1. Further to my 239 in response to your 166. [1] I have discussed
the position with the British Ambassador. [2] He agrees that
immediate danger is not serious but does not discount the ultimate
danger. So much so that he has arranged with the Commander-in-
Chief of the Pacific Fleet with the approval of the British
Government to send a small naval force possibly consisting of a
cruiser and two destroyers to Shanghai on direct approach from him
or the British Consul-General in Shanghai and the naval force may
bring some arms for local volunteer force in the event of an
emergency.

2. In Nanking there is no protection apart from possible reserve
of arms the American Advisory Group may have. Whilst student and
labour unrest has no anti-foreign bias at present my view is that
in an emergency, reactionary elements in the Government would
attempt to divert Chinese resurgents to traditional attack on
foreigners. In this event it would be necessary for the whole
Legation staff to shelter in one house but we have no protection
other than Chinese police who are unreliable. In addition to two
pistols now held we should have some arms in store for such an
emergency and our Military Attache should be here to keep us in
closer contact with the military and local situation.

3. While I am not apprehensive at present there is no doubt that
the situation is explosive and may ultimately take an ugly turn
against which possibility we should be prepared. I have not
informed the Shanghai Office of these discussions and will not do
so pending your reaction. In the event of real difficulty the
British Ambassador thinks the evacuation of women and children
would be possible by sending a destroyer to Nanking, or flying
boat from Hong Kong. In such an event we would have the co-
operation of the British Embassy. There is no immediate solution
of the Government's difficulties and partial success of its
repression measures may well give it unjustifiable confidence in
the strength of its position.

Despatch 71 being forwarded June 10th deals with these matters and
I should like it brought to the Minister's personal notice.