CO129-400 - Governor Sir May - 1913 [3-4] — Page 432

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Although, owing to extraneous circumstances, this

Agreement could not be considered in its entirety, Schedule D, as

has already been pointed out, did come within the scope of dis-

-cussion, was accepted and must be taken as res judicata.

In any case the Hongkong Government loyally fulfilled

their obligations thereunder, whereas the Provisional Administration

of Kuangtung, though its Treasury Department, declares that, owing

to non-ratification, it declines to be bound thereby. Such being

the case, it remains for the former to revert to the status quo

ante and to abrogate the privileges which they in good faith and

a spirit of loyal generosity, have conceded. The consequences of

such action would be very serious, how serious has perhaps not

been completely realised.

It must be to the interest of all concerned to make the

railway a paying and a profitable undertaking, and, for the sake of

the infinitesimal profit to be derived from a levy of likin, to

strangle trade along the line, is a policy shortsighted in the

extreme. Take for example the one item of cotton yarn alone, the

import of which into Sheklung is estimated at 25,000 piculs per

annum. At present this all travels by junk via Macao, where the

native Customhouse duty collected by the Commissioner at Lappa is

only 58 cents per picul as against the Tariff duty of $1.47

collected at Kowloon, and the railway loses the freight thereon.

The Chinese Traffic Manager at Ta Sha T'ou reports that, were it

not for the imposition of likin, the goods returns would show a

gratifying increase, but a charge of 2% ad valorem by rail as

against one of about 1% ad valorem by water naturally works all in

favour of the latter. The General Manager states that, while likin

brought in only a few hundred dollars per month, it was having a

very damaging effect on railway receipts.

Mr. Jamieson accordingly hopes that what has been stated

above may be taken into very careful consideration, not only from

an economic point of view, but also from a political point of view, because were the Hongkong Government to withdraw the