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his cruisers from these waters, probably because he has neither money to pay his crews nor ammunition for his guns, and I doubt whether he will be able to give this colony any further help for some time to come.
2. The position in and around Peking appears to be such that the so-called Chief Executive is wholly without power; and no matter what form of Government may be set up at Peking as a result of the conflicts now in progress between the various war lords in the north, it seems certain that the present Canton Government will refuse to recognise its authority.
3. In Shanghai and the provinces at the mouth of the Yang-tsze Marshal Sun Chuan-fang appears at present to be the dominant power, and he is, I am told, at the head of a well-drilled and well-equipped army of about 60,000 men. been informed that Marshal Sun is a native of Fukien Province; that he has been I have much incensed by the advance of the Cantonese Red army under General Cheung Kai-shek north of Swatow to the frontier of the Fukien Province; that he is a determined enemy of the Russian Bolshevik influence in China; that he, like Admiral Li, regards the present de facto Government of Canton as a rebel Government, and that he has expressed his intention of marching southward through Fukien into Kuang-tung in order to overthrow the present Cantonese Soviet Administration. am endeavouring to test the accuracy of this information, but my impression is that no real help can be expected from Marshal Sun as regards Cantonese affairs for a considerable time, if at all.
4. The position at Canton itself is not yet very clear to me. There is no doubt that the present de facto Government is a Soviet of the Russian type with Mr. Wong Tsing-wai as Chairman and Dr. C. C. Wu (a son of the late Mr. Wu Ting-fang) as its principal foreign adviser, while Mr. Sung Tsz-man is in control of financial affairs. I doubt whether any of these three could properly be described as "Red, but they have certainly been under Russian influence; they have been financed with Russian money; Russian military officers have trained their troops, and munitions of war have been supplied to them from Russia vià Vladivostok. members of the Canton Soviet, namely, Mr. Chan Kung-pok and Mr. Tam Peng-shan. At least two are undoubtedly "Red"; and so was Mr. Liu Chung-hoi, who has recently been assassinated. The forces of the Canton Government are mainly under the command of General Cheung Kai-shek, who is said to be a professional soldier and not a politician. I can get no reliable information concerning him, and I do not know how far he is under Bolshevik influence. His troops have certainly been drilled and equipped by Russians.
5. As regards the Russians themselves, there is again no reliable evidence, but I believe the truth to be that they do not exceed 200 in number and may even be as few as 50, and that both their numbers and their influence have of late been steadily decreasing Admiral Basire, who commands the French fleet on this station, told me recently on the authority of the French consul at Canton that a Russian officer recently had a dispute with a Chinese officer in Canton; that in the course of the altercation the Russian put his hand on the Chinaman's shoulder; that the Chinaman thereupon whipped out a revolver and shot the Russian dead; that Borodiu, who is the head of the Bolshevik Mission in Canton, so far from feeling himself strong enough to protest against this act, had been obliged to ignore it. I incline to believe that the Chinese are already heartily sick of their Russian advisers, and would be thankful to get rid of them. that shortly after my arrival I received through Sir James Jamieson a formal I may say in this connection despatch from the Canton Government dated the 2nd November requesting me to expel from Hong Kong Mr. Chan Kwing-ming and Mr. Ngai Pong-peng, who are the avowed enemies of the present Canton Soviet. I replied on the 12th November pointing out that it was the traditional policy of the Hong Kong Government to prevent this colony from being used for political intrigue against the Chinese Government; that I should steadfastly adhere to that policy and expel any who evade it; but that I must first be satisfied that the Canton authorities will reciprocate by refusing to allow the Kuang-tung Province to be used as a base for political intrigue against this colony, and that I should regard the expulsion of the Russian Bolshevik emissaries now in Canton as a proof that the Canton Government is in earnest in this matter. I attach copies of these two letters.* communication on this subject has been received by me from the Canton No further Government.
