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he and the Russians have now complete control of the city. From a military point of view they are undoubtedly in a very strong position, and it is unfortunate that the Anti-Red leaders are preoccupied with the personal disputes and dissensions which are the invariable accompaniment of military operations in China. The Anti-Red forces remain in occupation of Swatow, the re-capture of which port I reported in 47446 paragraph 7 of my despatch of the 19th September,1925,
and the normal trade with Hongkong is being gradually re-established. I have been informed by H.M. Charge
d'Affaires that General Chan Kwing-ming's activities
have the sanction of the Central Government, and it
is possible that the fact of this backing from
Peking may reconcile certain Generals, notably Lam Fu,
who have been inclined to dispute his authority. I
may mention that two river gun-boats have recently
deserted from Canton and are now in Hongkong harbour,
awaiting General Chan Kwing-ming's orders. There is the usual lack of money and munitions, and as regards money the Reds seem to be at least as badly off as their opponents. Forced loans and compulsory payment of taxes in advance are proving very unpopular
measures in Canton.
While it is quite clear that the Russians under the able leadership of Borodin will continue to do their utmost to compass the ruin of Hongkong. it is possible that it may suit their book to call off the strike and boycott, at least for the time being, in order to rid themselves of the expense and embarrassment of a mass of idle and discontented
labour,
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