CO885-11 — Page 216

PUBLIC RECORD OFFICE

Reference :-

C.O.882/11

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

PUBLIC RECORD OFFICE, LONDON

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3. Two small matters tend to confirm the view that General Li is feeling more safe in the saddle. In the first place, he has been able to detach forces to deal with the above-mentioned outbreak in the Kiung Chow peninsula. Secondly, he has sanctioned the arrest of the President of the Canton Chamber of Commerce and of the head of the Money-Changers' Guild, pending the arrangement of a forced loan, which is put as high as 10 million dollars. The exact grounds of this drastic step are not clear, but it is somehow connected with three matters. First, the resistance of the merchants to the luxury—and cash sales-stamp-taxes (see paragraphs 2-7 of my last despatch*). Secondly, the run which has been made on the note issue of the (Nationalist) Central Bank of China, in which the money-changers are accused of heavy profiteering. Thirdly, an abortive attempt to obtain a show of solid business support for the tariff autonomy programme fixed for to-day. You will remember that a protest by the merchants of Shanghai was suggested by Mr. C. C. Wu at Nanking as a means of saving the face of his Government in backing out of an impossible situation. In Canton the resistance of the foreign Powers to this deliberate attack on treaty rights was less felt, and the attitude of the provincial authorities remained stiff until very recently. With a view to maintaining their rôle as a moderate and non-communist administration, and at the same time raising the bogey of popular feeling against the threat of foreign pressure, the Canton Government issued orders for a general parade of merchants and decoration of shops on the 28th August, advocating the imposition of a general 12 per cent. import tax and the abolition of likin as from 1st September. Notwithstanding the penalties laid down for non-participation, the demonstration was a complete fiasco, presumably because the merchants were well aware that tariff autonomy could not be snatched on that date.

4. I enclose an interesting appreciation of the Canton situationt by a representative of General Ngai Pong-ping, concerning whom please see my secret despatches of 14th and 29th July. You will observe that this representative gathered as far back as 19th August that the tariff autonomy programme would not materialise. Chan Tin-pong, Chairman of the Chamber of Commerce, mentioned in this memorandum, is not the same man as the "president," Wu Chung-tong, whose arrest is. recorded above. The opinion of Mr. Liang Shib-yi, to which reference is made, will be forwarded under cover of a separate despatch.

5. The withdrawal of what may be by courtesy called the Chinese "regular troops "from the British frontier has left the countryside in the hands of the undisciplined Farmers' Corps, with the result that there has been further friction over the use of the path at Sha Tau-kok. I enclose a report of the incident.

6. As I anticipated, the agreement between the river-steamer companies and the Canton Seamen's Union was not regarded by the latter as an amicable settlement of differences between equals, but as a definite victory by Labour over Capital and by Chinese over foreigners. I enclose translationt of an extract from the Canton Press regarding the jubilation of the victors.

No. 21,

+ Not printed.

Nos. 19 and 20,

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7. The tide of immigration has again turned towards the Colony, the total surplus since 21st February being estimated on 21st August at 64,753.

8. I also enclose the undermentioned translations* from vernacular newspapers. They are somewhat out of date, but may be useful as a continuation of the record:-

(a) Précis of an open letter to the Kuomintang by Marshal Tseung, extracted from the Kwok Man San Man, Canton, of 23rd May, 1927.

(b) From the Kwok Man San Man, Canton, of 26th May, con- taining speeches by Marshal Tseung Kai-shek and others at Shanghai. The abuse of the Shanghai Defence Force at its very gates is noteworthy.

(c) From the Kung Sheung Yat Po, Hong Kong, of 30th July, 1927, reporting an attempt by Communiste to distribute circulars attacking Marshal Tseung Kai-shek and General Li Chai-sum.

9. Chinese characters for names in this despatch are given on a separate sheet.

C. 30001/27 E. [No. 3].

No. 23.

I have, etc.,

C. CLEMENTI,

Governor, &c.

The Governor of Hong Kong to the Secretary of State for the Colonies.

(Secret.)

SIR,

(Received 31st October, 1927.)

Government House, Hong Kong, 30th September, 1927.

The anti-British boycott has not materialised. As I anticipated in my secret despatch of the 15th September,t it collapsed on the first touch of real force. This touch was, as you will be aware, supplied by Mr. Brenan, who warned both the Ministry for Foreign Affairs and General Li Chai-sum himself that the British Government would meet any attempt to reinstitute the picket system by prompt and forcible retaliation. The exact nature of the measures proposed was, of course, not indicated; but having before them as object-lessons the reprisals for the piracies of the 8.s. Yatshing and s.s. Ko Chow, the Canton Authorities immediately issued to the so-called Boycott Committee a sharp warning that picketing of British goods would not be per- mitted. A translation of this notification is enclosed. To occidental eyes this document may seem more monitory than minatory, but to its Chinese recipients it is the clearest possible order to leave British trade alone, and it was so interpreted.

2. In this connection it will not be inappropriate to mention a small incident which occurred during the invasion of Swatow by the forces

+ Enclosure 1.

* Not printed. † C. 30001/27 E. [No. 1]: not printed.

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