consular Dept.

Copies to:-

My telegram No. 483: [1.0.1. Money

I.C.I. inform us that Self has been instructed

by the Chinese authorities to inform them on 12

July what I.C.I. did with the money.

Burrell, I.C.I. representative in Hong Kong,

proposes to tell the Bank there on Tuesday 11 July

that the money was spent on the I.C.I. exhibition in

Tientsin in October 1965, Self will then be told

mant and will so inform the Chinese. This wedi indicate

the date of handover more precisely than contemplated

in my telegram under reference. But I.C.I. consider

and we agree that this is the course beat calculated

to close the matter as use to which money was put

was for project agreed by Chinese Government. Ir

you see objection, please telegraph flash to Hong

Kong.

101

RESTRICTED (1115)

D.C. Wilson, Esq., Far Eastern Department.

With the compliments of

COMMERCIAL SECTION

(A. J. Hunter) RECEIVED IN

THE OFFICE OF

ARCHIVES No.31

27 JUN 1967

FC5/4

THE BRITISH CHARGÉ D'AFFAIRS

PEKING

20 June, 1967

(1115)

RESTRICTED

Office of the British

Charge d'Affaires,

PEKING.

20 June, 1967

Your telegram to the Foreign Office No. 1 of 12 June, repeated to us as No. 330.

We have taken the action requested in para. 2. Would you kindly so inform the person concerned?

I am copying this letter to David Wilson in the Foreign Office.

(A. J. Hunter)

First Secretary (Commercial)

I.A. Goodfellow, Esq., British Trade Commission,

HONG KONG.

I. Sherland

RESTRICTED

ра

30%

28h

FC5/4

Despatched

A. G.

5/6

C: NFIDENTIAL

FOREIGN OFFICE,

8.W.1.

15 June, 1967.

I enclose a copy of a letter from Johnston, the Shanghai Manager of the Chartered Bank, which was sent by the safe" hand of the Air France representative to the Rong Kong Manager of that Bank, together with a copy of the telegram to the Governor which Self was compelled to sign by the local employees of the foreign banks in Shanghai. Lane, the General Kanager of the Chartered Bank here, sent copies of this correspondence to Arthur de la Mare for our information.

2. I think you ought to have this correspondence so that you can see Johnston's explanation of the circumstances in which he and Self were compelled to send this telegram to the Governor. I leave it to you to decide whether to show it to Sir David. Clearly, Johnston and Self were in no position to hold out against the pressures being applied to them. It is at least reassuring tỏ know that they seem to be standing up oretty well in the extremely trying conditions in Shanghai.

I am sending copies of this letter, with enclosures, to Thee Peters in Peking and Bunny Carter at the Commonwealth Office.

↑. A. K. Elliott, Esq.,

Hoad font.

(E. Bolland)

VIDENTIAL

GENERAL MANAGERS'

OFFICE

TELEPHONE

LONDON WALL 3688

Eut

RECEIVED ARCHIVES No. 5

In Bollas an

し

Dear de la Mare,

1 € JUN 1967

FC5/4

146

THE CHARTERED BANK

38, BISHOPSGATE

LONDON, E. C. 2

12th June 1967.

Further to my letter of the

8th June and to complete your file, I

enclose a copy of the message which the two bank managers in Shanghai were persuaded to send to the Governor in Hong Kong.

helk

Mw.disk.

ма PA

If Elicht.

Yours sincerely,

R.A.S. Lane.

A.J. de la Mare, Esq., C.M.G.,

Foreign Office, London, S.W.1.

W.28

H.E. THE GOVERNOR

GOVERNMENT HOUSE HONG KONG

Owing to the reported bloody suppression of and Fascist atrocities against Chinese people in Hong Kong from May sixth the whole staff of the foreign banks in Shanghai unanimously lodge their strongest protest against the Hong Kong Government and we request that such suppression ceases forthwith (Stop) The protest states:-

Supreme instruction

All reactionaries are paper tigers (Stop) In appearance the reactionaries are terrifying but in reality they are not so powerful (Stop) From a long-term.point of view it is not the reactionaries but the people who are really powerful (Stop)

Most Most Strong Protest

For the past days the British Authorities at Hong Kong mobilised groups upon groups of soldiers and policemen wage bloody suppression and ferocious persecution upon the patriotic compatriots at Hong Kong (Stop) They even despatch spies and bullies to surround our Bank of China Hong Kong Branch and wage armed attacks upon the staff of our Organizations at Hong Kong making a large scale massacre (Stop) Our whole staff of the foreign banks express our strongest and most violent anger towards these Fascist outrages and lodge our most most strong protest (Stop)

The large scale bloody event created solely by the British Authorities at Hong Kong is the long plotted organised and planned rabid provocation of the British Imperialism towards the Chinese People (Stop) The British Authorities at Hong Kong commit capital crime towards the Hong Keng compatriota owe a new blood debt towards the 700 million Chinese people (Stop)

Chairman Mao teaches us (quote) "Imperialism and all reactionaries are paper tigers" (unquote) The Chinese people armed with the ever victorious Mao Tse-tung's thought are not to be trifled with (Stop) The blood debts owed to us by British Imperialism must be paid (Stop) The British Imperialists who have committed capital crime against us cannot escape from the verdict of the Chinese people (Stop)

We the staff and workers of the foreign banks firmly support our compatriots in Hong Kong in their heroic and just struggle (Stop) We vow to join the 700 million Chinese people to act as the strong back to them (exclamation) We sternly warn the John Bulls should you still not hold yourselves in check and dare to continue your atrocities we will take further revolutionary actions and struggle against you to the end (Stop) You are held responsible for all consequences resulting there- from (exclamation)

- 2

Firmly support the solemn statement of our Ministry of Foreign Affairs (exclamation)

Most most strongly protest against the bloody outrage of the British Authorities at Hong Kong (exclamation)

Firmly support the righteous struggle of the Hong Kong patriotic compatriots (exclamation)

Down with British Imperialism (exclamation) Down with U.S. Imperialism (exclamation)

Down with Soviet modern Revisionism (exclamation) Long live the ever-victorious Mao Tse-tung's thinking (exclamation)

Long live our most most respected and beloved great leader Chairman Mao (exclamation) (exclamation)

Long Live Chairman Mao Long long life to him (exclamation) end a

The whole staff of the foreign banks

Hongkong Bank Maneger

D.N.H. Self.

•

F25/4.

13 June, 1967.

a copy of If I may

Many thanks for sending me Johnston's interesting letter. say so, he seems to be at unding up very well indeed to the extremely trying circumstances in shanghai.

We are already in touch with the Hong Kong and Shanghai Bank about the "crises" they are alleged to have committed in China. I would be very interested to hear

ny details of the "crimes" being attributed to your Bank by the Chinese, in case we can help.

(A.J. de la Mare)

R.A.3. Lane, Esq.,

The Chartered Bank,

38 Bishopsgate,

E.C.2.

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry

THE GAME

F254.

DRAFT

Type 1 +

Top Secret Secre

Confidential

Restricted.

Unckssified.

To:-

R.A.S. Lane, Esq., The Chartered Bank, 38 Bishopsgate, London, E.C.2.

From

A. J. de la Mare

Telephone No. & Ext.

Department

Many thanks for sending me

Johnston's interesting letter.

a copy of

If I may say

so, he seems to be standing up very well

indeed to the extremely trying circumstances

in Shanghai.

We are already in touch with the Hong

Kong and Shanghai Bank about the "crimes"

they are alleged to have committed in China.

I would be very interested to hear any

details of the "crimes" being attributed to

I chat we cam

your Bank by the Chinese, so that we can

date help.

916

Enliv!

GENERAL MANAGERS'

OFFICE

TELEPHONE

INDON WALL 3680

RECEIVED ARCHIV..

16 JUN 1967

FCS/4

THE CHARTERED BANK

38. BISHOPSGATE

LONDON, E. O. 2

8th June 1967.

Dear de la Mare,

Afr de la fore

I enclose a copy of a handwritten letter from Johnston, our Shanghai manager, sent to our Hong Kong manager by the safe hand of the Air France representative, which you may find of interest.

