(3).
446
custodian banks and that in future the Chinese government should have full control of these reverues the custody of which should be in Chinese and not in foreign hands; that is to say the commissioner of customs at each port would hand over the revenues to his Chinese colleague, the superintendent, retaining possibly a percentage to be calculated for each port,
for the service of the foreign secured loans.
The
adoption of this policy would of course entail
relegation of unsecured debts to be dealt with out-
side the conference. Its advantages may be enumera-
ted as follows:-
1. It would be interpreted as a liberal
gesture and a recognition of China's right to be
mistress in her own house.
2. It would automatically achieve provincial
allocation. If the Chinese wish the revenues to
flow to Peking and be used for foreign and domestic loans they must make their own arrangements without
invoking foreign gunboats.
3.
The customs administration would be seved
from destruction.
4.
It might pacify Canton.
5.
It would save the secured foreign bond- holder who otherwise will be dragged under by the
unsecured debtor.
6. It would facilitate abolition of likin. Please telegraph your considered observations on this proposed policy. The matter should be treated as confidential but you should take an
opportunity