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hostile sections of Nationalist China rather than those
directly or in irectly responsible for the outrages,
5. There rmains, however, one possible course
which seems to me worthy of serious consideration,
namely the reoccupation of the Hankow concessien and its
return to British administration, whether exercised
by the military or by a reinstated British Municipal
Council.
6. One advantage of this course is that the action
to be taken concems British interests alone and
could therefore be appropriately taken by His Majesty's
Government acting alone. A further advantage is that
it strikes directly at the prestige and interests
of the faction responsible for the Nanking outrages.
Further, the Japanese have already landed detachments
in their concession and are holding it in force; by
acting now we should be aligming ourselves with them.
7. The reoccupation of the concession would not
imply the abandonment of the policy outlined in my
December memorandum or in the treaty revision offer of
January. His Majesty's Government would be still pre-
pared to negotiate the return of the concession so soon as there appears a government able and willing to carry out its undertakings. Those given by Mr. Chen at the
time of the signature of the Hankow agreement have, how- ever, been flagrantly broken by the forcible occupation of the Chinking concession by Nationelist troops, by the failure to give effective protection at Hankow, Kiukiang and other places and lastly by the Nanking
outrages. I feel therefore that the cancellation of the
agreement/