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Customs. The maintenance of the integrity of this administration
is essential to British interests, not only because it facili-
tates commerce, but also because almost the whole of the
revenue which it collects is devoted to the service of foreign
loans to China. The administrative centre of the Chinese
Maritime Customs is now at Peking. But Shanghai would be
a far more convenient centre; and, if the integrity of this
service is to be maintained, I feel convinced that Sir Francis
Aglan vill before long have to migrate from Peking to Shanghai, It might then be possible to arrange that the Customs'
service should continue as heretofore at the various treaty-
59
on
ports and that "custodian banks" should hold the revenue collect -ed at each port. A first charge of this revenue would be such proportion of the service of the foreign debt of China as the collections in each port bear to the total collection
made at all the ports, any surplus being handed over to the Chinese authority in administrative control of the region in which the port is situated. For example, the totalcollection made by the Chinese Maritime Customs in 1922 was H.K. Taels
59,359,194 and of this total the amount collected at the port of Canton was H.K.Taels 3,281,789. Canton would, therefore, on the proposed basis of assessment have been liable, in 1922, for about 3ths. of the service of foreign debt so far as it is
secured upon Chinese Customs revenue, and any customs collection at Canton in excess of the amount so due for foreign loans would be payable to the Cantonese authorities. Mutatis mutandis similar action could be taken with respect to other loans. Thus the whole liability in connection with the Chinese section of the Kowloon-Canton Railway, which has hitherto been borne by the Ministry of Comunications of the Central Government at Peking,woule dévolve upon the Kuang-tung Government; whereas any liabilities which might accrue, if a loan were made for the completion of the Canton-Hankow railway, would have to be shared pro rata by the administrations of Kuang-tung and Hunan.
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