This Document is the Property of His Britannic Majesty's Government.]
CHINA.
CONFIDENTIAL
[November 1, 1927. j
SECTION 1.
[F 8405/67/10]
No. 1.
Memorandum respecting the Hankow Agreement.
THE fact that the Hankow Agreement has not worked satisfactorily in practice has caused many people to doubt whether the Foreign Office were well advised in the policy which they adopted in regard to the British concession after the Hankow incident of last January. A re-examination of the problem in the light of the events of the past ten months will, it is believed, dispel any such doubts.
In some respects the position last December was essentially the same as it is now. There had long been a wide recognition of the fact that the special privileges enjoyed by foreigners in China-many of them representing accretions on the rights secured by treaty-were not only unjustifiable in themselves, but were to a great extent unnecessary for the primary purpose for which foreigners resorted to China, namely, the carrying on of trade. The view that was taken in the Foreign Office was that it was these superfluous and unnecessary privileges that were the main cause of the attack upon the whole foreign position in China; if they were jettisoned the attack would lose the force which it derived from the universal support of Chinese public opinion, and we should be placed in a much stronger position in which we could, with fair hope of success, defend those privileges that are really vital to our interests such privileges, for example, as the immunity of British ships from arbitrary search or commandeering, and the principle that British subjects are subject only to the jurisdiction of their own courts. This was the policy that was announced in the memorandum of the 18th December, and it was, and still is, the only sound policy to pursue. The memorandum specifically stated that one of the privileges we were prepared to surrender was the exclusive British administration. of the concessions. It was fully realised that a Sino-British administration could not possibly be as efficient as a purely British administration, but it was felt that the sacrifice would be trivial in comparison with the wider objects which we had in view.
Almost immediately after the memorandum was issued the British concession at Hankow was seized by mob violence inspired by the extremists and their Russian advisers, who feared that the ground might be cut from under their feet. His Majesty's Government were then faced with two alternatives. The first was to wait until the return of high water in the spring made it possible to send sufficient forces to Hankow to reoccupy the concession and hold it indefinitely against the mob. Setting aside the military aspect of the question, this course would have meant the abandonment by His Majesty's Government of their declared policy in regard to British concessions almost immediately after they had proclaimed it-an obvious triumph for the Bolsheviks. It would also have placed the British community at Hankow in an even worse position than they are in now. They would have been living protected by a garrison in a small portion of the whole foreign quarter at Hankow, and there would have been no means of protecting their commercial interests outside the concession, which are estimated to be several times as great as those situated inside the concession. It is probable that in such circumstances their trade would have ceased altogether. On the other hand, His Majesty's Government would have been saved from appearing to surrender to mob violence.
The second alternative was for His Majesty's Government to announce that, in spite of this mob violence, they still held by their policy and were prepared to negotiate, not for the absolute return of the concession to exclusive British adminis- tration which had just been declared to be unjustifiable and unnecessary but for the establishment therein of a Sino-British administration under Chinese sovereign control. The decision to adopt the second alternative resulted in the signature of the Chen-O'Malley Agreement.
The critics of this agreement declare that it was a humiliating surrender and that it has proved a complete failure. That view, it is believed, cannot be maintained. Possibly a better agreement in certain details might have been negotiated, but it was inevitable that there should be some weaknesses, partly on account of the cir- cumstances of haste and crisis in which the agreement was negotiated, and partly
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