This Document is the Property of His Britannic Majesty's Government, and should be returned to the Foreign Office if not required for official use.]

CHINA.

De cypher.

Acting British Consul General (Canton)

via Hongkong) 12th June 1926.

D.

5.45 p.m.

12th June 1926.

R.

3.40 p.m.

12th June 1926.

No. 25.

XXXXXXXX: X

55

Addressed Peking No. 59,

Following from Mr. O'Malley.

Your telegram No. 203 to Foreign Office and Hongkong telegram to colonial Office of June 10th.

I find the situation less unpromising than in February and attribute this, amongst other things,

to the more aggressive attitude of the navy since

then, coupled with Brenan's way of handling local

authorities. We shall be liable to waste the

advantages already gained by the latter, as well es to spoil our wicket for any stronger action His Majesty's Government might favour in case of fallure of negotiations, unless Brenan is authorised to participate in them and to use reasonable discre tion in consultation with Hongkong delegates to effect settlement.

A settlement of the boycott of Hongkong which left Shamien and Swatow questions unsettled, thus

affording excuse 0. continued existence of strike

organisations, would be unsatisfactory. But

Shamien and Swatow have nothing to do with Hongkong

and could only be dealt with by Brenan. Brenan's

personal qualifications also render his participation,

and/

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