(This Document is the Property of His Britannic Majesty's Government, and should be returned to the Foreign Office if not required for official use.}
CRI A.
Decypher.
Sir R. Macleay,
(Peking)
23rd December, 1925.
D.
R.
1.40.p.m. 9.00.a.m.
23rd December, 1925.
25th December, 1925.
No. 31.
EURENCE.
439
Your telegram No. 375.
Any
At present provinces, by illegal seizure of salt taxes, railwey funds etc., not to mention likin charges, are getting too much not too little of funds necessary for Central goverment purposes. alteration of Customs however (as distinct from Tariff) at present time might very well destroy principal remaining prop of Chinese unity and bulwark against Bolshevik influences. Great caution is needed in making of any such proposals.
In our view arrangements are possible which will breach the likin fortress on Aglen lines but we shall be a voice crying in the wilderness if we refuse to take into account necessity for doing something to mect growing bankruptcy of China. The last estimate is dollars 15 hundred million of unsecured debts including provincial debts which of course complicate solution of likin problem but not including railway bonds which will shortly be in pretty complete default unless there is a rapid change in the situation.
Customs tariff is the only source available at present for new income and we think a little over double the present revenue (excluding likin compensation
tex....