1
(F 2823/2823/10).
Decode.
353
:
NG DISTRIBUTION,
Sir R. Macleay (Peking)
D.
R.
2.00 p.m.
8.00 9.3.
September 22nd, 1923.
September 22nd, 1923.
September 22nd, 1923.
TO.
228
(R).
Canton authorities have renewed through consular
body application to Corps Diplomatique for payment to them of yro rata share of customs surplus (see correspondence of 1920). Following is summary of their argument in support of application.
While concurring in view pronounced by Americans in 1920 that Corps Diplomatique should concern itself only with unconditional release of surplus to recognised goverment of China they deny existence of a government of China in Peking to-day. They are prepared to shoulder their share of foreign obligations charged on customs revenues but they challenge justice of handing over their share of surplus to northern faction to be used in warfare against them. In reply to objection that there is at present no surplus owing to revenues being used for domestic loan service they argue that they have never recognised validity of action of Peking in so hypothecating customs surplus, and that Peking faction have no right to use Canton faction's share of surplus to meet Peking's internal loan obligations. In any case, even if internal loan obligations be recognised, there should still be surplus available as salt and wine and tobacco revenues were also charged with fixed contributions towards internal loan Bervice. By causing whole of customs surplus to be used for internal loan service Peking faction are able to use salt and wine and tobacco revenues for military purposes.
In /