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12.
As regards recognition of regional governments in China, this is a matter upon which I have already expressed
my views fully in my secret despatch of the 27th June and a similar proposal was also made on the 23rd and 24th June at a meeting in Shanghai by the heads or local managers of all British concerns in China and Hong Kong, with which the members of the China Committee in London are associated, and it was telegraphed from Shanghai to the China Committee on the 28th June. Mr. Bernard, head of the firm of Messrs. Jardine
and Matheson & Company in Hong Kong, and now acting as unofficial member of the Hong Kong Executive Council, was present at this Shanghai meeting as representative of British merchants in Hong Kong. I and my Executive Council fully understand the difficulties involved in the recognition of the present Canton Government and of other regional Governments in China, but we agree in considering those difficulties to be less formidable than are the palpable dangers due to maintaining the fiction that a Central Chinese Government exists at Peking.
13.
The effect of a counter-proposal such as that above suggested will depend very largely on the degree of success or failure attending the Cantonese and their allies in Hunan, But I believe that such a counter-proposal would be very tempt- ing to the present Canton Government and I further think that, if accepted and carried into effect, such a policy would be beneficial to British trade in South China.
14.
This despatch amplifies and confirms my telegrams of the 26th June, which was unanimously approved by the Executive Council.
15.
Since writing the preceding paragraphs, I have received a copy of Sir R. Macleay's telegram No.255, dated the 26th July, addressed to the Foreign Office, stating that
he had received a memorandum from the Jai-chiao-pu in Peking,
dated
\.SI
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