side of the frontier.
2.
3.
The Director General of the Chinese Maritime Customs is due in Hong Kong on September 22nd to settle with this Government the question of the Customs Agree- ment map.
It is expected that this will be rapidly agreed, and the full agreement brought into force, thus removing a potential cause of friction which the Chinese have not failed to exploit during the last six months.
4.
Anti-K.M.T. elements in Hong Kong have been highly critical of the new Gold Yuan currency, which they describe as an act of looting by the Nanking Govern- ment at the expense of the common people. They forsee that the economic dislocations which the new currency will cause will speed up the economic collapse in China. The drastic measures taken by Chinag Ching kuo against black marketeers in Shanghai have been greeted with some pleasure but left-wing critics have not failed to point out that Chiang's efforts have uncovered the fact that the biggest operators are prominent officials and public personalities. European opinion in Hong Kong is rather disturbed by the social implications of Chiang's compaign against the black market which appears to encourage proletarian unrest and to incite mob violence.
5.
The leftist newspaper "Hwa Shiang Pao" has published the text of the last letter addressed to Marshal .. Li Chai-sum by General Feng Yu-hsiang before his death on a Soviet ship in the Black Sea. The letter, which is full of anti-American criticism and includes some words of praise for Communism, reveals the fact that the Soviet Embassy in the U.S. helpod General Fong to i arrange his journey. It is understood that the text
as published in the "Hwa Shiang Pao omitted one sentence which appeared in the actual letter, in which General Feng asked Marshal Li to send him copies of the "Hwa Shiang Pao" each day c/o the Foreign Affairs Commissairiat, Moscow.
6.
Marshal Là Chai-sum on September 8th, issued a statement on behalf of the K.M.T. Revolutionary Committee condoling with the death of General Feng, and painting a glowing picture of the work of General Feng for "democracy". It ignored the turn-coat history of this typical old- fashioned war-lord. The statement suggested that the K.M.T. Revolutionary Committee were not entirely satisfied about the queer circumstances of General Feng Yu-hsiang's death in a Soviet steamer, and announced that they were investigating further. The "Hwa Shiang Pao" also pub- lished a number of messages of condolence to Feng Yu-hsiangs wife and to Marshal Li from leading Communists such as Mao Tse-Tung, CHU Toh, CHOU En-lai and TUNG Pi-Wu, deploring the loss of this great "Democratic" leader.
17
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Anti-K.M.T. circles in Hong Kong have heralded the establishment of the "Peoples Government" in North China by the Chinese Communists as an encouraging sign of the progress of Democracy, and the "Hwa Shiang Pao" has devoted considerable space to remarks on the subject by prominent anti-K.M.T. personalities such as Marshal Li Chai-sum and General TSAI Ting-Kai (K.M.T. Revolution- ary Committee), SHEN Chun-Ju and CHANG Po-chun of the China Democratic League, and the leaders of other "democratic" groups. Marshal Li still romains very reticent about the proposed Political Consultative Council, which is to discuss a Coalition Government with the Communists. He has confined himself to saying it will need careful preparation, and that it will probably