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honourable and peaceful settlement; for it is at a moment of uncertainty, like the present, that the Canton Government is likely to be most ready to come to terms.
5. For my own part, I have always been in favour of trying to make agreements on specific subjects with regional authorities, and I would refer to my telegram to the Foreign Office, No. 59 of the 2nd December, 1926, my semi-official letter to Mr. Teichman of the 28th February, and my telegram to Peking No. 71 of the 29th August, 1927. There are no other than regional authorities in China, nor in all probability will there be during the lifetime of any living person and perhaps long after. If, therefore, we wish to settle our affairs in China by agreement, we must negotiate with regional authorities, for there is no one else. The alternative is either a large-scale war with China to re-establish a position which the Chinese reject, or else to have what remains of our treaty privileges gradually obliterated to an accompaniment of protests, threats and an occasional show of armed force on our part, and, on the part of the Chinese, irritation, ill-will, agitation and boycotts. The Chinese are ingenious in their expedients for exasperating the foreigner, and will soon wear us down at that game, but should they find that the process is unduly protracted, there is always the danger that they will revert to other measures, which have recently proved effective so far as foreigners are concerned.
6. The Communists and their Russian allies have suffered a severe defeat in China. Every faction denounces them, and here, in revolutionary Canton, numbers of them have been executed and the rest are in hiding. On the 7th November, the Russian national day, the Soviet consul-general was arrested and detained on his way to attend a Communist meeting, which had been proscribed by the police. But the Communists may well say that they are the only party which has got the Chinese anywhere along the road to independence. We know that they were the driving force inside the Kuo Min-tang during the anti-foreign campaign, which involved the boycott and blockade of Hong Kong, and culminated in the sweep to the Yang-tsze, with the capture of Hankow and Shanghai. To their forceful methods are due the recovery of the Hankow, Kiukiang and Chinkiang concessions and the rapid development of a conciliatory policy on the part of His Majesty's Government, as embodied in the memoranda of the 18th December, 1926, and the 27th January, 1927. It is also becoming apparent to thoughtful Chinese that with the elimination of the Communists all progress towards the recovery of sovereign rights has come to an abrupt stop, and that the attitude of the Powers is again hardening towards the political demands of this country.
7. Sir Frederick Whyte, the leader of the British delegation to the Honolulu Pacific Conference, stayed with me recently, and during his visit he gave a lecture to the students of the Lingnam University on present British policy in China. He set out that policy in a sympathetic light, and made full use of Sir Austen Chamber¬ lain's memoranda and speeches to show the friendly attitude of the British Govern- ment and people towards the Chinese, and their wish to assist the latter in the attainment of their ideals. After his lecture he invited the students to ask him questions if they desired further information.
8. One of them asked him what it was that had suddenly decided the British Government to adopt this conciliatory attitude towards the Nationalist party. Sir Frederick replied as best he could, but he was not convincing, Another student said that Sir Austen Chamberlain's friendly sentiments were much appreciated, but could Sir Frederick tell the meeting what exactly had been done so far to give practical effect to them? The lecturer referred to the rendition of the Hankow and Kiukiang concessions, and to the negotiations for the return of the Tien-tsin concession, to which the rejoinder was made by several students that we had been forced to give up Hankow and Kiukiang, and the only reason we did not take them back was that we did not think it worth while from a military and commercial point Another student of view. Tien-tsin, they pointed out, had not yet been returned. from Shantung heckled Sir Frederick on the subject of Weihaiwei, and maintained that the Peking Government had not dared to ratify the agreement for the return of that place because we were not returning it as promised, but were in fact retaining territorial rights there in derogation of China's sovereignty of a nature that the These students, many of them people of Shantung refused to tolerate. And so on.
of mature age, were not personally unfriendly, and they received Sir Frederick and political myself with great hospitality, but it was evident that they felt hotly on questions, and were of the opinion that the only way to obtain concessions from the Powers was to fight for them.
