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or preserved food-stuffs, gold and silver coin in amounts exceeding five dollars and gold and silver bullion, and banknotes of every description in amounts exceeding five dollars." This prohibition became known in Canton within a few hours of the tragedy of June 23, and whatever may have been its actual purpose and aim-it was then interpreted and continued so to be interpreted as a financial and economic blockade of Canton and the rest of the province which had hitherto depended on Hongkong for supplies of rice and other food-stuffs.

In a sense, it may be said that this Hongkong severance of economic relations with Canton suggested the precise form in which patriotic retaliation for June 23 should ex- press itself.

And if the anti-British boycott did not soon follow the course of other apparently similar manifestations of popular feeling in the past, one of the main reasons was that the movement came immediately to be envisaged as a means of effective defence against what Chinese Nationalists were led to understand as a British attempt, based on Hongkong, to starve and crush Canton as the centre of Nationalist doctrine and activity.

But there is a more concrete reason why the anti-British boycott has been so long sustained. It is on record that my Government made repeated attempts to have the question of June 23 settled. And in reply to one of these attempts, the then British Consul-General stated that his Government could not entertain the demands formulated for a settlement of the question. These demands were conceived and formulated in the un- usual circumstances immediately following the shooting of June 23, and they included terms which my Government, actuated by a sincere desire to arrive at a satisfactory settlement, is prepared to review in order that nothing incompatible with the real dignity and interest of Great Britain as a trading power in China shall continue to obstruct the path of settlement.

Before communicating these new terms of settlement, we wish to have the views of the British delegation on this presentation and definition of the anti-British boycott issue.

No. 4.

BRITISH COMMUNIQUÉ

RELATING TO THE

MEETINGS OF MONDAY, WEDNESDAY AND FRIDAY, THE 19TH, 21ST AND 23RD JULY, 1926,

WITH TWO ANNEXURES,

The conference for the settlement of Chinese-British disputes in the Liang-Kuang resumed its sittings on Monday the 19th July, when the British delegation replied to the statement of the Chinese delegation on the origin of the anti-British boycott." The Con- ference adjourned until Wednesday the 21st July.

The conference resumed its sittings on Wednesday the 21st July, as arranged.

The Chinese delegation replied to the statement made by the British delegation at the meeting of the 19th July, and then proceeded to make two alternative proposals for the settlement of the boycott. One was the appointment of an international commis- sion of enquiry to determine the question of responsibility for the Shakee incident of the 23rd June, 1925. The alternative proposal was that the financial burden which the settle- ment of the boycott would entail on the Canton Government should be shared by the British. Translated into practical details this proposed sharing of the burden proved to be a demand for (a) compensation to the relatives of those killed at Shakee, and (b) some form of compensation to the strikers.

The British delegation immediately and emphatically rejected the demand for com- pensation to the strikers, and this refusal was treated by the Chinese delegation as dispos- ing of the whole of their second alternative proposal.