CO129-497 - Public Offices - 1926 — Page 243

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watch and report what was being done and it was possible to indulge in anti-British demonstrations with impunity. I will defer my further report on this subject until the conclusion of my return visit to Hongkong.

4. The general situation in Central and North China is very confused. The only certainty is that there is to be another spring and summer of civil war. For the immediate present Shanghai is quiet, but the There future depends on many unforeseeable factors. can be no doubt that, given anything like a fair opportunity, Communist agents will be at work again in Shanghai. If the present military commander Sun Chuang Fang maintains his present attitude, and is also able to remain in power, Red activities will be effectively countered. But should he prove an opportunist, or should hebe unable to maintain his position, the present co-operation between the Chinese and the foreign police may break down and the Chinese city may again become a hotbed of Bolshevik propaganda. Though the Indians residing in Shanghai have not reacted to any noticeable degree to Red propaganda, I consider it desirable to maintain a specially close watch on the situation for some time to come, for which purpose some addition to the existing intelligence personnel will be necessary. As some similar provision will be required at Canton

will make no specific suggestions until I have discussed the matter with the police authorities at

Hongkong.

5. In view of the probability of an extension of Red propaganda in the provinces bordering on Thibet and Central Asia both Shanghai and Peking would be glad to receive from India any information which indicates Russian activity or throws light on

Russian

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