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PUBLIC RECORD OFFICE

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PUBLIC RECORD OFFICE, LONDON

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and would not interfere. It may also be mentioned, with referen to my remarks to Messrs. Hu and Wai on the vilification of Hong Kong by the Canton Press, that the Companies' agents during their visit to the police headquarters observed anti-British posters actually being prepared on the premises for use at the commemoration of the Shameen incident on the 23rd June. Protest was, moreover, made personally to General Li Chai-sum by Mr. Brenan, who found a very apt text in the scurrilous pamphlet issued by the Union, which was forwarded to you in my secret despatch of the 21st June.* General Li was, however, obviously disinclined for a trial of strength with the Union at a moment which, being so near the 23rd June, must be admitted to have been inopportune. He did promise to take measures," but Mr. Brenan was unable to feel any confidence in the result. Local Chinese opinion, on the other hand, views the matter as a temporary ebullition which, having been given its way, will die out from lack of support. The Union is itself, however, inviting an early test of its solidarity and popularity. It has issued circulars to all its members at the different ports calling for a conference of repre sentatives at Canton on the 25th or 26th June, with a view to organising a fresh strike, presumably as a protest against the repressive attitude of the Nanking régime towards Labour licence; and it seems likely that a trial of strength will be forced upon the Canton Government at no distant date.

4. The promised communiqué on the visit of Messrs. Hu and Wa has not yet made its appearance; but that need hardly cause surprise. Its text may have been referred to Mr. C. C. Wu at Nanking and in any case the Cantonese authorities would no doubt be reluctant to announce any rapprochement with "Imperialism" until the 23rd June was well past.

5. Meanwhile, a movement of which I have great hopes has been started with the full support of the influential District Watchmen Committee to establish a local seamen's society with its headquarters in Hong Kong and its funds controlled by representatives of the Chinese Chamber of Commerce and the Tung Wah Hospital Commit- tee. This society, which will be entirely non-political in character. is to be a real Trade Union and Benefit Society, and it is expected before long to have 20,000 members. Even more may join later. when the honest application of the new society's funds has been fully tested by experience. Should this society prove a success, it will be a very powerful deterrent to any attempt to re-establish the Canton Seamen's Union which has proved so troublesome in the past. The Colony is much indebted to Mr. Lei Yau-ts'ün (Chinese characters) for the great trouble he has taken over the formation of this society.

6. As a further step towards curbing bolshevik influence in local trade unions, and particularly with a view to preventing the dominance over Hong Kong unions of the "red" elements in Canton, I have caused au ordinance on the lines of the Trades Union Bill now before Parlia- ment to be drafted and published in the Gazette. I enclose a copyt of the Bill, which has received the unanimous approval of the Executive Council and will be introduced and read a first time in the Legislative Council this week.

*C30001/27 C. [No. 26]: not printed

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7. The situation and prospects in the north remain obscure. You will be aware that Marshal Chang Tso-lin has assumed the title of Generalissimo," no -Naval and Military Commander-in-Chief" or

single command a flavour doubt to give his scheme (and last hope) of a

of Sun Yat-schism. But whether this move has any real significance in the struggle between the Kuomintang and its rivals is far from clear. Fighting on the Honan and Shantung fronts has ceased for the time being. This may be due to the necessity for consolidating the Southern gains or, more probably, to the uncertain attitudes of General Fêng Yu-hsiang, who is coquetting both with Hankow and Nanking, and of General Yen Hsi-shan, who is similarly dallying with Peking and Xanking. I enclose a copy of an interesting forecast of the situation furnished to the Hong Kong Police on the 13th June. The first item: has already been fulfilled, Chan Fu-muk having fled to Nanking, and the second (appointment of Ma Tsui-chun) is stated to be a fact.

5. The through trains on the Kowloon-Canton Railway, mentioned in paragraph 6 of my secret despatch of the 9th Junet have proved entirely successful and the managements of the British and Chinese sections have now arranged for a service of two express trains each way daily. I enclose a Press report of the first through trip made with our locomotives and I venture to believe that we can look, not only for genuine amity, but for some degree of real efficiency from the administration of the Chinese section, if it is permitted to function without forced loans and other political interferences.

I enclose translations from the Canton vernacular Press of two articles by Mr. Ng Tsz-tai. Mr. Ng is a very old member of the Kuomintang besides holding the degree of Kui Yan (M.A.) under the old examination system. He has travelled in Europe and is now Political Director on the General Staff of Marshal Tseung Kai-shek. The purport of these effusions is clearly the wickedness of Russia and Communism and the folly of Wong Ching-wai in espousing the cause of the enemies of the Nanking clique. But the argument is obscure to a degree. Like all prominent men in the Kuomintang Mr. Ng has to maintain the sanctity of the party principles and the infallibility of its late President. At the same time there are the cold facts that Sun Yat-sen admitted Communists to the Kuomintang and courted the friendship of Russia, and that armed masses means anarchy. Faced then with the dilemma of representing Sun Yat-sen either as a knave or a fool and his revolution as Communism or no revolution at all (in the ultra-democratic sense of that term), it is small wonder that the spokesmen of the Kuomintang can do little more than envelop their public in a verbal smoke-screen.

10. When, however, all allowances have been made, the anti-foreign tone of Mr. Ng's speech at Nanking on the 9th May is very noteworthy. His account of the pickling in sugar of the Viceroy Ip Ming-sham (Yeh Ming-chin) is a travesty of the facts, for which I may refer you inter alia to pages 502-3 of H. B. Morse's "International Relations of the Chinese Empire: the period of Conflict." Also, his reiterated use of the expression "foreign devils" is intentionally insulting,

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