7
(3.)
Governor of Hong Kong to the Secretary of State for the Colonies.
(Received Colonial Office, April 15, 1926.)
(Telegraphic.) P.
Secret. Repeated to Peking.
Hong Kong, April 15, 1926,
1. Canton negotiations. Your telegram of 13th April. For the reasons given in paragraph 3 of my secret despatch of 24th December, Hong Kong official opinion is emphatically against any payment of blackmail to the Canton Strike Committee (see also paragraph 8 of my secret despatch of 23rd December).
2. In December last effect of trade loan had not been realised, as issues had only just begun and Chinese merchants in Hong Kong were greatly afraid of financial crash at the Chinese New Year (13th February). There would therefore have been great dissatisfaction among them and consequent loss of confidence in the Government had the latter then refused them permission to negotiate for a settlement by the payment of blackmail to the Strike Committee.
3. The developments since December have, however, altered the position :- (1.) Owing to the attitude of the Canton Government and the Strike Committee the negotiations undertaken by the Chinese merchants broke down (eg my secret despatch of 6th January).
(2.) None the less, as reported in my despatch No. 80 of 23rd February, the
Chinese New Year was safely passed.
(3.) The Strike Committee received a check through the customs incident in
February.
(4.) The committee's position has been further weakened by the recent coup of
Chang Kai-shek.
(5.) The position of the Russians and Communists at Canton has been similarly
shaken.
(6.) The downfall of Bolshevism in China is also foreshadowed by events in
Peking
4. The result is that opinion among Hong Kong Chinese merchants is hardening against payment of blackmail, and they are no longer anxious for a settlement by this means. Great majority of British merchants are opposed to any such payments, an attitude which they have consistently maintained. The view of the Government is that the defeat of the Canton Strike Committee is an essential condition of satisfactory and lasting settlement.
5. Signs are not wanting that the economic unsoundness of the boycott and its inherent artificiality is being increasingly felt in Canton, where it is becoming increasingly inconvenient both to the people and to the Government. Not only is there a movement in Canton to oppose Communism and to expel the Bolsheviks, but the chances appear to be growing of Chinese war lords from the North overthrowing the present régime. I am credibly informed that efforts will be made in the middle of May, when a meeting of the Kuo Min-tang is due to take place, to expel Communists from Canton. If these efforts were to succeed the boycott would automatically be ended, as the Canton Strike Committee is part of the Communist element and would therefore cease to exist.
6. In these circumstances, members of Executive Council, who have expressed their concurrence in the terms of this telegram, unanimously agree with my view that firm adherence to the line taken by Kemp, as reported in my telegram of the 10th April, is likely to yield the best results.
(No. 204.)
(4.)
Sir R. Macleay to Sir Austen Chamberlain.—(Received June 7.)
(Telegraphic.) R.
My telegram No. 203.
Following received from Canton, No. 55 of 5th June-
Peking, June 7, 1926.
I have been informed privately by Minister for Foreign Affairs that h has been instructed by the Government to open negotiations for settlement
boycott and proposes to adopt whichever of the following two courses we prefer :-
C
(a.) Address a letter to the Governor of Hong Kong to be sent through me asking him to appoint official delegates to negotiate with Canton official delegates for settlement of Hong Kong boycott; or
(b) Address a letter to me suggesting that I as the Imperial representa- tive, assisted by Hong Kong officials, negotiate with the Canton delegation for settlement of anti-British trouble throughout the province.
But in either case he desires assurance [beforehand] that a reply will be addressed to him as Minister for Foreign Affairs of Nationalist Govern- ment of Canton. He does not by this imply de jure recognition of Government, but desires same treatment as given to corresponding official in Peking during period of non-recognition.
I presume that this point will not be allowed to stand in the way of a settlement, and I would suggest adoption of the course (b).
In the latter case I would ask for definite instructions regarding claims by British subjects for losses in this province. Is payment of these to be seriously demanded from the Canton Government, in which case they must be dealt with in the negotiations and will indefinitely delay settlement, or are our claims only to be used to offset Chinese claims for deaths in Shameen shooting, &c.?
Minister for Foreign Affairs tells me that Chinese delegation consisting of himself and the Minister of Finance and Minister of Labour will have full powers and negotiate as principals. Intention is to begin afresh, disregarding what has gone before, but he assures me that the Government earnestly desire a mutually satisfactory settlement.
"I respectfully request an early reply."'
(Repeated to Hong Kong and Shanghai for Counsellor.)
(5.)
Governor of Hong Kong to the Secretary of State for the Colonies,
(Received Colonial Office, June 6, 1926.)
Hong Kong, June 6, 1926.
Telegraphic.) P.
Secret. Canton situation. I have informed His Majesty's Minister,
Peking, of the following developments. On the 4th June Brenan was informed by Canton Government had ordered him to open negotiations for the settlement of the Eugene Chen, who is now the Cantonese Minister for Foreign Affairs, that the
boycott. He suggested the following alternative methods of procedure, and said that he was prepared to adopt whichever of the two we preferred:
(1.) Letter to be addressed to consul-general suggesting that negotiations for the settlement of the anti-British boycott in Kwangtung should be opened between the Canton Government and the consul-general, as representative of the Imperial Government, assisted by officials from Hong Kong. (2.) Letter to be addressed to me through consul-general asking me to appoint official delegates to negotiate with official delegates appointed by Canton Government.
Brenan favoured the adoption of (1).
In either case, it was Chen's desire that an assurance should be given to him beforehand that the reply when sent should be addressed to him as Minister for Foreign Affairs of the Nationalist Government of Canton. He said that he only desired the same treatment as was accorded during the period of non-recognition to the corresponding official at Peking, and that he was not out for de jure recognition of the Government.
I informed Brenan, after consultation with Secretary for Chinese Affairs, that- (a) The Hong Kong Government is ready to reopen negotiations with the
Canton Government as soon as possible.
247
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