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circumstances go beyond the conditions specially agreed upon
at the Washington Conference, and any increase of tariff
should of course be conditional on the effective abolition
of the internal duties known as Likin.
A further essential condition is that a certain
proportion of the Customs Revenue should be allocated to the
Government of each Province.
This appears to me to be a very difficult problem,
because I feel sure that Canton will never be satisfied unless
they have a considerable share in any increased duties, whilst
the Peking Government will endeavour its utmost to prevent that.
Provision should be made that the proportion of in-
creased duties allocated to each Province should be paid over
either direct by the Inspector General, or by a special board
to be created at the Conference.
It is unnecessary for me to say that every endeavour
should be made to include the different railway loans
guaranteed by the surplus of the Customs Revenue.
I am confident that if the Powers hold firm the
Chinese Government will be only too glad to accede to the above terms, for the simple reason that they are desperately
Party short of funds to carry on the present Government. interest counts for so much nowadays in China that each party wants "to make hay while the sun shines," and would rather accept the conditions imposed by the Powers than forfeit the