then went on to suggest that no constructive project could be of greater mutual benefit to the British and Chinese than the suppression of banditry and piracy, and he asked what I thought of a loan to equip a force of armed launches and special troops to deal with these pests.
7. I laughed at this ingenuous proposal, and said that what he had got to realise was that everywhere outside of Canton his Government was regarded more or less as an instrument of Bolshevik intrigue, which was being used in a general attack on capitalist nations, and that the last thing the British authorities intended to do was to assist them with a supply of free money to extend their activities against British institutions and trade to other provinces. I knew that the Cantonese resented this view, and he himself had told me that all they wanted was a bourgeois Government of a comparatively conservative type, but they only had them- selves to blame if they were misunderstood by the world, for their public utterances were all about capitalism, imperialism and revolution and their press was full of Russian propaganda.
8. Therefore, I did not think it at all likely that a project such as he had suggested would be acceptable; in fact, it would certainly give rise to grave suspicion. If a loan were made, it would, I imagined, have to be for some nou- military object in the nature of a revenue-earning public utility, allowing of a reasonable control over expenditure, and providing in itself a security for repayment.
9. Mr. Chen professed to think that this would lead to a deadlock, but said that he would talk the matter over with his colleagues and would continue the con- versation later. He impressed on me that he had been speaking privately and for the sole purpose of clearing the subject in his own mind. He was not yet in a position to conduct even informal negotiations. I replied that I quite understood, and requested that my remarks should be regarded in the same light.
10. Mr. Chen's extreme caution in handling the question is due, I think, to the awkwardness of appearing to ask for a foreign loan whilst denouncing foreign capitalist exploitation. In fact, he said it was going to be difficult to explain. Nevertheless, I have reason to believe that all parties are anxious to reach a settle- ment, and I am reliably informed that the Political Council passed a resolution on the 28th May authorising the Minister for Foreign Affairs to resume negotiations to that end.
11. The 30th May, the anniversary of the shooting in Shanghai, passed off quietly without anti-foreign incident.
I have, &c.
J. F. BRENAN.
1926
70
¥2784/1/10
CIRCULATION
st. U.S. of S.
ern U.S. of S.
ari U.S. of S.
kratury of State.
Previous Paper
FO. 14331.
HONG KONG
DATE
21 July
232
C.14430
22 JUL 1926
Canton Allong Boycott
Irs.
copy desh from Acting British Consul General, Coutur
regarding negotiations for settlement of -
Mr Clatieburt
Mr Beckete
Mr Cluthaback
Mr Bukeli
Sir G. Grindle
MINUTES
2417 20
24/7
24
24
the
Tutly
Subsequent Paper
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