236
27.
(p.7 in 5 Y}
Chinese object to Inland Waters Clause (Art).
He feared there might be trouble over the Inland Water privileges, but said that the Minister of
Finance had promised to support the draft as it
stood, Mr. Mase having pointed out to him that unless the Customs were permitted to exercise
increased control in Hongkong itself, and re-
establish the former Customs atations near Hong-
kong, thus shortening the preventive line, the difficulty of dealing effectively with the alarm- ing increase of smuggling in the neighbourhood
would be enormously increased.
26. The fear that the draft agreement would break on the rook of Chinese opposition to the clause (Article 5) granting inland water privileges
to all vessels registered with the Customs pro-
ceeding from Hongkong to inland places, proved correct, as the Chinese Government feared they would be charged with inconsistency in making
such a concession. Er. Maze offered to the
Governor instead to attach an exchange of notes,
stipulating that Hongkong vessels under the Chinese flag, like Chinese junks, might trade freely to
and from Hongkong and Chinese "inland" places.
Mr. Maze pointed out that this was really more
of a concession than it looked, for the reason
that, once coastal trade privileges were with drawn from foreign flag vessels, direct inland trade to non-open places would be permissible only to Chinese flag vessels, and that, without
some Agreement of this kind, even Chinese-flag
vessels, coming from Hongkong, a foreign port,
would be debarred from such privileged trade.
/Mr.