CO129-360 - Public Offices - 1909 — Page 581

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made a condition originally that the loan was to be for the repurchase by China of a Belgian Concession; this condition had been sprung upon the Chinese at the last moment, and had naturally aroused suspicion. He had himself expressed the opinion that, in this case, both parties had made mistakes.

I told him that we sympathized very much and very sincerely with the desire of the Chinese to strengthen and develop their own country. It was for this reason that we had agreed to restrict the export of Indian opium, though the restriction had entailed some sacrifice of Indian revenue and it had required some determination on our part to impose it. There had also been some opposition here to the restriction, on the ground that whatever the wishes of the Central Government at Peking might be, China was such a large country that, in some of the provinces, the growth of opium would continue, and the restriction of the Indian export would only lead to an increased growth of Chinese opium. I was therefore having careful reports sent home from China in order to convince people here that the growth of opium in China was being restricted pari passu with the restriction of the Indian export.

Tong expressed great appreciation of the help we had given. But he understood that the restriction had not really entailed any sacrifice or inconvenience in India. Mr. Baker, the Finance Member of the Council in India, had told him that India could perfectly well do without the whole of the revenue from opium.

I expressed some surprise at this, and said that, though I was not familiar with Indian affairs, I had always understood that the opium revenue was, from the purely financial point of view, a matter of some importance.

Tong said that Mr. Baker had told him that the whole of this revenue amounted to 2,800,000/; but that the increase in the railway receipts would more than make up for the loss of this revenue, and the land now under cultivation for opium could be devoted to growing india-rubber, cotton, and rice, so that the people and Government of India would benefit.

I agreed that the people would benefit by growing these things instead of opium. But it seemed to me that the loss of 2,800,0001. must be a consideration for the Indian Government. If they retained this revenue, they could at any rate remit some of the taxation which was at present burdensome. I could not think that any Government could forego 2,800,000%. a-year without some inconvenience.

We then had some conversation about Macao. I explained to him the provisions of our Treaty with Portugal, and said that I knew Macao had been a centre of smuggling, and I quite agreed that this must be discontinued.

Tong said that there was not only smuggling, but Macao itself was a refuge for criminals, and a real pest to all the neighbouring districts of China.

I told him that, of course, we had no reason for interesting ourselves in the matter at all, except so far as our Treaty with Portugal was concerned. But as this Treaty entailed upon us an obligation to protect the Colonies of Portugal, it followed that we also had a right to speak to Portugal about the use she made of her Colonies. I should certainly explain to the Portuguese that, if they wished to retain peaceable possession of Macao, it was absolutely necessary that they should put a stop to the evils of which Tong had complained.

He said that as far as the Portuguese as a race were concerned, they got on very well with the Chinese. They accommodated themselves fairly easily to living on the same food and to the conditions of Chinese life, but Macao was little better than a collection of gaming-houses, and no respectable Chinese would care to go there.

Lastly, I spoke to Tong about the successor to Sir Robert Hart,

I explained that though we had the right to demand that his successor should be an Englishman, we could not claim the right to decide who that Englishman should be. It would, however, be a breach of the spirit of the engagement if the Chinese were to select some one whom they know to be repugnant to the British mercantile community and to British interests generally. Should Sir Robert Bredon be appointed, I was sure his appointment would be very bad for the Customs service, and would be regarded with great disfavour. What was needed was a man not only of ability, but also of such a character as to command respect and to have the necessary moral ascendency for making the Customs service work well, and for securing the confidence of the traders. The Chinese Government had promised not to appoint Sir Robert Bredon permanently. I did not know whether Sir Robert Hart was going to return to China. Whether he did so or not was a matter entirely between the Chinese Government and him, in which he had no right or desire to interfere. But, when the time came for him to retire, we had agreed some time ago to support

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Mr. Hippesley as his successor. Though we heard that Mr. Hippesley's health was not always good, we should be quite content if he were chosen. My object in talking to Tong was not, however, to press the claims of any particular person, for I knew it was a matter of very great difficulty to fill the post.

Tong expressed the opinion, very decidedly, that the successor to Sir Robert Hart should be chosen from outside the Customs service. Mr. Hippesley had a party for him and a party against him, Sir Robert Bredon had the same, and so had everyone else within the service. He had already expressed this view to Sir Robert Bredon himself. Tong considered that, if any one was chosen from within the service, his position would become untenable in a very short time, owing to the jealousies which would be roused. The members of the Customs service got on well enough under Sir Robert Hart, but in Tong's view it was absolutely necessary that the successor should be chosen from outside. He thought the best plan would be to get a good man from here.

I told him I saw no reason to differ from this conclusion, and, so far as I knew the plan he suggested was quite likely to be the best.

Subsequently, in taking leave of Tong, on bis departure from England, I showed him passages from Sir E. Baker's financial statement in India, which made it clear that India would incur loss and have to make some sacrifice (though not an impossible one) in losing the opium revenue; and I pointed out that even this statement was coloured at the time by the exceptionally prosperous condition of Indian revenue. was less prosperous now.

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Tong Shao-yi, in speaking of the improvement of relations between China and England during the last three years, said he felt it was due to the change of Govern- ment in England since 1905, and when I asked him why he said so, he replied that he had noticed a change of attitude with regard to Thibet. He himself had spent ten months at Calcutta trying to make some progress under the late Government, but had failed; under the present Government the Treaty had been signed. I said that England had no political designs upon Thibet, and that if our trade was not impeded he might rely upon it that we should not interfere with Thibetan affairs.

I am, &c.

(Signed)

E. GREY.

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