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ENCLOSURE No.1.

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Sir,

Government House,

Hongkong, 24th August, 1926.

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I had the honour of conferring with you at Government House concerning the Canton situation

on the 9th and 21st August. On the former occasion

there were also present Lajor-General C.C. Luard,

Mr. J.F. Brenan (His Majesty's Consul-General at Canton), Ir. V.T. Southorn (the Colonial Secretary),

Commander J.U.P. Fitzgerald (Senior Naval Officer,

Test River) and Hajor R.D. Bennett (General Staff

Officer, China Command). On the latter occasion there

were also present Major-General Luard, Hr. Brenan, Hr.

Southorn, Mr. E.D.C. Wolfe (Captain Superintendent of Police), Mr. E.R. Hallifax (Secretary for Chinese Affairs) and Mr. J.H. Kemp (Attorney General).

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It was the unanimous opinion of both conferences that the anti-British boycott at Canton is likely to continue indefinitely with increasing damage to British trade and prestige unless action more drastic than hitherto is taken against the Strike Pickets, who alone benefit by the continuance of the boycott, and who are in fact an organised band of pirates and brigands, hated by the Cantonese merchants and feared by the Canton

Government.

3.

Co mander Fitzgerald has satisfied himself that it would be a practicable step with the ships at

his disposal to seize all Strike Picket boats and boats

used

REAR-AILIRAL A. J. B. STIKLING, C.B.

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