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5.

At the present moment the Canton authorities are

showing in various ways a desire to resume more friendly

relations with Hongkong, but there is also a section which is

trying to keep alive the anti-British agitation, mainly, I think,

as a weapon with which to beat their opponents now in power. If

we are to establish a closer contact with those, such as General

Li Chal-sum, who are in a position to assist and protect

British interests we must also be prepared to bring something

to the bargain. As an example of what I mean, I may mention

that after telling Mr. Hu that I sympathized personally with

his government's desire to obtain control of the Chinese

telegraph office in Hongkong, and promising to forward his

request for your favourable consideration, I said that there

was a matter in which I needed his assistance. The Seamen'

Union was again making trouble for the British river steamers

and a political meeting was to be held on the 3. S. "Kinshan"

to-morrow afternoon. We wished to prevent this, as if

successful the movement would again be extended to the other

ships and would lead to a recrudescence of the trouble experienced

by the shipping companies before the recent anti-communist coup

had put a curb on the activities of the labour uniona. Mr. Hu

immediately promised to see General Li Chai-sum and the Chaef

of Police and arrange for police to be stationed near the ship

to prevent the union delegates from staging any demonstration.

It remains to be seen whether this will be done, but unless

the Canton authorities can be persuaded themselves to deal with

such matters, the British steamers are at the mercy of the

Seamen's Union and no amount of naval protection or action

taken in Hongkong is of the least assistance to the@m.

6.

1 have merely mentioned this as an example of the

way/

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