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Seeing that Canton Government have themselves adopted course (a) contained in your telegram No. 204 and that His Majesty's consul-general at Canton will apparently be a member of the Hong Kong Government delegation rather than act as a separate Imperial representative, there would be no valid ground for regarding his participation in the negotiations as a step towards recognition of the present Canton Government as an independent State.
If in these circumstances you agree, as I trust you will, with the proposed reply, please transmit it direct to Hong Kong, informing the Governor at the same time that you concur in its terms.
(14.)
Sir Austen Chamberlain to Sir R. Macleay (Peking).
(No. 177.) (Telegraphic.)
Foreign Office, June 11, 1926. Following is text referred to in my immediately preceding telegram :—
Your telegram of 10th June.
Subject to concurrence of His Majesty's Minister, Peking, you are authorised to despatch both letters to His Majesty's consul-general, Canton, and we agree to the addition of the consul-general to the Hong Kong delegation at the request of the Hong Kong Government with a view to the settlement of the anti-British boycott throughout Kwangtung and to dealing with any other however, cognate questions which may be raised by the Cantonese. There are, two dangers which we desire to emphasise, firstly, the risk which should be carefully guarded against that steps should be taken which might be interpreted in any quarter as an indication that His Majesty's Government are prepared to recognise the Canton Government as independent. This risk will, however, be lessened if, as we presume, the consul-general acts as a member and not as head of the delegation. Secondly, if the scope of the negotiations be enlarged the number and categories of the claims capable of being put forward on either side is automatically increased. As we see it the position as to these claims is as follows:-
--
1. Against Canton claims for strike pay and compensation for non- reinstatement can be advanced Hong Kong claims for losses due to the boycott.
2. Against Canton claims for Shameen shooting can be advanced British
claims for suffering and losses inflicted on Shameen residents. 3. But over and above these claims His Majesty's Government possess claims against Canton Government för damage to property and persons of British subjects in Kwangtung which are not counter- balanced by any claim from Canton (see Foreign Office telegram to Peking No. 137).
His Majesty's Government, while attaching importance to these claims, is prepared to leave the presentation of them at any time during the forthcoming negotiations entirely to discretion of delegation, whose hands they would not wish to tie beforehand. But it would of course be advantageous if the nature and extent of these claims could be brought to the notice of the Canton Govern- ment at some stage of the negotiations without impairing the prospects of settlement, and if possible before the principle of making a loan to Canton Government is approved."
(No. 218.)
(15.)
Sir R. Macleay to Sir Austen Chamberlain.-(Received June 13.)
(Telegraphic.)
Your telegram No. 176.
Peking, June 13, 1926.
I concur in terms of proposed reply of the Governor of Hong Kong, and I am so informing him, at the same time repeating to him your telegram No. 177.
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There is, however, another aspect of the question, to which I would venture to draw your attention.
I had hoped that in course of time the more moderate and reasonable elements in the extremist group which styles itself the Nationalist Government of China would, after shaking off its Bolshevik yoke, have obtained ascendency, and would have been prepared to reopen direct negotiations with Hong Kong Government over the heads of the Strike Committee. This, however, has not proved the case, since in spite of the rebuff suffered by the Communistic section at a recent convention of General Executive Committee of Kuo Min-chun in Canton, the influence of Borodin and other Soviet agents appears stronger than ever and to be responsible for Eugene Chen's appointment as Minister for Foreign Affairs. I therefore fear that fresh offer to negotiate is solely inspired by the hope that the Hong Kong Government, in their natural desire to end an intolerable situation, will be willing to provide money in the form of a loan which will be used by Canton Government partly to finance military expedition against the north and partly to settle with the strikers,
If consular representative of His Majesty's Government were to participate in any loan negotiations we should surely be departing from our hitherto consistently maintained policy (as recently explained in the House of Commons) of non-interven- tion in China's civil wars and of refusing financial or other support to any Chinese party or individual leader, and we should be breaking this rule in favour of a group of bolshevised extremists who throughout the past year have treated His Majesty's Government and colony of Hong Kong with most violent hostility, with avowed object of lowering British prestige and destroying British trade and vested interests in China. See also my telegram No. 133.
(Repeated to Hong Kong.)
(No. 196.) (Telegraphic.)
(16.)
Sir Austen Chamberlain to Sir R. Macleay (Peking).
Your telegram No. 218: Canton.
Foreign Office, June 17, 1926.
If the only practical way of settling boycott is by a loan we may have to agree in spite of inconsistency pointed out in your telegram, as we consider that the achievement of a settlement of the boycott must be the primary object of our policy. The principle of such a loan had already been endorsed by us within certain limits in approving Colonial Office telegram of 26th March to Hong Kong. We see no reason, therefore, for Mr. Brenan to dissociate himself from loan negotiations if his presence seems otherwise desirable. Within the terms of Colonial Office instructions in my telegram No. 177 he must be guided by his own discretion and the views of the Hong Kong delegates.
Please repeat to Hong Kong and Canton.
(17.)
*Cablegram from the Correspondent of the Chinese Information Bureau in Canton.
Canton, June 25, 1926.
The Canton Foreign Office has communicated the information that, the Hong Kong Government having repeatedly invited the Canton Government to negotiate on the strike question as principal and not as mediator, the Canton Foreign Minister wrote to the Governor of Hong Kong on 5th June that the Canton Government are ready to negotiate with the Hong Kong Government regarding the Canton-Hong Kong strike, and are prepared to appoint three plenipotentiary delegates and the same number of delegates to be appointed by Hong Kong.
On 16th June the British consul-general informed the Canton Foreign Minister that the Governor of Hong Kong could not communicate direct with the Canton Minister owing to the British service rule, and had requested the British consul- general to reply that the strike in Hong Kong has long been a thing of the past." but that he had appointed Kemp and Hallifax to negotiate with the Canton repre- sentatives the "settlement of the anti-British boycott. The British consul-general *Not yet corroborated from official sources.
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