93
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boycott by a money bargain between the Chinese merchants of Hongkong and the Canton Strike Committee, all Chinese opinion in Hongkong was anxious for a settlement on these lines. If the Hongkong Government had then refused to permit the Chinese merchants to negotiate for a settlement by payment of blackmail to the Canton Strike Committee, there would have been great dis- satisfaction in Hongkong and the Government would have lost the confidence of the Chinese. I therefore decided on the unani- mous advice of Executive Council not to obstruct such a settle- ment, while making it clear that the Hongkong Government could not be a party to the negotiations and that neither Govern- ment funds nor the Trade Loan could be made available for such a payment to the Strike Committee.
4. To-day, I am glad to say, the position is very different. In the first place, the negotiations undertaken by the Chinese mer- chants completely failed, as reported in my secret despatch of the 6th January.* The eight elected representatives of the Hong- kong Chinese merchants received contemptuous treatment in Canton and were told by the Cantonese Press that they ought to be killed, while Mr. C. C. Wu defined the issue not in terms of a bargain for
between Chinese merchants and compensation Chinese labourers, but as a political and patriotic contest with Great Britain in general and the Hongkong Government in par- ticular. Mr. M. K. Lo, one of the eight representatives, wrote on the 2nd January, after his return from Canton:-" If I had known all the circumstances of the recent negotiations,' as I now do, I would have strongly urged against any delegation such as ours coming up, unless and until information has been received from or through the Strike Union that they would negotiate with such delegation, because it was bound to fail, as ours has failed."
5. In the next place the return of Mr. Sun Fo to Canton early in January introduced into the Canton Council of Government an official whose name carried great weight, who was known to be hostile to Bolshevism, and who would be likely to oppose the Canton Strike Committee because it is part of the communistic element in the Kuo-min-tang which he desires to expel from that party. (Please see my secret despatches of 8th January,† 15th Mr. Sun Fo came from Canton to January‡ and 29th March§.) Hongkong by river steamer to-day and he travels to Shanghai to-morrow in the s.s. Empress of Australia," in which vessel Sir James Jamieson is also a passenger. I am credibly informed that the object of Mr. Sun's trip to Shanghai is to endeavour to bring back with him to Canton Mr. T'ang Shao-yi, a distinguished Cantonese official under the Manchu regime and now a leader of the moderate party in the Kuo-min-tang, as well as other promi- nent members of that party, now resident in Shanghai, in order that they may assist in the effort to expel the Communists from Kuang-tung. (Please see paragraph 8 below.)
C. 3924/288; not printed.
* No. 4.
+ C. 3167/28S; not printed.
C. 9518/268; not printed.
1.75
6. Thirdly, the critical period of Chinese New Year passed safely by in spite of strenuous efforts on the part of agitators from Canton to foment another general strike in Hongkong, and the financial settlement among the Hongkong merchants con- tained. no feature to justify the alarm with which it had been anticipated. (Please see my despatch No. 80 of the 23rd February*.) By this time the beneficial effect of the Trade Loan was very evident in mercantile circles and the New Year's Settle- ment in Hongkong compared very favourably with that in Canton. Thenceforward there has been a growing feeling of confidence among the Hongkong Chinese merchants.
7. Fourthly, the Customs' incident at Canton (22nd-26th February) was a severe check to the activities of the Canton Strike Committee, which suffered considerable loss of face" in con- sequence. (Please see my secret despatches of 24th February† and 27th February‡.)
8. Then followed the coup of General Cheung Kai-shek on the 18th March, which has weakened the position of the Canton Strike Committee, of the Communists and of the Russians at Canton. (Please see enclosure No. 2 in my secret despatch of the 6th April§.) The explanation of this coup appears to be that the Communist element which has managed to gain admission into the Kuo-ming-tang at Canton, and of which the Canton Strike Committee is a part, plotted to overthrow the Canton Council of Government and to substitute a dictatorship of the proletariat, thereby making Communism supreme in Kuang-tung. General Cheung Kai-shek was to be offered the dictatorship, if he defi nitely pronounced himself to be a Communist, otherwise he was to be assassinated. This plot was discovered by General Cheung and defeated. He then wished to expel the Russians, suppress the Strike Committee and drive the Communists out of the Kuo- min-tang. He could not, however, persuade the Canton Council of Government to authorise such drastic action, chiefly because Mr. Wong Tseng-wai, Chairman of the Council, was himself a Communist. But the position of Mr. Wong Tseng-wai was so shaken by these events that he has disappeared from the political scene at Canton since then, although still said to be titular Chair- man of the Council of Government. The next trial of strength between Communists and anti-Communists at Canton-is due to take place in the middle of May, when a determined effort will be made at the general meeting of the Kuo-min-tang to expel the Communists. If the effort succeeds the Canton Strike Com- mittee, which is part of the Communist element in the Kuo-min- tang, would ipso facto cease to exist and the anti-British boycott would thus be ended. It is believed that both General Cheung Kai-shek and Mr. Sun Fo are now working with this end in view.
9. Finally, the recent course of events at Peking and north of the Yangtsze appears to foreshadow the downfall of Bolshevism in China. (Please see paragraph 3 of my secret despatch of the
No. 10. + C 7288/265; not printed. § No. 16.
C. 7288/285; not printed.
PUBLIC RECORD OFFICE
Reference :-
C.O.882/11
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