!
(4).
!
which case the best course would seem to be for me
to proceed to Peking. On the other hand you may
think the present opportunity too good to miss for
pursuing these conversations further and wish me
to stay at Hankow for the purpose. In that case
you may feel disposed to send me a counter draft
for discussion in the same informal and non-
committal way as up to date. I shall in any case
stay here pending your reply but as I am anxious
not to waste time here unnecessarily, I should be
greatly obliged by immediate instructions.
Recognition of Canton government in some form
soeme to me inevitable sooner or later and if that
is admitted, I feel we should not delay longer than
necessary in giving it. Chen repeatedly emphasized
this (as was no doubt natural) and again made point
specifically that he wished to deal with us separate-
ly.
We touched incidentally on the question of
customs surtax and I put to him as strongly as I
could advantages of collection by customs.
He
seemed to see this and volunteered statement that
his government had every desire to preserve customs
administration but it would have to be subordinate
to them in areas they controlled. I told him quite frankly lines on which our thoughts were running
regarding immediate unconditional grant to China as a whole of Washington surtaxes, and he evidently thought it a wise and honest move but remarked wryly that it would also place the northern militarista in funds. I answered that was no concern of ours; and if as he anticipated he was in Peking in a few months time it would make no odds who had surtaxes now.
Addressed to Foreign Office Nos. 7, 8 and 9. Repeated to Peking, Tokyo, Shanghai, Hongkong for Canton.
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