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Although, owing to extraneous circumstances, this
Agreement could not be considered in its entirety, Schedule D, as
has already been pointed out, did come within the scope of dis-
-cussion, was accepted and must be taken as res judicata.
In any case the Hongkong Government loyally fulfilled
their obligations thereunder, whereas the Provisional Administration
of Kuangtung, though its Treasury Department, declares that, owing
to non-ratification, it declines to be bound thereby. Such being
the case, it remains for the former to revert to the status quo
ante and to abrogate the privileges which they in good faith and
a spirit of loyal generosity, have conceded. The consequences of
such action would be very serious, how serious has perhaps not
been completely realised.
It must be to the interest of all concerned to make the
railway a paying and a profitable undertaking, and, for the sake of
the infinitesimal profit to be derived from a levy of likin, to
strangle trade along the line, is a policy shortsighted in the
extreme. Take for example the one item of cotton yarn alone, the
import of which into Sheklung is estimated at 25,000 piculs per
annum. At present this all travels by junk via Macao, where the
native Customhouse duty collected by the Commissioner at Lappa is
only 58 cents per picul as against the Tariff duty of $1.47
collected at Kowloon, and the railway loses the freight thereon.
The Chinese Traffic Manager at Ta Sha T'ou reports that, were it
not for the imposition of likin, the goods returns would show a
gratifying increase, but a charge of 2% ad valorem by rail as
against one of about 1% ad valorem by water naturally works all in
favour of the latter. The General Manager states that, while likin
brought in only a few hundred dollars per month, it was having a
very damaging effect on railway receipts.
Mr. Jamieson accordingly hopes that what has been stated
above may be taken into very careful consideration, not only from
an economic point of view, but also from a political point of view, because were the Hongkong Government to withdraw the