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It is our unanimous opinion that:-
(1) The Anti-British boycott is mainly attributable to 'the Red Russians at Canton.
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(2) If the existing situation is to be believed, it is essential that they should be removed.
We are very strongly of opinion that the British Government should take action at Moscow with a view to obtaining the removal from Kwangtung, of all Bolsheviks.
If these suggestions are not practical politics, we cannot think of any other line of action than war with Canton. Unless however, America France and Japan would co-operate (and preferably other maritime Powers too), warlike action would jeopardise future commercial relations between Great Britain and China (and particularly between this Colony and
Canton).
It is our unanimous opinion that, if it is not con- sidered practicable to adopt any of the suggestions which we have put forward, there is no method by which the boycott can be ended except by holding out until the existing Government of Canton either falls by disruption from within or is overthrown by some hostile Chinese General. In this connection I would refer you to my telegram of the 13th of January.
At present therefore the trade loan is our only weapon. Even at the risk of some eventual loss of money by the Government, it is necessary for the loan to be used generously, for the bene- fit of the merchants both British and Chinese) in the Colony.
Sir J. Jamieson and I are in close liaison, and there
is free exchange of information between the Colony and Canton and between Canton and Peking. There will no doubt be a similar exchange of information between the Colonial Office and Foreign Office.
The existing Government at Peking has no authority or influence over affairs in Kwangtung.
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