asked the Prime Minister whether he has any statement to make with regard to the situation in China?

asked the Prime Minister whether he has any statement to make regarding the position in China generally, and in the international settlements in particular; and what steps the Government are taking to safeguard the lives and interests of British subjects in these areas?

Some fighting has been proceeding in Central China in the Han River area, but the general line held by both sides remains the same. The general situation in the International Settlement at Shanghai remains substantially unchanged. There has been no reduction in the numbers of the landing parties at Kulangsu and negotiations for a settlement there continue.

Are the British and American marines still on land at Kulangsu?

Yes, Sir.

Has the right hon. Gentleman any information with regard to the Japanese enterprise at Kalgan and with regard to the two British officers held there?

I have had some recent information on that subject. I understand that the Chinese Secretary to the British Embassy and the British military liaison officer are returning to Peking and were expected to get back there yesterday with the latest news. When I have the latest news, I will communicate it to the hon. Member and to the House.

Has any representation of any kind been made to the Japanese Government?

Yes, Sir. The whole matter has been taken up with the Japanese military authorities.

Sir Nairne Stewart Sandeman:

asked the Prime Minister whether he is aware that the Japanese naval mission at Tsingtao now require landing permits for each separate bill of lading in respect of goods shipped in British vessels; that the cargoes have to be stored for several days on the open wharf, with consequent risk of loss or damage pending the granting of the permits; that no such restrictions are placed on cargoes arriving by Japanese vessels; and whether he will indicate to the Japanese Government that, unless the restrictions on British trade are removed, it may be necessary to impose similar restrictions on Japanese vessels arriving in British ports?

The answer to the first two parts of the question is in the affirmative. Discrimination exists in so far as warehouse accommodation is made available for Japanese ships but not yet for British vessels. The matter has been taken up with the local Japanese authorities at Tsingtao and representations have been made by His Majesty's Ambassador at Tokyo pressing for the allocation of a further berth and/or reasonable warehouse space.

Sir N. Stewart Sandeman:

How long will it be before we know the result of these negotiations?

I hope as short a time as possible.

Mr. J. J. Davidson:

When does the right hon. Gentleman expect a reply to the representation which has been made with regard to this restriction?

I trust that we shall get a reply as soon as possible.

Mr. Davidson:

Have His Majesty's Government stipulated any period of time for a reply?

We have said that we desire an early reply.

asked the Prime Minister whether he will give particulars of the reply received from the Japanese Government to the communication addressed to them by His Majesty's Government relative to the steps that are being taken to safeguard British trade in respect of currency circulated in the Nanking district, which traders generally do not recognise?

As the reply is rather long, I will, with permission, circulate it in the Official Report.

Can the right hon. Gentleman say whether this currency is accepted as legal tender?

I would refer the hon. Member to the statement which I propose to circulate.

Following is the reply received from the Japanese Government:

"The Huahsing Commercial Bank.

1. 1. The new bank is a commercial bank organised under laws of the reformed Government of the Republic of China with authority to issue bank notes, and is not expected to function as a Central Bank.
2. 2. Its capital is 50 million yuan, in new bank notes, fully paid up in foreign currencies.
3. 3. In order to maintain the convertibility of the notes into foreign currency, a reserve in foreign currencies of equal amount to the note issue or more is to be kept.
4. 4. The notes will be additional to and not intended to replace the old legal tender, i.e., no attack on the old legal tender is intended.
5. 5. The bank's notes are to be given the status of legal tender and will be acceptable for payment of all taxes and duties excepting Customs Duties, which will be left as at present.

asked the Prime Minister particulars of the report called for by His Majesty's Government on the fact that the Japanese are endeavouring to create a Japanese monopoly in the trade affecting raw cotton in and around the area of Shanghai?

I would refer the hon. Member to the answer given to my hon. Friend the Member for Salford, South (Mr. Stourton) on 20th December.

In view of that statement may I ask whether the Government are taking any further action?

In view of the fact that some time has elapsed, my Noble Friend is making further inquiries.

asked the Prime Minister if he will satisfy himself that the Japanese, not having declared war against China, are under international law not justified in claiming the right to blockade Chinese ports and make representations to Japan accordingly?

Mr. David Adams:

asked the Prime Minister whether the Japanese are claiming to institute a blockade of Chinese ports; and whether, in that case, we recognise the existence of blockade?

Shortly after the outbreak of hostilities between China and Japan in 1937, the Japanese Government purported to declare a blockade of the whole coast of China, which, however, they stated would be applied exclusively to Chinese vessels. Any attempt to apply such a blockade to the vessels of third Powers would constitute an assertion of belligerent rights and would, in the absence of a state of war between China and Japan, be illegal. His Majesty's Government have already made their views on this matter clear to the Japanese Government.

Do the Government regard the incident of the "Ranpura" as closed on the explanation given by the Japanese Government that they were mistaken as to the identity of the vessel?

We have agreed that our ships may be boarded in case of genuine doubt as to whether a ship is a British ship or not. In the case of the "Ranpura," there could be no doubt whatever. Therefore, we took up a definite attitude and have now received an explanation from the Japanese Government that they made a mistake.

Is that regarded by the Government as a satisfactory explanation?

Yes, Sir, so far as it goes.