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organization around Hong Kong, for which the Kowloon
Customs was to continue to be responsible. Much might be
done with Customs cruisers and the existing stations and
patrols on the frontier of the New Territories and for the
rest Colonel Hayley Bell should report what additional
assistance, soldiers and so on, he would need. Colonel
Hayley Bell replied that at present such things are paid
for from Peking out of revenue and asked to what extent
he could look to the Nationalist Government for such finan-
cing. There was no definite answer to this inquiry.
10.
The next point discussed was the Kowloon-
Canton Railway. For the convenience of through traffic,duties are now collected in the Kowloon terminus at treaty rates by the staff of the Chinese Maritime Customs. A refusal of the British Government to pay or to recognize the increased tariff would mean that collection must be removed
from the Kowloon terminus to the Chinese side of the
frontier at Sham-chun either in whole or for the increased amounts over the tariff existing today.
Delay to trains would be caused, but there would be no special difficulty from the point of view of the Customs. In fact Colonel Hayley Bell could parry the necessity for a decision by continuing to collect only according to the treaty tariff at the Kowloon terminus and inducing the existing Surtax Office at Sham-chun station to collect the balance claimed by the Canton Government. But the probability is that under the proposed new scheme, little freight (if any) would be transported from Kowloon into Kuang-tung by trains and that thus a severe blow would be struck at the Kowloon-Canton Railway.
11./