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concerning the trouble has been carefully suppressed. Rumours reached me yesterday of more trouble at Fatshan Canton and an exodus of the families of officials from Canton
to this Colony has begun.
7.
**
12 miles from
If the relief to the note issue is given in
the manner suggested a respite will have been gained, but I venture to emphasize again the necessity for administrative reform in the Province. Without it the revenue can never be placed on a satisfactory footing and as long as financial chaos is allowed to continue so long is there grave danger of another revolutionary outbreak. But auch reform will never be successfully made without the assistance and guidance of honest foreigners. From all sources of information open to me I learn that there is a strong under- -current of unrest in the Province. There is much dissatisfaction with the incompetency and corruption of the Government. There is much disappointment at the ruthless manner in which Yuan Shih-Kai has made himself Dictator, destroying the smallest face-saving semblance of Republican ideals. The whole population is touched in a very susceptible quarter by the increased cost of living consequent on a depreciated currency and by the diminished
volume of trade.
Such a condition cannot last long and when the people again turn on their oppressors it is more than likely that
they will seek to wreak their vengeance not on them alone but on
the foreigners who helped Yuan in the recent rebellion and who
drain the Provinces of much revenue to pay interest on foreign loans. This prospect is probably viewed with equanimity by some Powers which form the Quintuple Group. I venture to suggest, as I had the honour of doing orally to you, Sir, recently in London
that the two parties in the Group - England and Germany - whose
interest it is to see the integrity of China maintained, might
find a common ground of rapprochment in mending such a situation.
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