83
and the Secretary of State has therefore
sought to examine the matter from the
standpoint of the trade of Hong Kong ·
The Chinese proposal that this taxation
should be accompanied by the abolition
of internal duties has not escaped his
notice, but it seems clear that, as
pointed out by both the Governor and
Sir M. Lampson, little or no reliance
can be placed on Chinese assurances in
tal
this respect, and indeed, it is not within
the power of the Nanking or Canton Govern-
ments to abolish internal taxation, even
if they wished to do so. It must be
assumed, therefore that the proposed
increase in the import tariff would not in
be accompanied by the abolition of
external duties and in these circumstances
it seems clear that the proposed taxation
would necessarily have a serious effect
on Hong Kong trade The effect of this
taxation on trade with South China,
Lowever
fact
serious though this would be, provides/less
cause for alarm than the precedent which
I in
would