CO129-498-3 Canton boycott- prospects of restoring normal conditions 20-12-1925 - 24-12-1925 — Page 6

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of the resulting animosity throughout China towards

Great Britain. The time is past when it was possible

for foreign nations at the point of the bayonet to compel the Chinese to trade with them:

and our

commercial rivals in the Far East are not slow to

take advantage of any hostility displayed by the Chinese towards British merchants in China. At present

as far as I can ascertain most of the eighteen Provinces are looking askance at the doings of the Canton

Government as at the antics of a naughty child. But,

if Great Britain were forcibly to coerce the Canton

that Government it is almost certain all Chinese opinion

would be united in its support.

5.

A

I am driven, therefore, to conclude that

without payment to the Strike Committee there can be

no settlement of the boycott and that and that the present unfortunate situation instead of improving will grow worse. The 12th February next will be Chinese New Years Day and before that day it is custo

tomary

for every Chinese business in Hongkong and elsewhere to settle all outstanding accounts. Unless a settlement of the boycott is made by an early date in January next, it is probable that there will be acute financial trouble among the Hongkong Chinese; and, although I should use the trade loan as far as possible to save any reputable business from bankruptcy, the trouble might possibly be too wide-spread to be successfully alleviated by such means. I need not say that such a crisis would be direct encouragement

to to the Strike Committee and to the Bolsheviks tighten their strangle-hold on Hongkong and to demend terms of settlement more extravagant than are likely

to be put forward at present.

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