PARAPHRASE TEIEGRAM from the Governor of Hong Kong to the Secretary of State for the Colonies.
(Dated 27th June, 1926.)
I
100
(Received Colonial Office 10.35 a.m. 27th June, 1926.)
Secret.
Canton negotiations. Repeated to
Peking. I have received from Brenan the following
message for the Foreign Office.
"Your telegram No.10 my telegram No.27 I communicated to the Minister of Foreign Affairs on the 16th June the letter from the Governor of Hong Kong quoted in his telegram of the 10th June. I expect the Conference to meet soon if no hitch accurs; in the meantime preliminary correspondence and interviews with Eugene Chen are still proceeding. The Canton Government finde itself in extreme need of funds to meet military expenses particularly those relating to the campaign in Hunan and it is on this account, and not in connection with the boycott, that the railway problem has arisen. In the se circumstances I do not think that the railway problem is suitable for discussion at the Hong Kong-Canton Conference. In the event however of a settlement of the boycott it should be pointed out by the British delegates that unless existing financial obligations such as Canton- Kowloon Railway Loan are respected by Canton Government it will not be possible for financial assistance to be given for the development of Kwangtung."
I concur in the foregoing observations. June 23rd was anniversary of Shameen incident and this in my opinion accounts for the delay since it would have been awkward for Canton delegates to enter into nego- tiations at such a time. As it was, the day was cele- brated in Canton and no untoward event accompanied the
celebrations.
H