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is naturally developing at the last named point, where the Peasants' Army is not only supported by the rem- nants of the Railwaymen's Union, but has at its back Hunan province, the stamping ground of General Tong Sang-chi, where the Hankow clique has permitted prac- tical Bolshevism to work its will on non-proletarians. Forces are being gathered by General Li and placed under the command of General Tsin for a pitched battle with this enemy. The bulk of these troops seem to be coming from Kuangsi and, if they are victorious, Canton will probably have to submit to a fresh term of non- Cantonese control. The latest rumour is, however, to
the effect that General Tong Sang-chi has retreated to Changsha and that Comrades Borodin, Tsui-Him (George Hsü-chien) and Tang Yin-tat have fled to Szechuan. Perhaps, therefore, as has become usual in China, actual fighting may be avoided.
4.. If the strength of the new regime is difficult to appraise, its real policy internal and external is even more so. A press report is enclosed of a proclama- tion by the new Government set up at Nanking by Marshal Tseung Kai-shek. This condemns Communism and in the same breath calls for "co-operation between the people and the army" and "consolidation of organized agricul-
ture and labour". It has, however, been made clear
both by word and deed that Marshal Tseung will not permit organized labour to continue to enforce its will with the knife and pistol. According to a statement in the vernacular press General Pei Ch'ung-hsi, who
holds Shanghai for Marshal Tseung, has informed a meeting of newspaper reporters that armed workers are a menace to the community and enemies of true regolution and that
Enclo No. 5.
they