CO129-489 - Governor Sir Stubbs & Sir Clementi - 1925 [8-12] — Page 133

5.

The financial position is becoming day more serious. The Colony's revenue is rapidly decreasing, and, if the present deadlock continues for any length of time, it is difficult to see how the heavy commitments already entered upon are to be met. Expenditure is being cut down wherever possible, and no new obligations are being undertaken. News was received yesterday of the assassination in Canton of Liu Chung-hoi, the Treasurer of the new Administration, a man of very considerable ability, who has exercised an immense influence in furthering the cause of Bolshevism. There have been of late distinct signs of a movement of revolt against the Bolshevist faction with its Russian leaders and Whampoa trained troops enlisted in North China, and it is just possible that the removal of this man may hearten the better elements among the Cantonese to take the steps necessary to put their house in order. Certain local Chinese are fn fairly close touch with the Anti-Red leaders in Canton, who appear to be considerably more optimistic than was the case a week or two ago, but it is difficult to see how they are to prevail against men who are so far superior in training and equipment, unless they receive assistame from outside.

I have the honour to be,

Sir,

Your most obedient humble servant,

7.2. Statts

Governor,

&c.