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active and some 17,000 workmen are already on strike
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in the Japanese mills. Further Red successes may easily encourage serious labour outbreak in which we shall be involved as mainly responsible for the policeing of the settlement.
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Repeated to Nanking and Hankow by post. Ends. Liang Shihy1 called on me yesterday and made a similar appeal for assistance for Chang Sun alliance against the Cantonese. He was to return to Tientsin today where he will remain until he goes south on September 24th and he begged for a reply during the intervening ten days.
The situation is undoubtedly critical and the outcome depends on the ability of Sun to prevent domination of the Yangtze valley by Canton extremists. If he is unable to do so, or if, in order to save his position in his own provinces he is compelled to come to terms with the Cantonese and adopt their violently nationalist and anti-British policy we shall be faced with the danger of destruction of our entire commercial position in Central China.
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The most effective and prompt measures for us to take would be to follow the course recommended by the Governor of Hongkong and I am in general agreement with the views expressed by the final paragraphs of his telegram above referred to. I em also of opinion that, in view of the general political situation, direct action against Canton will not
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