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PUBLIC RECORD OFFICE

Reference :-

C.O.882/11

PUBLIC RECORD OFFICE, LONDON | ALLY WITHOUT PERMISSION OF THE

BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

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5. As regards the shipping position generally it is reported that conditions are not so favourable as they were a week ago, due to picketing by the members of various labour unions, and in consequence of the activities of these pickets British river There is no steamers are finding it difficult to secure labour. change to report concerning the shipping of cargo to and from Piece-goods Canton. Cargo is moving, but in small quantities. are being shipped from Hongkong in moderate quantities by Chinese-owned boats, but it is rumoured that this is to be stopped on the 1st November.

6. One small indication of a more favourable nature is that the operations for the building of Cadet quarters in the British yamen in Canton, which were suspended at the beginning of the strike in June, 1925, have now been recommenced and are apparently being carried on without interference.

7. Generally speaking it may be said that the prospects of any real settlement of the trouble are less bright than they were a week ago. Labour agitators appear to be asserting themselves with little or no restraint from the Canton Government, so that obstacles to trade are increasing. The worst feature of all is the establishment of an inspection corps, ostensibly to collect the surtax which the Canton Government has recently imposed. This corps would appear to be simply a return of the pickets in a legalised form, and under the direct protection of the Canton Government. Everything points, I fear, to the conclusion that, so long as Russian influence retains its hold over the Canton Government, there will be no real return to friendly relations between Canton and Hongkong.

I have, &c.,

C. CLEMENTI,

Governor, &c. P.S.-I attach a copy of the regulations* for the Inspection Corps, together with a copy of a letter from Mr. Eugene Ch'ên to the Consular Body, as published in to-day's South China Morning Post.

C 22760/26.

No. 40.

The Governor of Hongkong to the Secretary of State for the Colonies.

Secret.

SIR,

(Received 10th December, 1926.)

Government House, Hongkong, 5th November, 1926.

In continuation of my secret despatch of the 29th October, ‡ I

• Not reprinted. † Not printed. + No, 39.

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have the honour to report on the developments of the boycott situation during the past week.

2. I enclose a copy of an extract* from the Canton Gazette of the 29th October concerning the arrangements for the collection of the "New domestic production and consumption taxes."

The manager of the railway reports that notices have been posted at Shum Chun station, the terminus of the Chinese section of the Kowloon-Canton Railway, to the effect that a new surtax of 2 per cent, is being levied on all imports and exports and that the tax will be collected, with effect from the 4th November. It is reported that men have been sent down by the Canton Government to Shum Chun to collect the tax.

3. I enclose the statistics* of passengers and cargo carried by the boats of the Hongkong, Canton & Macao Steamboat Com- pany, Limited, for the period 28th October to 2nd November. A comparison with the figures enclosed in my despatch of 29th Octobert will show a marked decline both as regards cargo and passengers, and I understand that since these latest figures were supplied the numbers have fallen still more. The practical cessa- tion of traffic by the boats of the Steamboat Company would appear to be due to intimidation exerted through the Seamen's Union, ostensibly because the Company has not taken back the crews which deserted at the beginning of the strike and has, so far, declined to dismiss those who were taken on to replace them. How far the Seamen's Union is instigated to this course by the Canton Government or by the representatives of the rival ship- ping companies, which are thereby getting all the traffic, it is impossible to say. The Directorate of the Steamboat Company shows signs of a desire to give way to the demands of the Sea- men's Union on the grounds that they are not justified in main- taining the service at a heavy loss having regard to the interests of the shareholders, more particularly as they do not feel that they have been treated fairly in the matter of the losses sustained by them during the period of the boycott. So far, however, they have been dissuaded from compliance with these demands which, in any event, would appear to be dictated by a very shortsighted policy. For they would, by yielding, place themselves entirely in the hands of the Seamen's Union and render it very difficult for them to obtain alternative crews in the future.

4. As regards the Delta generally the volume of British trade seems to be increasing slightly. A report from the Superin- tendent of Imports and Exports shows a somewhat diminished import of foodstuffs and cargo from river ports for the week 28th October to 3rd November, as compared with the figures in the preceding week, whereas there is a small increase in the exports for the corresponding periods.

•

I enclose a copy of a private letter* from Mr. Sutherland, head of the shipping department of Messrs. Jardine, Matheson and Company, giving a general appreciation of the shipping position on the 5th November.

*Not printed.

† No. 89.