Our Hong Kong manager tells us that he has since heard that Johnston and Self (Hongkong Bank) have now been asked to admit their "crimes" or the "crimes" of the banks since 1950.

attach a

With kind regards,

to get off stroghlangt opp have. I

might then W. Mr. Ellicht

Hist

heure a

draft

ack.

with

you my

Yours sincerely,

6th Gour

Maury

R.A.S. Lane.

copy of the emet. in

Ishow, at his dearchin,

confidenc

- see marked A.J. de la Mare, Esq., C.M.G.,

Foreign Office, London, S.W.1.

passage

page

свой

See so

Phane's Well of 12 Jun

COPY

Dear Peter,

w.26

c/o The Chartered Bank, P.0. Box 2135,

Shanghai.

29th May 1967.

This letter will reach you through the

good offices of Paul Mathias, the Shanghai manager of Air France.

As our mail is obviously read before being despatched I have so far not written to Head Office concerning the happenings of last week in Shanghai. You will no doubt have learned of the sacking of the British consulate here a week last Tuesday, all of which I was able to watch from our office window. It was a shocking business. The extremist elements among the 300/400 Red Guards who stormed the place were apparently out for blood. Fortunately Joyce Hewitt and her little girl and baby twin girls were forewarned by one of the more moderate elements and they were led away and locked in a bathroom at the back of the house. The house was entirely ransacked and even their clothing and children's toys were destroyed. Peter Hewitt had bad time being marched up and down in the grounds for four hours having his head pushed forward and being pinched and shoved. After the Red Guards left that evening there were no further attempts to break in and we were able to visit the Hewitts who had moved into another house in the compound.

These events naturally made us wonder what our own fate would be, but fortunately so far we have suffered no interference. Last Friday, however, I and Derrick Self, the Hongkong Bank manager, were summoned to a meeting of "All the Employees of the Foreign Banks in Shanghai".. After listening to a reading from the works of Chairman Mao we were handed a strongly worded protest concerning the bloody

/suppression

- 2 -

suppression and fascist atrocities perpetrated by the Hong Kong Government again their patriotic

compatriots as they termed it. After reading out the protest in both English and Chinese we were then asked to convey it to the Hong Kong Government on their behalf by telegram. This we agreed to do and typed out the lengthy telegram. After typing it was taken upstairs again for approval by the meeting. After a two hours wait Derrick and I were again called and told that we had not stated our own views. We then of course argued that we were here as bankers and entirely non-political and should not be asked to give our own views. I then pointed out that no details of the fascist atrocities had even been given by the Chinese authorities to my knowledge and we told the meeting that so far as we knew nobody had been killed by the police and that on the first day only two rioters had been injured.

In any case if we were to be subjected to political interference they should close us down as we could not carry on in such conditions. After this the meeting became more amicable. However

However, we could see no way out of the impasse other than complying with their wishes to some extent. So we reworded the introduction of the telegram to the Governor by referring to our protest against the bloody suppression and fascist atrocities and requesting him to put a stop to it. What they thought of the telegram in Hong Kong heaven only knows, but to me it was ridiculous. No doubt you must have been told about it and I only hope that it was realised that we did not send the telegram of our own free will. We are now wondering what the next step will be.

What we expect to happen is that they will slowly make life more and more difficult for us so that we are forced to apply for closure. This of course is not the thing to do, since if the application comes from us we shall be in the wrong and the closure itself will be long drawn out and difficult. We were surprised when they order the consulate to close and gave the Hewitts

/48 hours

- 3 -

48 hours to leave Shanghai. I don't think the Bank of China will wish us to close as we do useful work by discounting their bills, but political considerations here overrule everything.

We get the news through the BBC and London airmail Times but we have had no Hong Kong papers for a fortnight. At the moment we are all right and the staff have not let the meeting make any difference to their usual friendly behaviour towards me. The sending of the telegram was obviously

directed from above and of course they have to do as they are told. During the week of anti British demonstrations no animosity whatever was directed at us apart from having posters with slogans pasted over my office wall and windows. Although the consulate had no diplomatic power we feel all the more defenceless now that it is closed, although of course we can telephone Peking. We all have a feeling of insecurity which started last June with the commencement of the Cultural Revolution.

I have reported the sacking of the consulate to Head Office but not the meeting on Friday so I leave it to your discretion as to what to do in this respect.

Mme. Nien Cheng whom I think you know has not been heard of since last July. A similar fate has been meted out to our Chinese friends with whom we used to mix so frequently. We just don't know where they are. Nien we believe tried to commit suicide but failed.

We know that you all have been having a

very trying time in Hong Kong and hope that

circumstances will return to normal in the not too

distant future. Internally here things are very confused and the pro-Maoists are fighting amongst themselves.

/The

The Revolution is not going well and this may be the reason for all the external diversions.

I trust you are all well.

Sincerely yours,

David Johnston.

CONFIDENTIAL

CYPHER/CAT A

FOREIGN OFFICE TO PEKING

IMEDIATE

TELNO. 483

13 JUNE, 1967

(FED)

FCS/4

CONFIDENTIAL.

ADDRESSED TO PEKING TELEGRAM NUMBER 483 OF 13 JUNE REPTD FOR

INFMN TO HONG KONG.

YOUR TELEGRAM NUMBER 667 AND HONG KONG TELEGRAM NUMBER 829 TO C.0.

1.C.1. MONEY:

WE AGREE THAT DATES SHOULD BE LEFT VAGUE AND NO, REPEAT NO, NAMES MENTIONED. WE DO NOT KNOW EXACTLY WHAT CHINESE KNOW, AND REFERENCE TO WILFORD MAY WELL BE USELESS, IN ANY CASE WE PREFER THAT RESPONSIBILIT SHOULD NOT REPEAT NOT BE SHOULDERED BY ANY INDIVIDUAL MEMBER OF YOUR STAFF, PAST OR PRESENT.

2. AS SELF HAS RECEIVED INSTRUCTIONS DIRECT FROM THE BANK IN HONG

KONG THERE IS NO, REPEAT NO, NEED FOR YOU TO ADVISE HIM.

3. 1.C.I. RECEIPTS MAY BE DESTROYED AS REQUESTED BY KENDALL IF YOU

SEE NO OBJECTION.

SOSFA

DEPARTHENTAL DISTRIBUTION

F.0.

F.E.D.

0.0. D.T.D.

SENT 11442 13 JUNE

CONFIDENTIAL

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No. F.E.D.

DEPARTMENT

SECURITY CLASSIFICATION

PRIORITY MARKINGS

(Date).

13/6

Top Stret Secpt

Bestellled

1144

Ummediate

Confidensial Restricted

Pri

Ungfassified

• Date and time (G.M.T.) telegram should

reach addressee(s)

➖➖➖➖.JLI

In Confidence

"Security classification] CONFIDENTIAL

PRIVACY MARKING

[Sect

[

En Clair. Code Cypher

Draft Telegram to:-

PEKING

(Date)

And to:-

11-23

if any

Privacy marking ]

-if any

[Codeword-if any].

Addressed to

telegram No.

And to..

"PEKING.

... "

....

.....(date)

repeated for information to

➖➖..........¶----‒‒‒‒JI ■. ➖➖-----...

-dumanı. HAARENA-HwałamuTIOIELLON-AN

... HONG KONG

BILLI

Saving to.......

MILLI

Repeat to:

HONG/KONG

со

Your telegram No. 667 and Hong Kong telegram

No. 829 to 0.0. 433

I.C.I. Money.

Paking

та

Saving to:-

Distribution:-

F.E.D.

C.O. Dependent

Territories

Copies to:-

We agree that dates should be left vague and

We do not- no, repeat no, names should mentioned.

Chinon know land

Chinese know exactly what/

Wilford

well be useles

bushless

bewert

oned, reference to

In any case we prefer not repeat not

that responsibility shouldị bé shouldered by your

apy

inciviayal morober of your

steff, part of pitzent.

As Self has received instructions direct from

the bank in Hong Kong there is no, repeat no, need

for you to advise him.

3. 1.0.1. receipts may be destroyed as requested

by Kendall if you see no objection.

а 13/6

CONFIDENTIAL

BA. (3746)

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No.

SECURITY CLASSIFICATION

Top Secret.

Secret.