6. In consequence of the present anti-British boycott in Canton, I found that
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prior to my arrival practically all communication both between this Government and the British consul-general at Canton and also between the British consul-general at Canton and the de facto Government at Canton had been suspended. Sir James Jamieson and Sir Edward Stubbs had not met each other since the outbreak of the trouble in June last, nor had Sir James Jamieson left the Shameen and entered the Chinese city to visit any Cantonese officials since that date. Sir James, in fact, wrote to me that it would be unhealthy for him to do so in view of the fact that he was on the list for assassination. I at once invited Sir James to visit me in Hong Kong, and he was with me at Government House from the 11th to the 19th November. As a result of my conversations with him, it became evident to me that negotiations with the Canton Government could not be carried on by him, and that if such negotiations were to take place I must myself get into direct personal touch with the officers of the de facto Government in Canton.
7.
As a first step I made a speech at the Hong Kong University on the 11th November, which was in effect an offer of friendship to the Canton Government and a suggestion that we should let byegones be byegones, end the boycott, and resume the old amicable relations between Hong Kong and Canton. I attach a copy of this speech.* My next step was to write on the 24th November to Dr. C. C. W inviting him to pay me a visit. He replied on the 26th November that it was impossible for him to leave Canton, but that he hoped I might be able to visit him there. I attach a copy of his reply.*
Meanwhile there had been a certain fraternisation between Cantonese merchants and the Chinese merchants of Hong Kong. A delegation of Cantonese merchants visited Hong Kong on the 20th November and remained here until the 25th November. During that time they were entertained by the Chinese merchants of this colony, by the Hong Kong General Chamber of Commerce, and also by Mr. A. G. M. Fletcher, The result the Acting Colonial Secretary, whom I authorised to receive them at tea.
of this visit was to show very clearly that the Cantonese merchants were as anxious as the Hong Kong merchants to see the end of the boycott; and, although they were not empowered to negotiate any settlement, I took advantage of the occasion of their visit to announce that the Hong Kong Government would be willing to appoint a strong deputation of merchants to visit Canton and to negotiate a settlement provided that the Canton Government would appoint suitable delegates to meet them. The names I mentioned were those of Sir Paul Chater, Messrs. Chow Shou-sen and Kotewall (Chinese members of the Legislative Council), and Mr. D. G. M. Bernard, the head of Messrs. Jardine, Matheson and Co. These names were given to Dr. S. W. Tso, a prominent member of the Chinese community of Hong Kong, for communication to Dr. C. C. Wu, to whom he is related. Dr. Tso returned with the unsatisfactory reply that (a) the strikers would elect three members of their committee to be delegates with full powers to negotiate, one of them almost certainly being the chairman of the Strike Committee; (b) the merchants would also elect one prominent merchant to be a member of the delegation, this would most probably be the chairman of the Canton General Chamber of Commerce; (c) other members of the Strike Committee, probably six, and perhaps one or two additional merchants would be present at the negotiations to watch the proceedings; and (d) that Mr. Luk King-fo, a minor Cantonese official, could be attached to the Canton delegation as secretary. It would obviously have served no useful purpose to send the influential Hong Kong delegates, whom I had named. up to Canton to negotiate a settlement with men such as these, and I therefore cast about for means of starting negotiations upon other lines.
8. On the 2nd December I was informed that Mr. Yeung Sai-ngam, a semi- official emissary of the Canton Government, was anxious to see me. I agreed to see I him and he came informally to visit me at Government House that afternoon, explained to him verbally that the Hong Kong Government was absolutely sincere in its wish for a settlement of the present trouble with Canton, but that it would be useless for me to send a deputation to Canton for the purpose of negotiating a settlement unless the Canton Government appointed delegates of equal standing. I also gave him a personal letter for delivery to Mr. Wong Tsing-wai, presenting him my compliments and informing him that I had had an interesting conversation that day with Mr. Yeung Sai-ngam. This letter was intended to serve as a credential. On the 8th December Mr. Yeung Sai-ngam returned to Hong Kong and brought me a Chinese letter of a complimentary nature in the handwriting of Mr. Wong Tsing-wai and also the draft in Chinese of a letter which it was proposed
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