SECRET

Sir,

GOVERNMENT HOUSE.

HONGKONG,

31st July, 1926.

394

It is by no means easy to ascertain the precise nature of the military operations which are now being undertaken by the Canton Government and its allies, for I have practically no source of information except the vernacular press. But it seems that the military situation has changed considerably during July and that this change is modifying the policy of the Canton Government with respect to the anti-British boycott in Kuang-ting.

2.

At the beginning of July there was a rapprochement between Marshals Wu P'ei-fu and Chang Tso-lin and there

appeared to be some prospect of a decisive defeat of the Kuo-min-chün in the north to be followed by the long promised attack by Marshal u upon the Canton Soviet in the south. General T'ang Chi-yao in Yunnan province had pronounced against Bolshevism, and seemed to hage thrown in his lot with Marshal Yu. Even Marshal Sun Ch'uan-fang in Nanking was apparently inclining towards an entente with Mar-

shal Tu. The Canton Government was, therefore, left with the doubtful alliance of Kuang-hsi province and

of General T'ang Shang-chi in Hunan, and the troops of

General

THE RIGHT HONOURABLE

LIEUTENANT COLONEL L.C.K.S. AMRY, M.P.,

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