Confidential,

Resincled. EJS Unclassified. 12/6

PRIVACY MARKING

In Confidence

Flag B

WAL

CONFIDENTIAL

DRAFT

Submission

Type 1

To:-

Mr. de la Mare

24 (28

From

E. Bolland

Telephone No. & Ext.

Department

Beking Telegram No. 667

Problem

-Responsibility for handing over I.C.I.'s

money

Regommendation

2. We should give Mr. Hopson authority to say

that the responsibility was Mr. Wilford's, but

only as a last resort.

Argument

3. I feel that it should be possible for our

Office in Peking to claim that I.C.I.'s money

was held in safe custody for I.C.I. at the request

of the Hong Kong and Shanghai Banking Corporation

and that our Office had no option but to disburse

the money inside China at the owner's request.

This was a perfectly reasonable action on their

part, since there was no attempt to evade Chinese

currency regulations by taking the money out of

the country. If the action, in the eyes of the

Chinese, merits blame, it is the responsibility

of the Office as such, and not of any individual.

In their present mood, however, the Chinese

may not listen to reason, so that I think Mr.

Hopson should be given direction, as a last resort

/to

ONFIDENTIAL

CONFIDENTIAL

to lay the blame upon an officer already safely

out of China.

5. I have consulted Personnel Department who

say that it would be very undesirable, if Mr. Wile

should not be al

to-Chine, from his

to take any

action which

night prevent

Tịch

Mur.

# them from

porting Wilford to Chine again.

own as well as from the office point of view, They

point out, however, that he is not a Chinese

speaker and they would reluctantly accept the

limitation if it were necessary.

I attach a draft telegram.

Finance Dept

chave agreed the paragraph relating to vecsipli

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No.

DEPARTMENT

SECURITY CLASSIFICATION

Top Secret

Secret

Confidential

Restricted

Unclassified

PRIORITY MARKINGS

(Date)....

Flash

Immediate

Priority Routine

}

▪ Date and time (G.M.T.) telegram should

reach addressee(s)

Despatched

PRIVACY MARKING

[Sect

Security classification" -if any

ication]

In Confidence

En Clair.

[

Privacy

marking

Code Cypher

Draft Telegram to:-

Peking

No.

(Date)

And to:-

-if any 1

[Codeword-if any.......

Addressed to..

telegram No...

And to

...............IILF..

CONFIDENTIAL

----------IL

SUSPEND

repeated for inform

HON KONG

Saving to

PILLJA

Repodt to:-

Hong Kong

Saving to

Distribution:--

F.E.D.

C.0. Dependent

Your telegram No. 667 and Houp Kay l'alegram No. 829 to 0.0.330 to Pakking).

co.f.c.1. Money

We agree that, in the last report only, you

may say responsibility was Mr. Alford's. You should

maintain, as long, as possible that responsibility

rests with the office as an office and individual

responsibility does not arise

As self receiv

instructions direct from

the bank in Hong Kong so time there is no, repeat

no, need for you to advise him unicoo-long-Kon-free

Territories

Copies to:-

I. C. I. receipts may

requested by

objection.

be destroyed

KENDALL if you

CONFIDENTIAL

INWARD TELEGRAM

TO THE COMMONWEALTH OFFICE (The Secretary of State)

FROM HONG KONG (Sir D. Trench)

Cypher

D. R. 12

12 June, 1967.

0950Z

ん

h/17

13 JUN 1

FC5/4

PRIORITY CONFIDENTIAL No. 829.

Addressed to Foreign Office No. 81. Repeated * Paking No. 330.

(9. of S. please of s. please

pass to both).

Your telegram No. 472 to Peking.

1.C.I.Money.

2. Your paragraph 3.

Kendall informed. He makes the additional request that any receipts from I.C.I. staff which may be still in Peking's possession should be destroyed so that none of his staff are compromised by name.

2. I have also spoken to the Banks H.Q. They suggest that Peking should not (repeat not) phone Self to prevent confusion in his mind. He has already been instructed to act in accordance with Peking telegram No. 656 to you.

(Passed as requested)

Distribution

←

F.E.D.

Aid Dept.

DEPARTMENTAL DISTRIBUTION

Copies also sent to:-

Foreign Office

Commonwealth Office

FED (Registry)

F.E.D.

J.R.D.

F.E. and P.D.

Commonwealth Trade Dept.

Commonwealth Financial

Policy Dept.

the

CONFIDENTIAL

Cypher/Cat A

CONFIDENTIAL .

PRIORITY HONG KONG

TO FOREIGN OFFICE

no 81°

12 June 1967

RECEIVED IN ARCHIVES

14 JUN 197

FC 5/4

CONFIDENTIAL

Addressed to Foreign Office telegram No. 81 of 12 June.

B.T.C.

Repeated for information to: Peking.

Your telegram No. 472 to Peking:

1.C.I. money.

Your paragraph 3.

Kendall informed.

From

He makes the additional request that any receipts from I.C.I. staff which may be still in Peking's possession should be destroyed so that none of his staff are compromised by name.

3. I have also spoken to the Bank's H.Q. They suggest that Peking should not (repeat not) 'phone Self to prevent confusion in his mind. He has already been instructed to act in accordance with Peking telegram No. 656 to you.

Her Majesty's Governor

Sent

Untimed 12 June 1967

Read. 10332/12 June 1967

DEPARTMENTAL DISTRIBUTION

0.0.

D.T.D. F.E.P.D.

F.O. F.E.D.

SSSSS

paa.sed 23

CONFIDENTIAL

Cypher/Cat A

CONFIDENTIAL

IMMEDIATE PEKING TO FOREIGN OFFICE

Telno 667 10 June 1967

CONFIDENTIAL

$/4

Addressed to Foreign Office telegram No. 667 of 10 June Repeated for information to Hong Kong for Trade Commissioner Hong

Your telegram No. 472: 1.C.I. Money.

I agree provided no repeat no names are mentioned and dates left as vague as possible, e.g. handover completed in 1965. In last resort I suggest I might say responsibility was Mr. Wilford's.

2. Do you still wish us to advise manager Self (see my telegram No. 656 and your telegram No. 464, paragraph 4)?

Mr. Hopson

Sent 02302 10 June 1967

Recd 0616Z 10 June 1967

DEPARTMENTAL DISTRIBUTION

F.0. Far Eastern Dept.

C.0. Far East & Pacific Dept.

D.T.D.

ADVANCE COPIES SENT:

ра

see 23

CONFIDENTIAL

Cupher/Cat A

CONFIDENTIAL

RIORITY HONG KONG TO FOREIGN OFFICE

Telno 78 9 June, 1967

CONFIDENTIAL

Hong Kong telegram 77 to you:

FC5/4

I.C.I. Money.

Since I sent the above telegram to you and Peking signifying acceptance of your line, Kendall of I.C.I. has reversed engines. He now feels that the Chinese know exactly what finally happened to the money, and that the next time one of his European staff visits China they will be interrogated or detained.

2. Kendall has therefore cabled his London office asking them to return to the gharge with you and advocating the tactic outlined in paragraph of my telegram No. 74.

3. No doubt you will advise me if you change your instructions. In the meantime I am not repeating this to Peking to save confusion.

Trade Commissioner

Sent 08402 9 June, 1967

Read 09152 9 June, 1967

DEPARTMENTAL DISTRIBUTION

F.O. F.E.P.D.

Consular Dept

C.O. F.B. & P.D.

D.T.D.

Commonwealth Financial Folicy Dept Commonwealth Trade Dept

bbbbb

CONFIDENTIAL

A.... sec 23 fa..

CYPHER/CAT A

CONFIDENTIAL

IMMEDIATE FOREIGN OFFICE TO PEKING

TEL 10.472 9 JUNE 1967 (FED)

COPY

FC 5/4

CONFIDENTIAL.

ADDRESSED TO PEKING TELEGRAM NO.472 OF 9 JUNE REPEATED FOR INFORMATION TO HONG KONG.

MY TELEGRAM NO.464 AND HONG KONG TELEGRAM NO.805 TO F.0. (NOT TO PEKING).

1.C.1. MONEY.

KENDALL IS CONVINCED THAT THE CHINESE KNOW EXACTLY WHAT HAPPENED

TO THE MONEY, AND THAT YOU SHOULD THEREFORE SAY, IF ASKED BY THE CHINESE, THAT WE HANDED IT OVER TO 1.C.I. I.C.I. WOULD THEN SAY TO THE CHINESE THAT THEY HAD SPENT IT IN CHINA.

