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под on D"

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concerned, the departure of an official whom Mr. Brenan has recently described as "a determined nationalist and

none too friendly to foreigners" can only be a cause for

satisfaction; and if an excuse was required by General Li

for discarding the tool employed to obtain much-needed

cash-in-hand, it was conveniently provided by a vehement

protest from the native bankers and merchants in Shanghai

against the imposition of the communist principle of a capital levy in the very home of the revolution.

2.

In place of Mr. Ku Ying-fan General Li Chai- sum has appointed Mr. Féng Tso-wan (Fung Chuk-man) to the

office of Treasurer. Mr. Fêng, who is a military officer

and was a school-mate of General Li, succeeded the

notorious Chan Fu-muk as Commissioner for Labour after the

anti-communist coup. Prior to that he was chief of staff

to General Hsu Shung-chi, who was Marshal Tseung Kai-shek's

predecessor as Commander-in-Chief of the Kuomintang forces. An attempt on Mr. Fêng's life is recorded in my secret

despatch of 10th August. I am told by the Chinese members

of the Legislative Council that General Li has it in mind

to send Mr. Fêng to pay me a visit in Hong Kong; but so far

no date has been fixed for such a visit.

3.

Concurrently with the appointment of Mr. Fêng Tso-wan to take charge of Cantonese finances, General Li appears to have abolished the Commission system in the Finance Department of his Government, thus placing full power in the hands of a single official. Mr. Fêng

appears to be losing no time in exerting his powers and fresh reports are constantly appearing that stern measures

are being taken with this or that subordinate of the

fallen

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