10
us at that time, would (e believed) almost certain-
ly have determined Marshal Sun Ch'uan-fang to act at once against General Tseung Kai-shek and so save
Kuand the situation on the Yangtze, while in kantung it
would have resulted in risings against the Canton Soviet all over the province. We considered immed- iate action to be essential, if advantage was to be taken of an unusually favourable opportunity. I telegraphed to you in this sense on the 16th Septem-
ber.
9. As regards Comrade Ch'ên's letter of the 18th September, we in Hong Kong did not share Mr. Brenan's belief in the sincerity of the Canton Soviet but were convinced that Comrade Ch'ên, realizing his danger was merely playing for time. We regarded his announced intention of imposing "consumption and production taxes" as an obvious attempt to secure the Washington surtaxes for Canton with tacit con- sent from us, ignoring the other Treaty Powers, who would doubtless refuse. Customs refusal would also (we thought) render the proposed taxation scheme nu- gatory, while Customs consent could only be given by the Inspector General at Peking, who would have first to consult all Treaty Powers. Moreover, the proposed taxation, if we submitted to it while others did not, would be imposed only upon British trade and continue the illegal boycott exactions in another form, If, however, refusal of the other
Powers or of the Customs made the new taxation im-
practicable, this would doubtless be treated as an
excuse
120