2. DO YOU THINK THIS COURSE WOULD COMPROMISE MEMBERS OF YOUR STAFF? IF NOT WE AGREE TO KENDALL PROCEEDING AS PROPOSED.

3. 1.C.1. HEAD OFFICE CONCUR. HONG KONG PLEASE INFORM KENDALL ON RECEIPT OF PEKING'S AGREEMENT.

SOSPA SENT 1940Z 9 JUNE

DEPARTMENTAL DISTRIBUTION:

FO: FAR EASTERN DEPARTMENT

CO: D.T.D.

see (23

pa.sel ра

CONFIDENTIAL.

17092

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No. FED

DEPARTMENT

SECURITY CLASSIFICATION PRIORITY MARKINGS

(Date)

Top-Seret

idential

Immediate

- Date and time (G.M.T.) telegram should

reach addressee(s)

-JI LI➖➖➖

-att

∙1900

"IN MIII. MIN IL

-- P.....

Cypher

Draft Telegram,fo:-

No.

(Dale)

PEKING

And to:-

#73

9/6

[

Security classification

14. Confidential

[Codeword-if any]

Addressed to

Peking

9/6

And 10

telegram No..... 4)2(date)..........

repeated for information to........

Hougtong

חח

JA--.---.L IMILII

H-..

Saving to

ז 1

Repeat to:

Haughofis

Saving to:-

Distribution:

Departmental

F.E.D Commonwealt

Coples to:--

Steie

Noj teto 464 and

and Hongkong tet

no. 805 to Fo (not to baking)

Money

Kendall is convinced that the blincse

know exactly what happened to the

money.

and that

you

should therefore say,

handed

1.C.!

hould then say

acked by the Chinese, that

it over to 1.0 1.

to the Chinese that they had spent it

in China.

you

think this course

would

compromise members of your staff? If

Лив адже

not

to Kendall proceeding as proposed.

Dependent Territin) 3). 1.C.1. head office concur.

please inform Kendall

agreement.

Houghing

receipt of Peking's

far the bed Pa

please the still want)

CONFIDENTIAL.

INWARD TELEGRAM

TO THE COMMONWEALTH OFFICE

(The Secretary of State)

FROM HONG KONG (Sir D. Trench)

Cypher

D. 9 June 1967 R. 9

07352

PRIORITY

CONFIDENTIAL

No.805

FESI

Addressed to Foreign Office No.78

(S. of S. please pass)

From Trade Commissioner

Hong Kong telegram No.77 to you.

I.C.I. Money.

Since I sent the above telegram to you and Peking signifying acceptance of your line, Kendall of I.C.I. has reversed engines. He now feels that the Chinese know exactly what finally happened to the money, and that the next time one of his Buropean staff visits China they will be interrogated or detained.

2. Kendall has therefore cabled his London office asking them to return to the charge with you and advocating the tactic outlined in paragraph 4 of my telegram No.74.

3. No doubt you will advise me if you change your instructions. In the meantime I am not repeating this to Peking to save confusion.

(Passed to D.S.A.0. for Foreign Office)

Distribution

P.3.D.

Aid Dept.

DEPARTMENTAL DISTRIBUTION

Copies also sent to:

Foreign Office

Commonwealth Office

FED (Registry) F.E.D. J.R.D.

F.E. and P.D.

Commonwealth Trade Dept.

Financial Policy

Department

CONFIDENTIAL

Cypher/Cat A

HONG KONG TO FOREIGN OFFICE

Telno. 77 9 June 1967

CONFIDENTIAL

کا

RECEIVED IN ¡ARCHIVES No.31

12 JUN 1967

KFC SA

Addressed to Peking telegram No. 324 of 9 June Repeated for information to Foreign Office.

From Trade Commissioner.

Your telegram No. 145 to me and Foreign Office telegram No. 464 to you. I.C.I. Koney.

2. I saw both Kendall of 1.C.I. and Turner of the Hongkong and Shanghai Bank this morning. They both agreed to follow the line laid down in paragraph 4 of Foreign Office telegram under reference.

3. I also emphasised the point brought out in the final sentence of paragraph 1 of your telegram No. 656 to the Foreign Office.

I subsequently heard from the Bank that they had spoken to Splf at noon local time 9 June and had instructed him accordingly.

Trade Commissioner

DEPARTMENTAL DISTRIBUTION

F.0.

0.0.

F.E.D. D.T.D.

D.S.A.0.

Finance Dept. Consular Dept.

Sent 08252/9 June Received 08252/9 June

FPPPP

CONFIDENTIAL

ра

p.a.s

see o

Cypher

CONFIDENTIAL

INWARD TELEGRAM

TO THE COHMONWEALTH OFFICE (The Secretary of State)

FROM HONG KONG (Sir D. Trench)

D. 9 June 1967

H R. 9

0735Z

FC5/4

IMMEDIATE

CONFIDENTIAL

No.803

ра

see 18

Addressed to Peking No. 324

Repeated

Foreign Office No.77

(S. of S. please pass to F.0.)

From Trade Commissioner.

1. Your telegram No.445 to me and Foreign Office telegram No.464 to you.

I.C.I. Money

2. I saw both Kendall of 1.0.1. and Turner of the Hong Kong and Shanghai Bank this morning. They both agreed to follow the line laid down in paragraph 4 or Foreign Office telegram under reference.

3. I also emphasised the point brought out in the final sentence of paragraph 1 of your telegram No.656 to the Foreign office.

4. I subsequently heard from the Bank that they had spoken to Self at noon local time 9 June and had instructed him accordingly.

(Passed to D.3.A.0. for Foreign Office)

Distribution

F.E.D.

Aid Dept.

ARTMENTAL DISTRIBUTION

Copies also sent to:

Foreign Office

FED (Registry)

Foreign Office - F.E.D.

J.R.D.

Commonwealth Office

門

F.E. and P.D.

Commonwealth Trade Dept.

Commonwealth Financial Policy Dept.

CONFIDENTIAL

En Clair

PRIORITY FEKING TO FOREIGN OFFICE

L. HIVED IN (ARCHIVES No.31;

12 JUN 1967

FC5/4

Telnp 661

9 June, 1967

UNCLASSIFIED

Addressed to Hong Kong telegram No.445 of 9 June, Repeated for information to Foreign Office

Foreign Office telegram No.464 to me, paragraph five.

Following for Trade Commissioner.

I agree.

Please telegraph your comments immediate.

Mr. Hopson

DEPARTMENTAL DISTRIBUTION

F.0.

F.E.D.

Consular Dept.

Finance Dept.

C.O.

D.T.D.

88888

Sent 0218z/9 June Recd 08052/9 June

ja see 18

ра

CONFIDENTIAL

FC 5/4

(FED)

CYPHER/CAT A

FOREIGN OFFICE TO PEKING

EDIATE

TELNO. 464

8 JUNE, 1967

CONFIDENTIAL.

ADDRESSED TO PEKING TELEGRAM NUMBER 464 OF 8 JUNE REPEATED FOR INFORMATION TO HONG KONG.

YOUR TELEGRAM NUMBER 650 AND HONG KONG TELEGRAM NUMBER 789 TO

C.O.: 1.C.I. MONEY.

OUR PRELIMINARY REACTION WAS THE SELF SHOULD CONTINUE TO INSIST ON BEING GIVEN FULL DETAILS OF ALLEGED CONTRAVENTIONS (YOUR TELEGRAM TO HONG KONG NUMBER 415) AND NOT RISK INCRIMINATING HIMSELF BY ANY UNNECESSARY ADMISSIONS. I ASSUME YOU NOW JUDGE THAT, AS A STRONG INDICATION HAS BEEN GIVEN BY THE CHINESE AUTHORITIES THAT THERE IS SOMETHING IRREGULAR ABOUT THE 1.C.I. DEPOSIT, A TRANSACTION OF WHICH THE BANK AND THE FIRM HAD THOUGHT THE CHINESE WERE UNAWARE, IT WOULD BE TO HIS DISADVANTAGE TO TRY TO HOLD OUT LONGER WITHOUT SAYING SOMETHING. SINCE THE MATTER WAS REFERRED TO ON THE TELEPHONE TO PETERS, THE CHINESE PRESUMABLY MAY ALSO SUSPECT WE ARE INVOLVED.

