CO885-11 — Page 73

mmin

།།།།།།།

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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once made the point that this would meet the reinstatement diffi- culty, but it would be some time before they could begin, and so the question of strike pay remained. The suggestion, however. I seemed to make a considerable impression on the Council.'' next mentioned this suggestion to Mr. Sung Tsz-man on the 6th January, and I refer you to the third and fourth paragraphs of my secret despatch of the 7th January.* I also spoke on this subject with Mr. Sun Fo on the 7th January, as recorded in the second paragraph of my secret despatch of the 8th January. There the matter has rested until now; but, upon learning from the two Chinese members of Legislative Council that Mr. Fu Peng-sheung had, at the instance of Mr. Wong Tseng-wai, brought up the question of a loan, I telegraphed to you on the 5th March‡ inquiring whether H.M's Government would agree in principle to such negotiation. I did this, in order that I might know what language to hold in the event of my receiving shortly a visit from Mr. Fu Peng-sheung.

10. You thereupon inquired by telegram. dated 6th March.‡ whether I intended by telegram of the 5th March to supersede the formal protest recommended in my telegram of the 4th I had not March§ and my despatch secret (2)|| of the same date. intended this; but upon receipt of your telegram, I had another conference with Mr. Hallifax, Mr. Kemp and Mr. Tratman. We discussed the matter fully and agreed that it is very important that the formal protest, as previously recommended, should be made as a step in the negotiations with Canton, which may perhaps be resumed if Mr. Fu Peng-sheung visits Hongkong. In paragraph 4 (c) of the joint memorandum you will observe the remark by Sir Shou-son Chow and Dr. Kotewall that, as a result of the strike and boycott, the Hongkong Government would probably lodge a claim against the Canton Government for losses sustained by the Colony. Mr. Fu Peng-sheung replied that, as Great Britain had not recognised the Canton Government, Hongkong should send such a claim to the Peking Government, and his demeanour sug- gested to the two Chinese members of Legislative Council that the Canton Government was ready for this move from us. We. however, consider this move to be necessary on two grounds. In the first place, if negotiations with Canton are formally com- menced, the protest and the claim by this Colony for compensation will serve to counter-balance the Canton Strike Committee's political" and "economic " demands, and so clear the ground for discussion of a settlement on other lines. In the next place, if the Canton Government persists in its refusal to negotiate then our formal protest and the reply, or the failure to reply, of the Canton Government will provide material which H.M's Govern- ment can place before the Powers who are parties to the Wash- ington (Nine Power) Treaty, should action under Article VII of that Treaty be taken. As regards the hint of Mr. Fu that our protest should be made to Peking rather, than to Canton, I

*C3168/268; not printed. + C 3167/26S; not printed. C5318/26S; not printed.

j C 5222/268; not printed. || C7486/268 not printed.

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refer you to Sir R. Macleay's telegram No. 83 of the 1st March,* addressed to the Foreign Office. If the struggle now proceeding between Marshal Wu Pei-fu and his allies against the Kuo-min- chün and the present radical Government in Peking should end in the victory of the former and the formation of a more con- servative coalition government, it is more than probable that the Canton Government would at once proclaim its complete inde- pendence and launch an attack on the coalition from the south. In such an event a formal protest by us to the Peking Government against the continued boycott of Hongkong and the breaches of treaties by the Cantonese would probably elicit a repudiation of their action towards Great Britain, and this would strengthen the hands of H.M's Government in any discussion in regard to the situation in the south in which they may think fit to embark with the other Powers. Meanwhile, at the date on which I am writing, it would appear that even the phantom government hitherto existing at Peking has disappeared and that there is no central government whatsoever in China. Protest in the matter of the anti-Britishi boycott in Kuang-tung can, therefore, only be made at Canton. It is. however, important that this protest should be made at an opportune moment; and, if you approve of the suggested protest, I will take care to choose as favourable an occasion as possible for lodging it.

11. If the Canton Government agrees to initiate formal nego- tiations with this Government, and if the proposed loan is dis- cussed in connection with such negotiations, I should, of course, insist that as a condition precedent to such loan the anti-British boycott must be completely lifted and the Canton Strike Com- mittee's organisation be disbanded. Moreover, in no circum- stances could such a loan be used as Mr. Fu Peng-sheung suggested for paying off the strikers, although the development works constructed by means of the loan would doubtless provide employment for the strikers and permit of their being absorbed into the ordinary life of the Cantonese community without acute indigestion in the body politic. Safeguards and control would be necessary to insure that the money is actually spent on the purposes for which it is lent, and not (for example) on some filibustering expedition under Bolshevik influence against central and northern China. But these are matters which it is useless to elaborate further at this stage: and I will only add that I agree with the remark of Mr. Fu at the close of the third paragraph of the joint memorandum that practical help from Hongkong by way of a development loan to Canton would go far towards re- establishing friendly relations and would undoubtedly be better than monetary payments to the strikers by Hongkong." Action on these lines would also, I believe, be the best means of eliminat- ing Bolshevik influence from the Kuang-tung province.

I have, &c.,

*

* C5111/26; not printed,

C. CLEMENTI,

Governor, &c.

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