In spite of that provocation we refused to treat it as.an act of wars we refused to be involved in. it; negotiated, nevertheless, the rendition of the settlement, No act of such generosity in such cireumstances would have been possible to any Government that was not conscious of its strength, and of its power to act in the other way if it had chosen to adopt the alternative—(hear, hear)—and no such act of generosity, no such exhibi tion of patience, ean you find in all the past relations of the Western Powers with the Empire or the Republic of China. But the warning which we had got obliged us to take a practical step. We sent the Defence Force to Shanghai; and that was the second "mistake"—it was said that "Sir Austen had blundered." Who can say so to-day with a knowledge of the reasons on his side?
We took our necessary precautions. Surges of civil war swept past and around Shanghai, but that great international settlement was immune from the disturbance. By the precautions which we took we prevented sich an attack upon i as would have been inevitable, and would have involved not merely us but other nations in war with China, We saved Shanghai, and the extremist party reaped' their vengeance on the defenceless community at Nanking, where the victims were mainly missionaries and teachers and in largest part American subjects. Since then Some improvement in the situation has enabled us to reduce the defence force which we originally sent to Shanghai, The troops which numbered originally 12,500 are now no more than about 4,500, and cannot speak of this small force without paying a tribute both to the General who commontied it and, the men of whom it was composed.
Phe Chinese Armies China is accustomed to arms. There are I know not how many generals at this moment in China, know not how many armies, for sooner do they unite than they break up and reform in different groups. But the armies to which China is accustomed are armies Which are a terror to the peaceful Population, whose passage is mark-ruin, Tooting, and outrage.
This small British force which they had never seen was a friendly force with no object but to preserve the pence and defend the settlements, Tt paid for everything it took. It played football and did other human things such as our~ soldiers are accustomed to do even when they aroon active service if they get the opportunity. I have said that the situation has improved, and that enabled us to reduce the force originally we felt to send. The active ant foreign phase of the Chinese revolution all passed with the passing of the Russian influence from the Nationalist Party of China.
The coincidence is remarkable, and it Is unmistakable. Rather more than a year ago Borodin made hig triumphant entry into Banke six months later he was a refugee, and the Government which he had directed had practically ceased to exist, Last month, as a result of the desperate Communist rising at Canton—I saw pictures to-day or yesterday in one of the London Dapers of the destruction wrought, not in the international settlement, but in the Chinese city, under that monstrous attempt at revolution. As a result of that desperate rising in Canton and the discovery of similar plots at Hankow and Shani hat, all "Soviet consulates Nationalist China were closed by order of the Nationalist Government, and the Soviet officials sent out of the country. The pact said, "Bast is East, and West is West," but sometimes the East and West meet in the measures that are forced upon. them by outrages of this Kind.
The Communist Intrigue The Nationalist Commissioner for Foreign Affairs at Shanghai put the position last month in the following words: "Canton is fed up' with the Communist intrigue, and is determined to rid herself of Communist influence, which has threat ened to wreck the revolution. Since Western educated Chinese are con-vineed that the Anglo-Saxon road is the best for China, I hope they will exert their influence in support of the Nationalist Government in order to bring about a new oriental tion of Kuomintang." The National-
{st policy to this extent, therefore, has improved. Our danger at the Present time is not so much, if at li, the direct hostility such as was inspired and directed Soviet agents against the BritisheEmpire and British interests, but the anarchy which prevails throughout China. It is that anarchy, especially in the valley of the Great Yangtze, which is having so disastrous an effect upon our trade.
The anarchy shows itself in the seizure of the railway by troops, their inability to pay their way oF to carry on their normal traffic, in sudden embargoes on bullion, in the issuing of worthless paper ' whi fare given a forced circulation, in excessive and irregular taxation, in confiscation of funds and goods and in widespread insecurity for both life and property. And I beg you to remark that, if those evils fall, as they do fall, on the foreigner in China, including Englishmen in China, they fall with a hundredfold greater weight upon, the- Chinese themselves, and it is China and the Chinese which are the first and the greatest victims of the anarchy which prevails. These conditions prevail to a varying extent in China, Toth north and south, and at, times they bring peaceful trade to a complete standstill, Yet in face of all this we, have held and we hold to our policy of patience and conciliation,
Text read from the printed page and cleaned; old type leaves the occasional error.