2. HODGKIN AND PORTER OF 1.C.1. AND THOMPSON OF THE HONG KONG SHANGHAI BANK WITH WHOM WE HAVE DISCUSSED THE PROBLEM FEEL STRONGLY WE SHOULD ADVISE SELF TO MAKE SOME EARLY RESPONSE. WE ALL GREATLY PREFER SOME COURSE ON THE LINES OF THAT PROPOSED IN PARAGRAPH 7 OF YOUR TELEGRAM UNDER REFERENCE TO THAT IN PARAGRAPH 4 OF THE HONG KONG TELEGRAM WHICH WE FEAR MIGHT INVOLVE SELF IN FURTHER DIFFICULTIES.

3. IF COURSE YOU PROPOSED WERE FOLLOWED PRESUMABLY SELF WOULD INFORM CHINESE HE UNDERSTOOD A DEPOSIT FOR SUM IN QUESTION HAD

BEEN MADE WITH YOU. CHINESE WOULD THEN APPROACH YOU DIRECT OR THROUGH

/ SELF AND

CONFIDENTIAL

pa see 18

ра

CONFIDENT LAL

FOREIGN OFFICE TELEGRAM NO. 464 TO PEKING

-2-

SELF AND YOU WOULD SAY YOUR RECORDS INDICATED RECEIPT OF THAT SUM. IT WOULD THEN BE FOR THE CHINESE TO INDICATE IN WHAT WAY, IF ANY, THIS WAS IN CONTRAVENTION OF THEIR REGULATIONS AND HOW THE BANK SHOULD PROCEED TO CLEAR THE MATTER UP. THERE WOULD BE NO REASON AT THAT STAGE TO VOLUNTEER FURTHER INFORMATION OF OFFER PROOF THAT YOU HELD THE MONEY. IF EVENTUALLY CHINESE DEMONSTRATED THE TRANSACTION BETWEEN 1.C.1. AND THE BANK WAS ILLEGAL AND THAT MONEY WAS FORFEIT TO THEM AND/OR INSISTED THAT IT BE HANDED OVER BEFORE SELF WAS ALLOWED TO LEAVE CHINA, YOU COULD THEN COMPLY AND I.C.I. WOULD REIMBURSE THE FOREIGN OFFICE.

4. YOUR TELEGRAM NUMBER 656 JUST RECEIVED. WE AGREE YOU SHOULD ADVISE SELF AS SUGGESTED BUT CONSIDER THAT IF CHINESE APPROACH EITHER YOU OR KENDALL, YOU SHOULD NOT REPEAT NOT GO BEYOND ACTION SUGGESTED IN PARAGRAPH 3 ABOVE. WE AGREE THAT PETERS SHOULD NOT

BE MENTIONED BY NAME.

5. PROVIDING YOU AND THE 1.C.1. AND BANK REPRESENTATIVES IN HONG

KONG SEE NO OBJECTION PLEASE ACT ACCORDINGLY.

BOSPA

DEPARTMENTAL DISTRIBUTION

F.0.

F.X.D.

CONSULAR DEPT.

FINANCE DEPT.

0.0.

D. T.D.

SENT 16472 8 JUNE

CONFIDENTIAL

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No. de la mare

DEPARTMENT

SECURITY CLASSIFICATION PRIORITY MARKINGS

Top

Restplass

PRIVACY MARKING

In Confidence

-Flash-

Immediate

(Date)

• Date and time (G.M.T.) telegram should

reach addressec(s)

8/6

LILIJOIL

Despatched 4

[Secu

•Security classification] -if any

[

Privacy marking -if any

11..

די .י

CONFIDENTIAL

Peking

----- --..

(date)

S.TIT. PL. SHIP.

.LJILOIJIJI

Hong Kong

Cypher.

Draft Telegram to:-

Peking

No.C. 46.4.

[Codeword-if any]

Addressed to

telegram No.

464

And to

I --------------- AN

(Date) 8/6. repeated for information to

And to:-

INT LILILL

(A BETA brandt beveik kakapokuty

ко

Saving to...

Pla

Repeat to:-

Hong Kong (Immediate)

Saving to: Play C

Distribution:- Departmental

F.0.

F.E.D. Consular

Finance

Copies to

D.T.D.

Your telegram No. 650 and Hong Kong telegram

No. 789 to C.0.:

I.C.I. Money

Our preliminary reation was that SELF should

continue to insist on being given full details

of alleged contraventions (your tel. to Hong Kong

No. 415) and not risk incriminating himself by any

unnecessary admissions. I assume you now judge

that, as a strong indication has been given by

the Chinese authorities that there is something

irregular about the I.C.I. deposit, a transaction

of which the Bank and the firm had thought the Chin-

eae were unaware, it would be to his disadvantage

to try to hold out longer without saying something.

Since the matter was referred to on the telephone

to PETERS, the Chinese presumably may also suspect

we are involved.

/2.

HODGKIN and PORTER of I.C.I. and THOMPSON

of the Hong Kong Shanghai Bank with whom we have

discussed the problem feel strongly we should

advise SELF to make some early response. We all

greatly prefer some course on the lines of that

proposed in paragraph 7 of your telegram under

reference to that in paragraph 4 of the Hong Kong

telegram which we fear might involve SELF in further

difficulties.

3. If course you proposed were followed presum-

ably SELF would inform Chinese he understood a

deposit for sum in question had been made with you.

Chinese would then approach you direct or through

SELF and you would admit the feet say

your

It would

recorde indicated receipt of that sum.

then be for the Chinese to indicate in what way,

this was in contravention of their regulations

if any,

and how the Bank should proceed to clear the

matter up.

There would be no reason at that stage

to volunteer further information or offer proof that

you held the money. If eventually Chinese

demonstrated the transaction between I.C.I. and

the Bank was illegal and that money was forfeit

to them and/or insisted that it be handed over

before SELF was allowed to leave China, you could

then comply and I.C.I. would reimburse the Foreign

Office.

Grateful for your urgent views and Chore of

I-C.I. and Bank representatives in Hong Kong

before any further advice is gives-to-SELF.

H/.

30) D4033246 600m 1/64 0.W‚B Lad Gp $63

NOTHING TO BE WRITTEN IN THIS MARGIN

CONFIDENTIAL

Your

Pelting telegram no. 656 just received.

We agree you should advise Self as suggested

but consider that if Chinese approach either you

or Kendall, you should, simply admit that parcel

not repeat not beyond action

fo sás handdo to Bonk and leave further action tu

Chinese no suggested in paragraph 3 above.

agree that Peters should not be mentioned by

name.

Providing you and the I.C.I. and Bank

representatives in Hong Kong see no objection

please act accordingly.

CONFIDENTIAL

8/6

Ed (1626)

Reference..

Mr. Bonami Braní

To save time, we might

абд

рабадтари

the

Wines

of the attend Draft. A.B.

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Jom Denon

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Ed (1426)

Reference...

The all makes a TEDA

LEAH HITTADES KA KARA PH 1

Calle from foue

Additional paragraph for telepam.

4 leking tetno 656 just received. We

afre

A action consient

suffered

paragraph I

is.

but food that action to enggested in paragraph

int not

2. should not be taken by Kendall, but

that he should, if approached; h simply admit that parcel was

and leave funker op action to Chinese a

paragraph 3. above. Wi

sexperted in bition should not be mentioned by

name.

ари

handra to bank

Heat

La para

ein criginal craft

Providing you

and the I.C. I. and

Bank representatives age in Hung Kung

no objection please act-accord.

accordingly.

B4 (1627)

NOTHING TO BE WRITTEN IN THIS MARGIN

Minutes

RECEIVED IN FARCHIVES No.31

JUN 1967

FC 5/4

Flag A

Согодила

Hong Kong Shanghai Bunkk

in Shanghai

Mr. Self, manager of the Hong Kong | Shangten Bank branch in Shanghon is encountering ditfenition with the Chinese a tout

om 1.C.1. Deposit make in 1964

after 1.C.1's official closure in

china (Peking tel. No. 650]. The sum involves was Yuan 9445.85

earned Degirmarkety in commission.

