My Circular D.318 of today. [1]

Following is the text of the replies regarding Hong Kong and the
Burma Road.

2. Stoppage of supplies through Hong Kong
The transit of munitions over the frontier of Hong Kong has in
fact been prohibited since January 1939 and no war materials of
any kind are at present crossing the frontier. In these
circumstances it would seem that the Japanese requirements have
already been met.

3. Stoppage of supplies through Burma
His Majesty's Government have taken note of the views of the
Japanese Government with regard to the transport of arms,
ammunition and supplies via Burma to the National Government of
China.

4. It is true that passage of certain arms and munitions to the
National Government of China does take place via Burma, but the
total figures for 1939 and those for the first five months of 1940
lend no support to the view that this traffic affords any very
material contributions to the armed strength [of] [2] the Chinese
National Government. For some time past the specific war material
from the United Kingdom which was carried over the Burmese route
to China has been insignificant and it is likely to remain so. His
Majesty's Government therefore would find themselves unable to
accept the view that the supply of war materials by Great Britain
to the National Government of China is a direct cause of the
prolongation of hostilities.

5. It is however noted that the Japanese Government in the
communications refer not only to arms and ammunition but also to
fuel oil and petrol, trucks and railway materials. His Majesty's
Government find difficulty in appreciating the basis on which the
request is made to stop passage of these materials, certain of
which are products of Burma itself. In so far as this route is a
legitimate trade route which contributes to the welfare of the
people of Burma and India, His Majesty's Government feel that in
making this request the Japanese Government are asking them to
take action which is inconsistent with their obligations to these
two countries. Moreover the goods which pass over this route to
China emanate from third powers and if serious dislocation is not
to be caused to the trade of those powers it would seem necessary
that any stoppage of supplies should be made at the source.

Compliance with the Japanese Government's request would in effect
involve His Majesty's Government in a departure from neutrality
and would amount to discrimination against China. In strict
neutrality, a request to cut off the materials in question from
China should involve a similar stoppage of supplies to Japan, but
this of course is in no way the intention of His Majesty's
Government.

6. In connection with the Japanese Government's request that the
Burmese route should be closed to traffic to China, it is not
irrelevant to recall that His Majesty's Government have lately
been endeavouring to secure the Japanese Government's assent to
the stoppage of certain materials to Germany with whom the United
Kingdom are explicitly at war. While the Japanese Government have
indicated their willingness, under certain conditions, to arrange
not to re-export to Germany goods which they have purchased from
the British Empire, they have declined to give any assurances in
respect of other Japanese imports and have been unwilling even to
discuss limitation of exports via Siberia of goods produced in
Japan and Manchukuo.

7. For all of these reasons, it will be evident to the Japanese
Government that, were they to press their request, they would
place His Majesty's Government in a position of great
embarrassment. This could not but cause a serious crisis in Anglo-
Japanese relations, and His Majesty's Government are unwilling to
believe that this is in fact the desire [of] the Japanese
Government. His Majesty's Government fully appreciate the anxiety
of the Japanese Government to bring to an end hostilities which
His Majesty's Government have themselves from the outset deplored,
but the closing of the Burma road could at the best furnish only a
partial solution of the problem which the Japanese Government have
set themselves. His Majesty's Government venture to express the
view that only by a just and equitable peace, acceptable to both
parties, will the present unfortunate dispute be terminated and
thus pave the way to a general and constructive settlement which
will bring lasting peace and prosperity to the Far East. His
Majesty's Government for their part are ready and willing to
afford their cc-operation and to enter upon discussions to achieve
this end.