CO129-500-3 Canton situation- governor's despatches 29-7-1927 - 1-9-1927 — Page 10

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that the Canton Government must proceed slowly and

cautiously for it still had many enemies. The "reds "

in Kuang-tung had not yet been entirely eliminated;

but the Canton Government had rounded up some of

them last week and intended to continue the good work. He would speak with Mr. Wu Ch'un Lam (**) and General Li Chai-sum (1) in Canton when

he returned, and see what could be done. He wished

that no reference to his visit to me should be made

in the newspapers and said that he had come to Hono

Kong in order to see off his son, who is leaving for

the United States of America, where he is to be

educated. General Li mentioned that he thinks of

acquiring an estate the New Territories, "near Taipo"

(he said), which he would develop as an orchard.

He is in treaty, he said, with General Ngai Pong-p'eng (So Fß Ħ ) for the purchase of the latter's property

in the New Territories.

I gathered the impression that the Canton Govern- ment is waiting to see what happens in northern China before making any overt friendly gesture towards

Hong Kong.