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PARAPHRASË TELEGRAM from the Secretary of State for the
Colonies to the Governor of Hong Kong.
(Sent 8.30 p.m., 26th Karch, 1926.)
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Priority. Repeat to Canton and Peking.
Secret. Canton situation. I have been in consultation with Fersion Office regarding your telegram 23rd Earch and what follows is the result of our dis- cussion in the light of your further telegram of the 28th March and of Peking telegrama Nos. 129 and 133.
(1) e do not consider that it would be expedient at this juncture to prosent formally claim for dama/~es, But you may intimate in course of negotiations, if you wish, that is Lajesty's Government are considering such a claim in the event of a settlement not being speedily reached.
There would be no objection to a protest against violation of treaty rights but if such protest is made in the form of a note on lines proposed in your telegram of 4th March it is suggested that
(a) Some chrase such as "Government retually exercising authority in Canton" should be substituted for the term "de facto Government" in paragraph 4. While the latter term is not in ccurate it has been so much canvassed lately that it might seem to imply some further measure of recognition.
(b) Appeal in paragrach. 3 and 3 should be simly to Trention of Nankin· and Tientsin or even te Treaty rights in general and reference should not be made to svecific articles of the Tre ties.
(2) Loan question. The following serious difficulties present themselves.
(i)