!
}
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facts of the Shakee-Shameen incident and conducted under terms of reference drawn strictly for this purpose. The Canton delegates, however, clearly intimated at the recent Conference that the Canton Government would not agree to the removal of the boycott as a condition precedent to the proposed enquiry, and there is no reason to suppose that the decision of the Canton Government on this point is likely to be modified. unless its "northern punitive expedition" meets with disaster.
I have endeavoured to give a description of the military situation in South China in my secret despatches dated the 31st July, 2nd August and 6th August. The latest news appears to show that Marshal Vu P'ei-fu is likely to win his battle with the Kuo-min-chun at Nan-k'on in the north and
3.
+
LL
that he may, therefore, be able, before long, to turn his attention to the campaign in Hunan; that Marshal Sun Ch'uan-
fang has at last decided to take the field against the Canton armies for the sake of protecting Kiangsi and Fukien Provinces; that General T'ang Chi-yao from Yurman Province in the west is invading Kuang-hai Brovince; and that General Ch'an
Kweng-mong is planning diversions in the East River valley and in the south of Kuang-tung Brovince. The military
situation seems, therefore, to have taken a turn unfavourable
for the Canton Government, although the result cannot yet be
foreseen; and, if the Canton armies meet with disaster in the field it is probable that the attitude of the Canton Government with respect to the boycott negotiations will become far more conciliatory than it was during the recent Conference at Canton, when Mr. Eugene Ch'en believed his Government to be on the eve of epoch-making victories. Accord- ingly the prudent course for us would be to play a waiting game for at least two or three weeks and to be guided in our further action by the progress of military events.
J
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