- 5-
44
Enco. No. 1.
bv
illustrated by a document found/the Hong Kong police
concealed on the person of a passenger by river
steamer. This document was in the form of a report
by agents sent to investigate the organization of
the communist party in Western Kwangtung and in
particular in the district of Wan Fau on the Kwangsi
border. The writer describes a mutiny of the
garrison in the district city, its suppression, and
the unsuccessful attempt of the communists to assist
the mutineers. He refers to negotiations for the
"control" of a large body of bandits operating in
that area, and while lamenting the apathy of
"comrades" in certain centres points out that in
others no recruits to the party are forthcoming as
all the eligible candidates have joined the local
brigands. It is, I think, clear that while the
present administration is in no serious danger from
outside attack the internal state of the province
is rapidly deteriorating and the progress made
during the past few years in restoring peace and
order has been succeeded by a retrograde movement.
4.
I enclose an extract from the local
press containing the report of the speech made by
the Chairman of the Board of Directors of the
Hong Kong and Shanghai Banking Corporation at the
annual meeting of Shareholders held in Hong Kong
on the 22nd of February. This speech includes
an interesting review of events during the past year.
5/.