241
32.
2 draft agreements.
asked for worth while; the Chinese in Hongkong were
as anxious to preserve Article 5 as the British,
owing to the risks of commandeering and piracy and
illegal taxation run by ships under the Chinese flag.
The most that Hongkong was prepared to accept by way
of amendment was the limitation of the rights confer-
red on British ships under Article 5 to the two Kwang
provinces. He said it was suggested that the grant
of inland water privileges to Chinese-flag vessels
only was but an intelligent anticipation of a de-
velopment that was bound to come, as it seemed in-
conceivable that, since the trade by junk al ready
existed unrestricted, a junk which installed an
auxiliary motor would be debarred, while the tran-
sition from motor junk to launch, and from launch
to river steamer might be alow, but was inevitable
as China became modernised. The Governor said that
two conferences had considered the agreement in Hong-
kong, on November 9th and November 14, which H.M.
Consul-General at Canton had attended, and that the
agreement had been gone through very carefully and
revised draft drawn up. Copies of the previous
draft of July 1929 (with slight amendments intro-
duced by the Executive Council) and of the revised
draft of November 1929, which Hongkong now wishes
to forward informally to the I.G. of CustomB are
appended to this memo. The opportunity was also
taken at these conferences to strike out the
whole of Article 2, which dealt with salt on the
ground that it was quite sufficient that the Hong-
kong Government should declare in general terms
ite willingness to endeavour to prevent the
/illioit