This sum was

harried oval bu

over

{My

Stewart?

the tum Hong Kerry Bank

in Marghin / to

manage

Britisa Entensy comid

Who

Yone it

Piling where it'

was die bruised

Disbursed to 1.0.1.

repiesmiratives Yo

Cove

Local

buy some

expurns of visitors and

of the expense of the 1.6.1.

Ticntain exhi batman in 1965.

An the moNRA,

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Mul

ben

experint. The Umina anthritis do nos apparently know of

༣

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in the trans within

but ohi Tum

a deponi wa

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made by 1.6.1. Yo the

H.K. Bank.

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(pawn. 7 of that Pel wron

refierno) that in onto to

have the Suf extricate minisuf

we might admit secarving Сизни при 1.6.7. ранил

as fou the M.F.A. and

AIR

Tim

вонить з

10.1. what

be Jone

Whi [K-

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J.C.S.

Chariman in Hong Kong

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(the Bank man

ні

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vin 1962

now Tervin)

in Shangnai now

has proposed max Thu. Kendall,

VI appromimi by the

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spent

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NOTHING TO BE WRITTEN IN THIS MARGIN

[

BA (2029)

Reference

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mw 4 me

A meunang

as at para 4 of H.12. Fu. No. 789 to

Sumard define the moskey,

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clear

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was unwitting.

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meeting

with

Mr. Hodgkin, Dueisen Memager of 1.6.6 in honom, my. Porro 1.6.7. Finsame

Director Hong Kong (on lema) and

Mo. Thompson of the HOR. Burke All

expressio

a string preforme for the course proposed Buy Peting / para. I

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the present atmosphin

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EA (1626)

RECEIVED IN

|ARCHIVES No. 31/ - 9 JUN 1967

FC:

Mr Self manage

atting @ 7.30.

To be Present

Fc. $14

Reference... Fc.

4.R.58.C Shaughan.

M Bolland

Mr. Denen.

Mr. Shawland

Phone Mincing Lens 585.

Сложно (Overseas Managee

)

Mr. Hodgkin

Portar

1.0.1.

"M. Jum

Comutar Dept.

(in leave from to Eafft.

postictive for H.4.0

Mr. Thompson-

A confersion of H.K.S.B. c.

opology for New has been demanded authorities before Ath. Self

enin 1955

dew andid

car

biff has inserted that

allyed emmer.

1. C. 1.

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and

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original demand

в не Chinne produca

and seruild is leking RAND 650

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have today revived a saded

this rubject.

manage from Hongking

1949.

attached

Jhalaw

see 18

Cypher/Cat A

CONFIDENTIAL

IMMEDIATE HONG KONG TO FOREIGN OFFICE

Telno 76

CONFIDENTIAL

8 June 1967

RECEIVED

APCH $12.31

IG COFF

FCSKA

1.". see 18

Addressed to Foreign Office telegram No. 76 of 8 June, Repeated for information to Peking.

1. Hong Kong telegram No. 74: ICI Money.

The Hong Kong Bank Headquarters have again spoken to Self on the telephone. He reported that the Chinese obviously knew that Bowling had handed the parcel to the Bank in Shanghai and that they had handed it to the Consulate. They also appear to know where the money came from originally.

3. Self has been summoned to a further interrogation on

9 June and asked his Headquarters to obtain details from ICI as to how the mone; had been used. Kendall is unwilling to give this information until he knows your views on the matter. Self has therefore been instructed to tell the Chinese at his next interrogation that ICI are looking into the matter.

4. The only optimistic note is that Self's wife has now been given an exit visa.

Trade Commissioner

Sent 09252 8 June

Recd 09272 8 June

DEPARTLENTAL DISTRIBUTION

F.0.

F.E.D.

Commonwealth Trade Dept.

J.R.D.

C.O.

F.E. & P.D.

D.T.D.

NNNNN

Commonwealth Financial Policy

Dept.

CONFIDENTIAL

ADVANCE COPIES SENT

Cypher/Cat A

IMMEDIATE

CONFIDENTIAL

PRKING TO FORBIGN OFFICE

Telno. 656 8 June, 1967

ECEIVED IN ~HIVES No.31.

JUN 1967

FCS/4

CONFIDENTIAL

મ

see

Addressed to Foreign Office telegram No. 656 of 8 June. Repeated for information to: Hong Kong for Trade Commissioner.

Hong Kong telegram No. 789

fa for

[die]:

1.C.I. Money.

In the circumstances I think Manager Self should be advised inform Chinese authorities that his predecessore accepted this private deposit, later handed it over to our office in Shanghai and leave it at that. We could advise Self to this effect by telephone if necessary It would then be up to the Chinese to approach 1.0.1. and/or this office if they wished. approached we should reply on same lines as Ï.C.I. (see para- graph 4 of telegram under reference), Nevertheless I think it important that Peters should not (repeat not) be mentioned by name as the Chinese might take this opportunity to expel him. Will Hong Kong please make this point to [gp.undec. ?Kendall).

Please advise urgently whether you wish us to act

in this way.

Mr. Hopson

Bent 0250z 8 June Rood. 07282 8 June

DEPARTMENTAL DISTR IBIIT TON

2.0.

F.B.D.

Consular Dept.

C.0.

P.E.4 P. Dept.

CONFIDENTAI,

AIWANCE COPIES SENT

Cypher

CONFIDENTIAL

INWARD TELEGRA}!

TO THE COMMONWEALTH OFFICE (The Secretary of State)

FROM HONG KONG (Sir D. Trench)

D. 7 June, 1967. R. 7

; RECEIVED IN ¡ARCHIVES No.31

13 JUN 1987

FC5/4

0950z

ра.

see 18

INKEDIATE CONFIDENTIAL

No. 789.

Addressed to Foreign Office No. 74. Repeated

Peking No. 319. (Please pass IMMEDIATE

to both).

From Trade Commissioner.

Peking telegram No. 650.

I.C.I. Money.

Porter, the local I.C.I. Finance Director, is in England at present and can give you some of the background. He can be contacted through Pacific Department, I.C.I. headquarters.

Bowling, formerly I.C.I. Shanghai manager, is in Hong Kong. He has assured Kendall (local 1.G.I. chairman) that the money amounting to Yuan 9,445.85 was legitimately obtained from commissions received after signing closure documents. The parcel of money was deposited with the bank because the latter were not allowed to open current accounts at the time.

now

3. Local I.C.I. records of the time are sketchy by but Kendall has shown me a letter of May 1964 to First Secretary Ross (then passing through Hong Kong) clearly recording the understanding of 1.0.1. that the money was

the officially obtained, and "is available for our use, general understanding being that it should be used by personnel visiting China".

Lt. As seen from here the most important thing is that Peters in Peking tells the same story to the Chinese as Kendall in Hong Kong. So far Kendall has not heard from the Chinese. Unless you see overriding objection Kendall proposes (if approached) to say:-

(a) that the money was legitimately obtained;

(b) that I.C.I. were genuinely under the impression

that it could legally be used for their expenses in China.

Kendall has also told me that if the Chinese really pressed them, or if self's departure permit revolved around this matter, he would consider recommending to London that

CONFIDENTIAL

/I.C.I.

CONFIDENTIA

I.C.I. should refund the money. If it really came to it, I.C.I. would take this step provided the Chinese recognise the British firm broke the Chinese exchange regulations upwittingly, and provided there was no question of inflated fines and so on.

(Passed as requested)

Distribution

Copies also sent to:-

H.K. WID 'C' Aid Dept.

Foreign Office (Par Eastern Dept.

Mr.

de la Mare

Mr. Bolland

Mr. Wilson

[1]

Mr. Denson

CONFIDENT

En Clair

IMMEDIATE

Telno. 74

UNCLASSIFIED

#F.EIVED IN

[ARCHIVES No.3

- 8 JUN 1967

HONG KONG TO FOREIGN OFFICE-

7 June 1967

FC5/41F

Addressed Foreign Office telegram No. 74 of 7 June, Repeated for information to Peking.

From Trade Commissioner.

Peking telegram No. 650:

I.C.I. Money.

да

Porter, the local I.C.I. Finance Director, is in England at present and can give you some of the background. He can be contacted through Pacific Department, I.C.I. Headquarters.

