16912

525

Government in initiating the recent conference was maraly

to prove publicly and beyond all doubt to the Canton Strike Comittee that the Hongkong Government was, and is, resolutely determined not to pay blackmail to the strikers. If so, this object has been achieved, and the Canton Government is not likely to take any further steps unless its "northern punitive expedition" is decisively defeated. Should we, while the military issue is still doubtful, send in our reply

and press for an answer, I expect that Mr. Eugene Ch'ên will merely refer verbally to the third Chinese commique, which

appears on page 15 of the print enclosed in my secret despatch of the 28th July, and which reads:-

"The British delegation inquired whether, pending the holding of the Enquiry, the anti-British boycott was to continue. As the boycott is an organised patriotic movement which no exercise or application of mere force could successfully and finally terminate even if the Nationalist Government were to attempt ita forcible suppression in total disregard of all vital nationalist interests, the Chinese delegation therefore replied that the continuance of the anti-British boycott was inevitable in the circumstances arising from the British delegation's rejection of the Chinese proposal for a sharing of the burden involved in an immediate resumption of normal relations between the British and the Chinese people in the Liang-Kang".

5.

If later on the Cantonese arms triumph, or

if there should be stale mate and the civil war is not fought to a finish, we may then expect a contemptuous refusal of our offer and a tightening of the boycott. We should in that case have gained little or no tactical advantage by replying. If, on the other hand, the Cantonese troops were decisively defeated, the position of the Canton Government might become so precarious that they would accept out offer. In that event the boycott might indeed be lifted; but it would be as the result of internal

disruption

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