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. PUBLIC RECORD OFFICE

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..........C.O. 882/11

PUBLIC RECORD OFFICE, LONDON

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Mr. Ch'ên opened the proceedings by reading a prepared state- ment tracing the causes of the anti-British boycott through the Shanghai incident of 30th May, 1925, and the Shakee incident of 23rd June, 1925, and referring to the Hongkong embargo on the export of rice, tinned goods and money as the example which had inspired the Canton boycott.

At the end of reading the document, which noticeably was short of mentioning any terms or conditions for the settlement, he indicated that he expected the British delegation to answer his statement before proceeding further.

The Consul-General replied that it was impossible to answer at once; there must be time for consideration, and, in any event, the matter had been so thoroughly canvassed by both sides that Mr. Ch'ên must know the answer that would be given.

Mr. Ch'ên replied that it is still necessary to clear this obstacle out of the way of negotiations and to have a thorough under- standing of the origins of the trouble so as to know how to deal with it. He very freely used the simile of the malady, the doctor and the knife. Mr. Kemp failed to see how reference to the his- Mr. Ch❜ên torical causes would assist in settling the boycott. returned at some length to his medical simile, to which Mr. Kemp replied that there were two possibilities: either we agreed entirely One with his diagnosis of the malady, or that we disagreed. would like to know what remedy Mr. Ch'en proposed if we agreed, and one would like to know if the remedy, which he would propose, would be the same in the event of disagreeing. Mr. Ch'en agreed that the question was pertinent; but managed to evade it, and returned to his simile of the malady.

As there seemed no alternative, the Consul-General suggested that Mr. Ch'ên's statement should not be published before it had been replied to. Mr. Ch'en, in reply, gave quite a dissertation on publicity and the attitude of his public, which demanded it. The point then arose of the extent to which publicity was desirable. The Consul-General pointed out that the publication of such state- ments as Mr. Ch'ên's speech, and our reply would be sure to arouse much popular feeling and cause much discussion in the Chinese and English Press. This would mean that the negotia- tion would be taken out of the hands of the delegates. Such a result also might cause great embarrassment both to the British delegation and the Chinese delegation; therefore, the Consul- General suggested that only short agreed communiqués should be published.

Mr. Ch'ên then referred to this proposal of the Consul-General as the old diplomacy, and expressed the view that the time for that was gone, and that the new diplomacy must be followed. The "' new Consul-General pointed out that what is called the diplomacy " had never been adopted anywhere. Mr. Ch'ên was left to make the conclusion that we could have no hard-and-fast rule, and that in this case there would be no publication of his statement, at least until after a reply had been made.

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Mr. Ch'en raised the question of the proper title for the Confer- ence in communiqués. The discussion at the moment was incon- clusive; but in his draft communiqué of the morning's meeting he wrote: "Conference for the settlement of Chinese and British Disputes in the Liang-kuang," which seems adequate.

The Conference then adjourned until Monday, the 19th July.

ENCLOSURE 4 IN NO. 27.

In accordance with what are doubtless the wishes of the British delegation, we propose to begin consideration of the anti-British trouble in the Liang-kuang by first concentrating attention on the aspect of it which has found expression in the anti-British boycott. What is this boycott? Ignoring mere details or purely acci- dental features, it consists essentially in Chinese workers refusing to load or unload British ships, and in the Chinese people in our territory refusing to buy or deal in British goods, or to sell goods to the British. It is admitted that the boycott is an organised patriotic movement which has been sustained by the Chinese people in South China for more than a year.

If the anti-British boycott is to be settled and not simply sup- pressed by force and so transformed into an enduring element in Chinese-British relations throughout China, it is necessary to find out, at least, its direct and immediate cause. In homely phrase. a malady is cured by treating its cause.

The anti-British boycott in its typical form began immediately after the events of 23rd June, 1925, off the Shameen. And none with the sense of causation can possibly doubt that the boycott was the first direct and immediate outcome of the killing and maiming of Chinese students and others on that fateful day. If, therefore, the anti-British boycott is to be terminated by a negotiated settlement, we 'must first deal with the transaction of 23rd June, 1925.

Broadly speaking, the material facts of the case are not in real dispute save one, namely, whether the British or the Chinese fired the first shot. But even this point becomes of secondary import- ance when the entire incident is examined from the standpoint of juridical responsibility. Such an examination leads us first to a brief review of what may be called the causal background out of which sprang the tragedy of 23rd June.

It is a historical fact that the Chinese people as a whole. were powerfully stirred by Sergeant Everson's order to his men to shoot to kill" the Chinese students and others who demon- strated at Shanghai on 30th May, 1925. In China, as elsewhere, school-boys and girls of to-day are the rulers and workers of to- morrow, and a nation is necessarily interested in its student class. There is also a special reason why the Chinese people are inter- ested in their students. A nation that is not dying must have an