I do not wish to exaggerate its
9. So much for the student attitude.
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importance, but, as you know, the students in China have had a larger influence in moulding public opinion on foreign affairs than any other section of the popula- tion, and have, on occasion, terrified the mercantile and official classes into carrying out their wishes in a manner unbelievable to those who have not seen it done. It will therefore be of interest and importance to you to know how the educated and moderate Chinese feel about the situation in South China, and, so far as I can see, you are not likely to learn it from Hong Kong or Shanghai.
10. Shortly after the anti-Communist drive in April last, I had a conversation with Mr. Ku Ying-fen, then Minister of Finance in the Nanking Government and a member of the right wing of the Kuo Min-tang. After expressing a desire for more friendly foreign relations, he emphasised that this did not mean any abandonment of the programme for the recovery of sovereign rights. The demand for equality and independence was now nation-wide, and could not be suppressed. If, he said, the Powers made it impossible for the Kuo Min-tang to achieve the national aim according to the doctrine of Sun Yat-sen, they would merely be providing a further opportunity for the Communists, who would again try to carry out the task in their believe that that is true, and that the British now have an opportunity, such as they had and rejected in 1923, of befriending the Nationalist cause and taking the sting out of further anti-British agitation by giving the moderate wing of the Nationalist party a little moral support and a few timely concessions. The Nationalist leaders have thrown out the Russians and do not quite know what to do next. What they need are a few political assets to show their followers that they can conduct the revolution in an orderly and decent manner and yet achieve results, but if they are frustrated in all attempts to place China's foreign relations on a new basis, either by negotiation or unilateral action, they will have to make way for those who will do it by more violent means,
own way.
as
11. Nor do I think that we should be unduly distracted by the present internal dissensions in the Nationalist party. They are entirely due to personal intrigues and jealousies, and the struggle for personal power on the part of individual military leaders and politicians. There is no division on matters of principle. They all own allegiance to the party and claim to be acting under the authority of the party rules and organisation. It is true that in the present split one side denounces the other "Red," but that is merely political abuse and the accusation is vigorously denied section are now in control of Canton, but, frem by the others. The so-called "Red the foreign point of view, they are so far providing the best administration we have had in Canton for the last two years. They are keeping order and suppressing labour agitation. They have paid off and forcibly ejected from Canton the Hong Kong strikers, who have been living for months on a Government dole in other people's houses, and they have wound-up the anti-British and anti-Japanese boycott societies and published the fact in the press. Not a bad record for a three weeks' tenure of 12. I am inclined to think, therefore, that an agreement concluded with any Government which happens to be in power in Canton, Hankow, Nanking or That is to say, Shanghai, as the case may be, would be respected by its successors.
office.
it would be observed in the way in which the Chinese do observe their political engagements not scrupulously, but well enough for practical purposes, provided they are kept up to the mark by constant representations, as has been done with the existing treaties for the last seventy years. I do not think that an agreement signed by one Nationalist Government would be openly repudiated by another on the grounds that it was negotiated by a different set of officials. At all events, so far as that is concerned, I do not see that we shall lose anything by trying to come to terms with the Nationalists, for at the present time the only special treaty privileges they recognise are those which they think will be upheld by the immediate application
of armed force.
13. On the other hand, if it were found possible to remove soine of the more obvious and dangerous causes of friction by amicable agreement with the authorities in Canton, the improved relations resulting therefrom would operate to the benefit of British trade in this area and would be of great advantage to the Colony of Hong Kong. The welfare of Hong Kong has in the past been sacrificed to a variety of political exigencies, such as our relations with a make-believe Central Government in Peking, commercial interests which were supposed to depend on those relations. bondholders secured on the customs and co-operation with the other Powers. Hong Kong has suffered immensely from the inability to reach any understanding with the rebel" Government in Canton, but with what corresponding advantage? The state of British interests in other parts of China has been graphically described in
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