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27
Enclo. No.1.
Philippines, a letter from Mr. F.W. Maze, Inspector
General of Chinese Maritime Customs, dated the 23rd
September, 1929. I enclose a copy of this letter,
and Your Lordship will see from it that the Chinese
authorities have objected to Article 5 of the draft
agreement.
The Nanking Government considers that it
would be inconsistent for it "to depart officially from
its declared policy of withdrawing from foreign
shipping the privilege of participating in the coastal
trade of China by formally extending to Hong Kong
foreign-flag vessels the right of trading in inland
waters". Mr. Maze accordingly suggests that Article 5 be deleted altogether on a clear understanding, to be ratified by a formal exchange of notes, that Hong Kong vessels flying the Chinese flag, like the Chinese
junks, may trade freely in inland waters to and from
Hong Kong and Chinese inland places, etc." I only had opportunity for brief discussion of this proposal
with Mr. Southorn before I left for Manila; but I
indicated to Mr. Southorn the lines upon which I
thought the reply should be written, and I enclose
Enclo. No.2. a copy of his letter to Mr. Maze, dated the 2nd of
October, 1929, which embodies my views, namely, that
the deletion of Article 5 would be entirely unacceptable to this Government, for we can hardly be expected to give the Chinese Government certain valuable privileges of a most unusual nature in return for a concession
granted to vessels of Chinese nationality and denied to vessels of British nationality.
4.