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because in the nature of things weaknesses which cannot be foreseen only appear under the stress of actual operation in practice. To a great extent, however, the agreement has had the advantageous results which we had hoped from it. Firstly, on the negative side, the agreement is in no way responsible for the conditions which have injured trade on the Middle and Upper Yang-tsze. These are due to the ravages of civil war, which it is wholly out of our power to put a stop to. Had we refused to make the agreement and reoccupied the concession, the full fury of the Nationalist attack would have still been directed against our merchants in Hiankow, and their trade, instead of being merely diminished. might have disappeared altogether. On the positive side, our merchants at Hankow no longer occupy the morally indefensible position of obstinately clinging to privileges which are an unjustifiable anachronism. The tables are turned, and it is the Chinese who, in con- sequence of their folly, graft and inefficiency, occupy the indefensible position. premature to say that the Chen-O'Malley Agreement has failed, and must therefore be abrogated by armed force. There is still a possibility that out of it may be developed a system of municipal government more compatible with modern conditions than the old system, which admittedly could not have been continued indefinitely. In striving for such development, public opinion and all the moral factors are on our side, and this is an advantage which should not be lightly thrown away.
The difficulties encountered at Hankow in carrying out the Chen-O'Malley Agreement have served a useful purpose. They have demonstrated, as nothing else could have demonstrated. to the Chinese themselves that resistance to the extreme claims of the Nationalists is not only justified but absolutely necessary. Nothing else could have served so effectually as the Nationalist failure at Hankow to take the sting out of the Nationalist attack; the object-lesson of Hankow has shown us what are the minimum safeguards that are essential for the preservation of our interests at the vastly more important ports of Tien-tsin and Shanghai and will make it much easier for us to insist on those safeguards being provided when we come to negotiate about the concession and the settlement at those ports.
There is a final, and even more convincing, argument in favour of the policy which was adopted by His Majesty's Government at Hankow. It was the mob violence and the tactics adopted by the extremists at Hankow that rendered necessary the despatch of the Shanghai Defence Force. But unless it could be shown that the purpose of the defence force was really what its name implied-defence, and not aggression there was great danger that the whole of China might rally to the extremist section and the country be swept again by an anti-British boycott, perhaps even more intense than that of 1925. The Chinese would believe that the despatch of the defence force meant a reversal of the policy of the December memorandum, and His Majesty's Government therefore decided, simultaneously with the despatch of troops, to hasten forward with the implementing of that policy. For that reason the memorandum was followed up by the treaty alteration offer, the terms of which were communicated to the Governments in the North and the South at the earliest possible moment. The only course consistent with this line of action was to enter on the Chen-O'Malley negotiations, for if we had refused to negotiate it would have been impossible to dispel the belief that it was our intention to send troops to retake the concession in the spring.
It is not perhaps fully realised how successful this policy has been. There was no hostile reaction anywhere to the despatch of troops, mainly because the Chen- O'Malley negotiations were actually in progress when the troops arrived. So far from there being any recrudescence of the anti-British boycott, there has been a recovery of our trade in Hong Kong and South China, and at the present moment there seems a fair prospect that we may be able to re-establish ourselves on the Upper Yang-tsze. The Hankow concession has assumed in some quarters an importance out of all proportion to its intrinsic merits. It is in no sense à vital British interest, and it has no bearing on the volume of our trade, whether one small section of the whole foreign quarter at Hankow is well administered or corruptly administered, but, even if the Chen-O'Malley Agreement had been as fatal to our interests at Hankow as some critics have appeared to believe, it would still have been wise to make the agreement in order to avert the grave dangers that threatened us.
J. T. PRATT.
Foreign Office, November 1, 1927.
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