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political.

· 5 -

The communistic element is there, although kept in

the background for the moment. For the time being it is to be

in the main an organization for the prosecution of the war against

Japan by the collection of funds, the provision of recruits and by

incitement to boycott.

(5)

(3) It has acted in almost complete defiance of the

instructions of Government given through the Secretary for Chinese

Affairs. I say "almost" because on one or two occasions the ground has been slightly shifted to give an appearance of compliance. (4) It is receiving monetary support and encouragement from certain sections of the Canton Government and Kuomintang.

It represents the first serious attempt to restore

the situation which existed in Hong Kong between 1920 and the

conclusion of the strike and boycott in 1927. The new Seamen's

Union follows in every particular the pattern of the old one. I am convinced by experience that there can be no dealings with them

on a normal footing and that once they have established themselves

firmly here the reign of terror from which we suffered in previous

years will recur.

The General Labour Union.

The old Union which was proscribed in 1927 was for

It worked for

all purposes the same as the "Strike Committee".

and organised the General Strike and boycott of 1925-1927.

The constitution of the Union now proposed does not

differ in any respect from that of the old one. It will consist

of representatives of all Unions with a Committee which will presumably

be drawn from the Unions which are the prime movers. Most of these

are the same Unions as those which took a lead in the General

Strike and those which are most strongly suspected of racketeering.

In view of the opposition of the Police and of this Department the name of the proposed General Union has been modified

by the inclusion of the words "war relief". That this is little

more than a stalking horse is indicated by a statement made at one

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