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Customs Administration. He anticipated that the Cantonese would refuse (in which case presumably our acquiescence would also fall to the ground). He did not suggest what our next step should be, but it appeared that he was not really in favour of acquiescence at all, but would prefer that we should join in an emphatic protest and attempt to unite the Powers in a joint stand in defence of their treaty rights. In this connection, it should be noted that in a previous telegram Sir R. Macleay had informed us that, in view of the tame acquiescence of the Powers in the illegal exactions of the Strike Committee and in irregular taxes, such as the Canton oil This tax, it was unlikely that they would proceed beyond paper protests. anticipation was fully confirmed at a Diplomatic Body meeting of the 20th October, when Sir R. Macleay reported that his colleagues did not think that the proposed protest would be effective in stopping the Cantonese levying the taxes or that their Governments would join in any action to enforce it.
XXVI.
On the 3rd November Sir R. Macleay, misunderstanding his instructions, agreed to participate in a joint protest, but without making any explanation to the Powers as to our policy as set forth in paragraph XXIV above. This has made it impossible to proceed with that policy on the lines originally intended.
Foreign Office. November 4, 1926.
[F 1998/8/10]
ANNEX I.
J. T. PRATT.
Memorandum communicated to United States Embassy, May 28, 1926.
HIS Majesty's Government have received through the United States Embassy in London a message from the United States Government enquiring whether Hi Majesty's Government endorse the attitude ascribed to the British delegation at Peking of desiring to abandon the negotiations at Peking and break up the Tarif Conference; and expressing the hope that His Majesty's Government will continue to co-operate with the other interested Powers in bringing to a conclusion the task which was begun last October.
2. His Majesty's Government desire to assure the United States Government that the report received by them that the British delegation, desire to withdraw from the negotiations at Peking appears to be based on a complete misunderstanding. His Majesty's Government have no intention whatever of breaking up the Tariff Conference, It is true that the question has been considered whether at the present juncture it might not be convenient to arrange a brief suspension of the conference over the summer months. It was realised, however, that in existing circumstances suspension of the conference might prove to be more prolonged than was intended, and in order to prevent the possibility of misunderstanding as to the sincerity of the Powers, His Majesty's Government considered it to be of the greatest importance that, before even such a brief suspension as above contemplated took place, there must first be a complete liquidation of the promises made at Washington.
3. The British delegation in Peking fully shared this view, and appreciated the prime necessity of liquidating the Washington Treaty. A considerable interchange of views has, however, taken place between the Foreign Office and the delegation in regard to the proceedings of the conference on the subject of the unsecured debt; and it is probable that the misunderstanding to which reference is made above has arisen in consequence of the attitude which the delegation has been instructed to take on this matter, and which was formally stated by the chief British delegate at the meeting at the Netherlands Legation on the 6th May.
4. The United States Government will no doubt recollect that His Majesty's Government were from the first averse to the imposition on the Chinese Government of any scheme of consolidation of the unsecured debt as part of the work of the Tarif Conference, and that they only agreed later and with great reluctance to the discussiot of any such scheme at the conference. If the schemes of the foreign delegations for the consolidation of the unsecured debt should postulate too strict a control over China's customs revenues (shortly to be increased by tariff autonomy) His Majesty's Government are afraid that a dangerous deadlock may arise, for the discussions on thi
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subject show that the Chinese, though willing to bind themselves to devote a proportion of their revenues to the unsecured debt, have declined to allow the details of debt consolidation to be dealt with by the Tariff Conference, and will refuse to submit to any extension of foreign control-for that or any other purpose-over China's customs revenues.
5.
His Majesty's Government, after full consideration and prolonged consultation with their delegation in Peking, have come to the conclusion that, while they are ready to agree to any reasonable scheme for dealing with the unsecured debt put forward by the Chinese and agreed to by the other Powers, it would not be right to associate themselves with any attempt to force upon the Chinese a greater degree of foreign control over the revenues required for that purpose than they are prepared voluntarily to concede. A policy involving increase of foreign control, and capable of being regarded as an encroachment on that sovereignty anul independence of China which the Powers agreed at Washington to respect, is so fundamentally opposed to the traditional policy of the United States towards China that His Majesty's Government are disposed to believe that the State Department will share their anxiety on this subject.
6. It is true that His Majesty's Government originally desired to exact proper guarantees from China in regard to the abolition of li-kin as a condition precedent to the grant of the Washington surtaxes, but they have come to the conclusion that, in the altered circumstances and changed atmosphere of to-day, any attempt to insist upon guarantees against the will of the Chinese Government would only result in postponing indefinitely the liquidation of the Washington promises. They are as anxious as the United States Government fully to implement these promises at the earliest possible moment, and believe that it would be contrary to the intentions of both Governments, both at and subsequent to the Washington Conference, to subordinate the fulfilment of these promises to the imposition upon China of a scheme for the consolidation of her unsecured debt and extension of foreign control over her customs revenues, Any failure to implement the Washington Treaty might create a very dangerous situation, and His Majesty's Government now therefore hold the view that if any reasonably satisfactory assurances are given by the Chinese Government as to the use which it proposes to make of the new revenues the Powers should accept such assurances, abstain from any attempt to impose control or exact guarantees, and forthwith authorise the levy of the surtaxes. They feel confident that a policy, so closely in accorl with the friendship and generosity always displayed by the United States of America towards the people of China, will receive the full and cordial support of the United States Government.
Foreign Ofice, May 28, 1926.
[F 4326/1/10]
ANNEX II.
THE CANTON BOYCOTT.
A Record of Events (July 15, 1926-October 13, 1926). THE following memorandum is a continuation of Mr. Ashton-Gwatkin's memorandum respecting Canton of the 3rd February, 1926 (Confidential, 12906), and of Mr. Patrick's memorandum of the 13th July, 1926, on the Hong Kong- Canton negotiations (July 13, 1926, Section 1).
2. Negotiations for the settlement of the anti-British boycott in the Kwangtung Province and of other cognate questions opened on the 15th July between the Canton delegation, consisting of the Minister for Foreign Affairs, the Minister of Finance and the Minister of Labour, and the Hong Kong delegation, of which His Majesty's acting consul-general at Canton, Mr. J. F. Brenan, was a member. The proceedings opened with an interchange of formal courtesies, and on the following day the Cantonese delegation produced a long written statement giving their views on the origin of the boycott, and asked for a reply from the British side, with a view to publication. This reply was provided, with an expression of hope that the Chinese delegation would abandon such methods of public controversy and settle down to serious negotiations. In private conversation, Mr. Chen, the Cantonese Foreign Minister, urged upon Mr. Brenan that the Hong Kong Government should help the
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