;
:
215
Secondly, I agree with the view that actual signa- ture of the agreement rust commote at least de facto re- cognition, Whether we should refuse to reaune any pre- liminary discussions with the Chinese until they have been recognised de facto, is a question which we can perhaps leave for settlement between the Japanese and Americans.
My impression is that, while the Japanese wish the conference to continue in being, since they realise the necessity for creditor Powers not to lose this opportuni- ty of concluding a treaty with China which will earmark the greater portion of the increased tariff for debt consolidation before the Chinese obtain or enforce tariff autonomy, they will seek every pretext for postponing any tariff increases, ari especially Washington surtaxes, as they will not receive any relief for their unsecured debts from accumulated funds.
Thirdly, in view of the American attitude and mis- representation of our own attitude, to be expected if we stand out alone for the maintenence of clauses 1 and 2, I am of opinion that His Majesty's Government may be well advised to accept their deletion, subject to the follow- ing counter amendments.
Clause 3 to be altered to omit the words "as may be deemed useful".
In clause 4, it should be made clear that the ac- cumulated fund will be eventually used for the abolition or likin, as well as for liquidation of debt, or alter- natively that its disposal is left completely open for later decision, without being earmarked at the present
stage