-
· 3 -
59
Enclo. No. 2.
on refined as against raw will be a great blow to Hong Kong
Refineries, if (as is to be expected) the refining industry
develops in China". Mr. Bernard did not deal with the
larger question as to whether trade could bear these taxes.
His letter of the 11th July was endorsed on the 14th July
by a joint meeting of the China Association and of the
General Committees of the Chamber of Commerce, who felt
that there was nothing that could usefully be added to it.
This joint meeting was, however, informed that in South
China the operation of the proposed scheme would be post-
poned until the 1st November next.
5.
Colonel Hayley Bell answered my question
much more fully in the interesting memorandum, dated the
15th July, of which I enclose a copy, and which he requests
may be regarded as confidential. He makes two points: (a)
that the new import tariff should not in itself make trade
impossible; for, if likin and internal transit dues are
effectively abolished, trade could stand considerably
higher import duties at entry: and (b) that the corollary
to a large increase in the import tariff will, in view of
the present complete absence of a preventive system, be the
smuggling of cargo on a large scale by junks.
6.
Considering the matter purely as a trade
problem, much will obviously depend on whether the promised
abolition of likin and of the harassing internal transit
dues, enumerated in paragraph 2 above, can be made really
effective. On this point Colonel Hayley Bell thinks that
probably Kuang-tung will throw off the likin system more
readily than any other part of China, because that system
has never been quite so vicious here as elsewhere.
I am
not