2. Bowling, formlerly I.C.I. Shanghai Manager, is in Hong Kong. He has assured Kendall (local I.C.I. Chairman) that the money amounting to yuan 9445.85 was legitimately obtained from commissions received after signing closure documents. The parcel of money was deposited with the Bank because the latter were not allowed to open current accounts at the time.

3. Local I.C.I. record of the time are sketchy by now, but Kendall has shown me a letter of May 1964 to First Secretary Ross (then passing through Hong Kong) clearly recording the under- standing of I.C.I. that the money was official obtained, and "is available for our use, the general understanding being that it should be used by personnel visiting China".

As seen from here the most important thing is that Peters in Peking tells the same story to the Chinese as Kendall in Hong Kong. So far Kendall has not heard from the Chinese, Unless you see overriding objection Kendall proposes (if approached) to say:-

(a) That the money was legitimately obtained.

(b) That I.C.I. were genuinely under the impression that it could legally be used for their expenses in China.

5. Kendall has also told me that if the Chinese really pressed them of if Self's departure permit revolved around this matter, he would consider recommending to London that I.C.I. should refund the money. If it really came to it 1.C.I. would take this step provided the Chinese recognize that the British firm broke the Chinese exchange regulations unwittingly, and provided there was no question of inflated fines and. so on.

Yr. Hannam

DEPARTMENTAL DISTRIBUTION

Sent

11452/7 June 1967

Reod.

11552/7 June 1967

ADVANCE COPIES SENT

F.0.

F.E.D.

Consular Dept.

C.O. F.E.P.D.

SSSSS

Cypher/Cat A

CONFIDENTIAL

IMMEDIATE PEKING TO FOREIGN OFFICE

Telno 650 6 June, 1967

CONFIDENTIAL

COPY

see

त

ра

FC5/41

Addressed to Foreign Office telegram No. 650 of 6 June Repeated for information to: Hong Kong (for Political Adviser).

My telegram No. 415 to Hong Kong (No. 619 to Foreign

Office).

Manager Self of the Shanghai Branch of the Hong Kong Bank has had further interviews with the Chinese Customs and although they have refused to give him information about "illegal" actions of the bank, they directed him to look into "Imperial Chemical Industry Deposit".

Self has no records of this but has been told by Mr. Stewart now in retirement in Hong Kong that when he was Manager in Shanghai in 1964, he handed an I.C.I. parcel to the British Officer there.

3. Self asked Peters about this item on the telephone this morning. Peters denied knowledge of this deposit but promised to look in our records.

4. Peters took over from Ross in May 1965 a parcel for I.C.I. and handed it to McBain and Cheetham in September 1965. The parcel contained at that time about 5,000 (five thousand) Yuan which I.C.I. used to help defray local expenses of their Tientsin Exhibition.

5. From 1964 records I see that a sum of 9445.85** had been carried to Peking from Shanghai by one of our Dip- Iomatic Officers and that I.C.I. visitors to China had drawn reasonable amounts from this money towards local expenses in China, It was finally all used up in 1965, the balance being handed over to I.C.I. as detailed in paragraph ↳ abově.

6. I should be grateful if this matter could be urgently discussed both in London and Hong Kong with senior members of I.C.I. Since Chinese know something about arrangement which was a private one between Mr. Buchan of the bank in Shanghai and Mr. Bowling, the last Manager of I.C.I. in Shanghai, we must assume that they know at least how much money was involved.

/7. In

CONFIDENTIAL

Peking telegram No. 650 to Foreign Office

-2-

7. In order to help Manager Self in his problems we may have to admit to having taken custody of the I.C.I. parcel

We at the request of Mr. Stewart of the bank in 1964. might if necessary inform the Ministry of Foreign Affairs and perhaps ask them, on behalf of I.C.I. what should be done with the money, without revealing that it has in fact already been handed over to I.C.I. and spent.

8. I can find no record of these transactions having been fully cleared with you although in a telegram from Hong Kong to Shanghai (No. 2 of 25 February, 1964) repeated to Peking as Foreign Office telegram No. 355 of 25 February there is reference to Consular Department having informed 1.C.I. London that the British Office in Shanghai held a package for I.C.I.

Grateful for your very urgent advice.

Kr. Hopson Sent 08302 6 June, 1967 Recd 1050Z 6 June, 1967

DEPARTMENTAL DISTRIBUTION

F.O. F.E.P.D.

Consular Dept

C.O. F.E. & P.D.

CONFIDENTIAL

bbbbb

ADVANCE COPIES SENT

Cypher/Cat A

FC5/4

CONFIDENTIAL

PRIORITY PEKING TO FOREIGN OFFICE

COPY OF FOLIO Ĉ

Ino 586

26 May, 1967

CONFIDENTIAL

Addressed to Foreign Office telegram No. 586 of 26 May.

Repeated for information to:

Hong Kong.

We have just received a guarded telephone call from Mrs. Self, wife of Manager of Hongkong Bank in Shanghai in which she indicated that her husband and his ohartered bank colleague are being pressed by Chinese to send telegram of protest to Governor of Hong Kong against actions of British authorities. We gather that both banks have been covered with posters and that staff and domestics are on

strike.

We spoke to wives of both managers and they seemed in good heart. We shall be keeping in touch by telephone.

Mr. Hopson

Sent 1300Z 26 May

Read 06122 27 Hy

DEPARTMENTAL DISTRIBUTION

F.O. F.E.D.

Defence Dept. and P.U.S.P.

Consular Dept. News Dept.

C.0. F.E. and P.D.

muuun

D.T.D.

Haughong Bank informed by phone Chatimes back informed by phone.

shantud Bank had just which had taken only Shanghai.

Schlo

ane werk from

Thanks.

CONFIDENTIAL

妙

FC5/4

Reference

N.S

M. Bollafel

thing King and Shanghain Bucking

Corporation.

I agur entirely

antinely with the Live taken

The de la Mark.

ра

pa see

216

Elin Juza

folio 18

Mr. Bolland

CONFIDENTIAL

RECEIVE

ARCHIVEN

JUN 1967

FC5/4

Hongkong and Shanghai Banking Corporation

Shanghai Branch

Mr. Stewart of the Hongkong and Shanghai Bank in London telephoned me this morning to say that Mr. Self, the Bank's Manager in Shanghai, has applied for an Exit Permit to leave the country. He was due to leave anyway and his successor, Kr. D.G. Lachlan, is already in Shanghai.

Then Mr. Self applied for the Exit Permit he was told that he must apologise "for the crimes committed by the Bank since 1949". He has so far not done this. The Bank's headquarters in Hong Kong are seeking the advice of the Political Adviser to the Governor (Mr. Elliott) but Mr. Stewart wanted us also to know of this development.

that if Mr. Self and the Bank

The Chinese

3. I told him that my off-the-cuff view was signed such a document, even under duress, he might get themselves into even more trouble. might then say that since Self had acknowledged the fact of these alleged crimes he himself might be held in Shanghai for further investigation and his Exit Permit might in any case be refused. Alternatively, if he were allowed to leave, the Chinese might take it out on his successor, Mir. Lachlan.

I said that I would get in touch with Peking and with Kr. Elliott in Hong Kong and would keep in close touch with Mr. Stewart, but I strongly advised him to get the most careful legal advice possible from the Bank's own legal advisers as to the possible implications.

5. I have sent a telegram to Peking repeat to Hong Kong.

ве

Tum

(A.J. de la Mare)

31 May, 1967

Copies to: Mr. Rodgers

Ar. Dery 아무

123

Mrs. Denza

Mr. Hall (Commonwealth Office)

turker informater for

information. for. Hk. Filem 723 Piking the both phown to it.

When Shawand th

Ausart.

Now su H.R. Xd. No. 743. Plean

concert reply with C.o. Patung

vite account

CONFIDENTIAL

The above munte.

Jom Dansnow

Cypher/Cat A

CONFIDENTIAL

IMMEDIATE PEKING TO FOREIGN OFFICE

Tel.No. 619

1 June 1967.

RECEIVED IN } ¡AREMIJË, › Noki

-2 JUN 1967

FC5/4

CONFIDENTIAL

Addressed to Hong Kong teleuram No. 115 of 1 June Repeated for information to Boreign Office.

