This Document is the Property of His Britannic Majesty's Government, and should ba

returned to the Foreign Office if not required for official use.]

88

From CHINA.

De cypher. Sir M. Lampson (Peking)

July 31st, 1927.

D.

R.

9.10 p.m.

9.00 a.m.

July 31st, 1927.

August 1st 1927.

No. 1213.

IMPORTANT.

Your telegram No. 488 has crossed my telegram No. 1211 reporting recommendations of diplomatic body on report of Shanghai consular body of July 26th. With all deference I would be (grp. omtd.) urging action on what may well be a turning point in our whole position in China until we know result of those recommendations and more particularly line which Japan adopts towards them.

Meanwhile if I may (grp. omtd.) frankly my first difficulty is to reconcile present apparent readiness of His Majesty's Government to throw in their hand over regional tariff autonomy (and that with a régime that may even now be tottering to its fall) with principles laid down in your telegram No. 333 to Washington. Those principles are unassailable and as sound as the day they were drafted. I hold that we should adhere to them.

Nanking Government are dangling the bait of

prospect of abolition of internal taxation before us. But we should be ill-advised to take that offer at its face value even if genuinely meant, which is

problematic, and practically possible (which, as regards

likin.....

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