Observations by the Deputy Director of Naval Intelligence. (Reference: J.I.C. 94 (draft)). 1. Page 12, line 4, "Minorca" should read "Majorca". 2. I do not altogether agree with paras. 1 and 165. Naval and air blockades of the Spanish Government territory and the China coast were not restricted to the importation of war material. In both cases the blockades were half-hearted, particularly regarding neutral shipping, owing to the fact that a normal state of war was not recognised by neutrals. The Japanese resorted to the wholesale destruction of junks on the China coast, and the Nationalists endeavoured to prevent the entry of all shipping into the Basque ports, even when the ships were "guaranteed" to be free of war material under the nonintervention agreement.