CO129-502-8 China- general situation 27-4-1927 - 15-9-1927 — Page 221

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hostile sections of Nationalist China rather than those

directly or in irectly responsible for the outrages,

5. There rmains, however, one possible course

which seems to me worthy of serious consideration,

namely the reoccupation of the Hankow concessien and its

return to British administration, whether exercised

by the military or by a reinstated British Municipal

Council.

6. One advantage of this course is that the action

to be taken concems British interests alone and

could therefore be appropriately taken by His Majesty's

Government acting alone. A further advantage is that

it strikes directly at the prestige and interests

of the faction responsible for the Nanking outrages.

Further, the Japanese have already landed detachments

in their concession and are holding it in force; by

acting now we should be aligming ourselves with them.

7. The reoccupation of the concession would not

imply the abandonment of the policy outlined in my

December memorandum or in the treaty revision offer of

January. His Majesty's Government would be still pre-

pared to negotiate the return of the concession so soon as there appears a government able and willing to carry out its undertakings. Those given by Mr. Chen at the

time of the signature of the Hankow agreement have, how- ever, been flagrantly broken by the forcible occupation of the Chinking concession by Nationelist troops, by the failure to give effective protection at Hankow, Kiukiang and other places and lastly by the Nanking

outrages. I feel therefore that the cancellation of the

agreement/