Your telegram No. 290 and Foreign Office telegram No. 429 to me Hongkong Bank in Shanghai,

I spoke to Manager Self this morning who explained that it was the Chinese Customs who had insisted that he should make a statement admitting all contraventions of Chinese law committed by the Hongkong Bank since 1949. I gather he has got this date changed to 1955 and he has asked them for details of offences which the bank is alleged to have committed. But they have so far refused to specify any, insisting that the "confession" must come from him. He offered details of one or two matters which had been brought to the bank's attention by the Bank of China and about which the Chinese authorities therefore already knew, but they said this was not sufficient. He is therefore examining his files to see if there is anything else which he could produce, but this process could take a long time. I have advised him to go on insisting that it is up to the Chinese authorities to give evidence of contraventions if they believe that some have taken place. You will remember that they tried the same trick on Brookfield last year but eventually produced details of the alleged offences.

Meanwhile, Self is in any case not yet in a position to leave as the handover to the new manager has not yet been approved by the Department of Industry and Commerce. He has promised to keep in touch with me and request assistance as necessary.

3. Your paragraph 3. At this stage I do not think we need impute such far-reaching intentions to the Chinese. We are all suffering from pin-pricks and restrictions of various kinds at present, e.g. the China travel service here are refusing to deal with any baggage. They are choosing to make difficulties wherever they can, mainly I think with the object of humiliating us. I doubt whether it would be in the Chinese interest to close the bank down in Shanghai as it is far more useful to them than it is to the Hongkong Bank it- self.

L. Eventually the Chinese Customs may give details of the contraventions which they have in mind and some sort of deal may then be possible as it was in, the case of Brookfield, but all this will take some time, perhaps weeks, and may involve the payment of a fine,

Mr. Hopson

Sent 0345Z/1 June Recd 06252/1 June

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ADVANCE COPIES SENT

Mt Seal of Maryling Bank infamed of got of tile by plowe

16.

Ra.

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FC5/4

PRIORITY FOREIGN OFFICE TO TEKING

429 31 MAY, 1967 (F)

CONFIDENTIAL

ADDRESSED PEKING TELNO 429 OF 31 MAY REPEATED FOR INFORMATION HONG KONG.

YOUR TELNO 586 HONG KONG AND SHANGHAI BANK, SHANGHAI.

HONG KONG AND SHANGHAI BANK LONDON TOLD DE LA MARE TODAY THAT WHEN SELF APPLIED FOR AN EXIT PERMIT HE WAS TOLD THAT HE MUST APOLOGISE FOR THE CRIMES COMMITTED BY THE BANK SINCE 1949''. HE HAD NOT SO FAR DONE THIS AND THE BANK'S HEAD QUARTERS IN HONG KONG WERE SEEKING THE VIEWS OF THE POLITICAL ADVISER TO THE GOVERNOR.

2. DE LA MARE SAID THAT HIS FIRST REACTION WAS THAT IF SELF 50 APOLOGISED, PARTICULARLY IF IN WRITING, HE AND THE BANK MIGHT GET THEMSELVES INTO EVEN MORE TROUBLE, EVEN THOUGH IT WOULD BE CLEAR THAT HIS ''APOLOGY' WAS MADE UNDER DURESS. HE HIMSELF MIGHT BE HELD IN SHANGHAI FOR FURTHER INVESTIGATION AND HIS EXIT PERMIT MIGHT IN ANY CASE BE REFUSED. ALTERNATIVELY THE CHINESE MIGHT SEEK TO EXAMINE" HIS SUCCESSOR, LACHLAN, WHO I UNDERSTAND IS ALREADY IN SHANGHAI.

3. GRATEFUL IF YOU AND POLITICAL ADVISER HONG KONG WOULD TELEGRAPH ANY DEVELOPMENTS, AND YOUR COMMENTS.

SCPA SENT 12522/31 MAY

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ра

[

Registry No.

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Top Speret SeeFor

Confidential

- Restricted-

Un Tassified

PRIORITY MARKINGS

(Date)

Immediese

Rootne

}

De althed

* Date and tune (G.M.T.) telegram should

reach addressee(s)

.וייו

31/5

PHL

NOTHING TO BE Written in THIS MARGIN

11552.

31/5/07

PRIVACY MARKING

In Confidence

En Clai Codex Cypher

Draft Telegram to:-

No.

PEKING

429.

(Date) 31/5

And to:-

Repeat to:-

HONG KONG

شاه

Saving to:-

Distribution: DEPT

FE.

Consular F.E.P.D (CO)

Copies to:-

EXAMINED AT /20.0.1/3//1

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Addressed to

CONFIDENTIAL

...............IITIL-ON -IAMA‒‒‒‒‒‒-----------------------------------Ļı |

PEKING

telegram No.

429

..(date)

And to

repeated for information to

Saving to...

17--11

---------- ----- ----- ---

315

LLIJILLJJ LO

---------------------

POLAD-HONG KONG

---...

--------------` `---`L.....................

-----

--------------------

Ada KANALI- ----- ----- -------------|

Your telegram 586: Hongkong and Shanghai

Bank, Shanghai.

Hongkong and Shanghai Bank London told de la

Mare today that when Self applied for an Exit

Permit he was told that he must apologiee "for the

crimes committed by the Bank since 1949". He

had not so far done this and the Bank's head-

quarters in Hong Kong were seeking the views of

the Political Adviser to the Governor.

2. de la Mare said that his first reaction was

that if Self so apologised, particularly if in

writing, he and the Bank might get themselves into

even more trouble, even though it would be clear that his "apology" was made under duress. Che

Chinese might then say that sincs ke bad neimowledged the fact of these alleged crimed He

himself might be held in Shanghai for further

/investigation

investigation and his Exit Permit might in any

case be refused.

Alternatively the Chinese

might seek to "examine" his successor, Lachlan,

who I understand is already in Shanghai.

Grateful if you and Political Adviser

Hong Kong would telegraph any developments,

your comment.

anch

9/64 G.W.B.LAR OKMI

31/5

NOTHING TO BE WRITTEN IN THIS MARGIN

117

CONFIDENTIAL

INWARD TELEGRAM

TO THE COMMONWEALTH OFFICE (The Secretary of State)

FROM HONG KONG (Sir D. Trench)

REZAN

RECEIVED IN ¡ARCHIVES No.81

- 1 JUN 1967

FCS/4

Cypher

D. 31 May 1967 R. 31 H

09002

IMMEDIATI

CONFIDENTIAL

No.743

pc fox clu

Addressed to Peking No.290

Repeated

Commonwealth Office

(C.O. please pass IMMEDIATE)

Hong Kong and Shanghai Bank here heard from Self, their manager in Shanghai, who is now due to leave, that he was told this morning (31 May) that before his exit visa is granted he must "apologise for all the crimes" committed by the Hong Kong Bank since 1949. He was due to have another meeting this afternoon to discuss the matter.

2. The bank have told him to ask for full details of the alleged "crimes" before saying anything.

3. They speculate that the intentions of the Shanghai authorities may be either:

(a) to try to force the Chairman of the bank

here to make some sort of "confession"; or

(b)

to close the bank's Shanghai Branch down if no admission of guilt is made by the local manager.

The bank would of course be delighted to agree to (b), but do not wish to give the remotest indication of this to the

Chinese.

4. Bank would not wish any action to be taken on Self's behalf until they have further information and are able to assess the situation further. But they (and we) would be most grateful for your views on the points in paragraph 3 above.

Distribution

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I.G.D.

Aid Dept.

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PORITY PEKING TO FOREIGN OFFICE

ino 586

CONFIDENTIAL

26 May, 1967

фото

30 MAY 19:

[FOG/4

Addressed to Foreign Office telegram No. 586 of 26 May.

Repeated for information to:

Hong Kong.

We have just received a guarded telephone call from Mrs. Self, wife of Manager of Hong Kong Bank in Shanghai in which she indicated that her husband and his chartered bank colleague are being pressed by Chinese to send telegram of protest to Governor of Hong Kong against actions of British authorities. We gather that both banks have been covered with posters and that staff and domestics are on strike.

2. We spoke to wives of both managers and they seemed in good heart. We shall be keeping in touch by telephone.

Mr. Hopson

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uuuuu

Sent 1300Z 26 May

Recă 06122 27 Kay

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