CO129-500-2 Canton situation- governor's despatches 30-6-1927 - 8-11-1927 — Page 10

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the above-mentioned outbreak in the Kiung Chow peninsula. Secondly, he has sanctioned the arrest of the resident

of the Canton Chamber of Commerce and of the head of the

Money-Changers Guild, pending the arrangement of a forced

loan, which is put as high as ten million dollars. The

exact grounds of this drastic step are not clear, but it is

somehow connected with three matters. First, the resistance

of the erchants to the luxury and cash sales stamp-

taxes (see paragraphs 2 - 7 of my last despatch). Secondly,

the run which has been made on the note issue of the (Nationalist) Central Bank of China, in which the money- changers are accused of heavy profiteering. Thirdly, an abortive attempt to obtain a shew of solid business support for the Tariff Autonomy pro rame fixed for today. You will remember that a protest by the merchants of Shanghai was suggested by Mr. C.C. Wu at Nanking as a means of saving the face of his Government in backing out of an impossible

situation. In Canton the resistance of the foreign Powers to this deliberate attack on treaty rights was less felt, and the attitude of the provincial authorities remained stiff until very recently. With a view to maintaining their rôle as a moderate and non-communist administration, and at the same time raising the bogey of popular feeling against the threat of foreign pressure, the Canton Government issued orders for a general parade of merchants and

decoration of shops on the

imposition of a general 12

28th August, advocating the her cent

import tax and the abolition

of likin as from 1st September.

Notwithstanding the

penalties

* No. C 30001/27 D. [No 9]

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