Dear Sir Cecil,
2
Enclosure 2 in No. 1.
Acting Consul-General Brenan to Sir C. Clementi.
Canton, October 1, 1920. YOUR letter of the 27th September. I have sent you by naval bag a copy of my telegram to Peking No. 86 (to Foreign Office No. 46), from which you will see that I have not yet made any verbal intimation committing His Majesty's Government to the proposed new taxes, but that I intend to use the discretion given me to make a more definite statement if I think the circumstances require it.
I would ask you to believe that I am trying desperately hard to get this boycott removed with the least damage to our general position in this country. I am giving the most careful consideration to your views, but I must be guided by the instructions of the Foreign Office that "the overriding consideration is to terminate the boycott," and much regret that I cannot altogether see eye to eye with you in the method by which this result is to be obtained. After all, what is this naval action regarding which I am to keep the Canton Government in a state of wholesome alarm? scheme has been proposed by Hong Kong, but so far as I can see it has been rejected by the home authorities who, obviously and rightly, have no intention of taking any warlike action out here if it can possibly be avoided.
A
I have already put up a pretty good bluff about what we might do in that line, and have apparently got away with it, but it is a dangerous game to continue if there is nothing behind.
These modern Chinese with their Russian advisers are not like the old time mandarin, who could be frightened with a river gunboat. They have a very shrewd idea of how far we can and will go in the matter of coercion. They are in personal correspondence with members of the British Labour party; they read the home newspapers and modern political literature, and some of them are much better informed about world conditions than say the average English official in the East.
Eugene Chen said to me the other day that we could doubtless inconvenience their northern campaign very seriously, and therefore they did not desire a conflict with us, but, if the worst came to the worst, they could also make things extremely uncomfortable for us, and that we could not wage effective war on even South China without landing a large military expedition, which, of course, is the plain truth.
As regards the proposed taxes, I quite agree that it would be better that they should be levied as the result of an agreement with us, rather than in spite of us, although in any case it is useless to pretend that the boycott has not secured our acquiescence in the taxation. The point is, how are we to force the Cantonese to come to an agreement on the subject? The Canton Government intend to levy these taxes anyway; you may be sure of that. They have already for months past been collecting extra treaty taxes on wine, tobacco, silk, cement, alcohol, oil and other articles, without any effective protest by the Powers, and if necessary they will apply the revenue stamp system or establish their own custom-house and levy the new taxes themselves.
If we protest ineffectually and are hostile, we run the serious risk of falling between two stools and having the taxes plus boycott. The taxes will be levied in a manner causing the greatest amount of inconvenience to trade and the boycott will be continued, without pickets, but by secret terrorisation of merchants, and it will be very difficult for us to seize on anything for which the Government can be held responsible.
I think you are taking the tax question too seriously. As I have said, extra treaty taxes are already being levied, not only here but all over China. The oil companies tell me that before kerosene reaches inland places in the Yang-tsze Valley it has to pay illegal dues amounting to anything up to 150 dollars a case. Moreover, the Powers have already agreed in principle to give China tariff autonomy within a few years.
The important thing is that the taxation should be fixed and certain in amount and be levied by the Customs without discrimination and in a manner convenient for trade. That I hope we may get in Canton.
What I am worrying about a great deal more than the taxes is the anti-British trade agitation, which I fear the extremists will endeavour to continue after the pickets are removed. One cannot stop that sort of thing by war. It can only be overcome by patience and tactful conduct.
You say that there is a danger that the boycott inay at any time be reimposed. There is indeed, and it will be, unless we make a great effort to place our relations with the Canton Government on a more friendly footing, and meet them in matters which are not vital to our existence out here, but which they regard as of great importance.
11/10)
#i1,
FOREIGN OVITOR.
+
24th Bovenber, 1986.
With refermee te your despatch He
. #1
of the lat ultime, unalosing mopy of semi-official GOTTESpondence between yourself and the Sovernor of Xongkong regarding the situation in Canton, 1 an sirested by Basrotary ŝir Austen Chamberlain to sanvey to you an expression of his entire approval of your reply, dated Dateber lat, to kir G. Clementi.
Broman, BB2+,
Bing British. Coman Loženeral,
Canton.
cir.
Your obedient Servant,
(8d.) GEORGE MOUNSEY.
Yours sincerely,
J. F. BRENAN.
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