CO129-451 - Public Offices - 1918 — Page 435

Copy.

No.234.

Copy to Singapore.

British Legation,

Sir:-

Peking,

107147

431

REC [REGO 2 AUG 18)

With reference to your telegram No.274 of May 18t. in reference to the exploitation of tin in Yunnan by the Japanese and its possible influence on the interests of Hongkong, and to my telegraphic reply 0.437 of May 20th, I have the nonour to state that various rumours have reached me in regard to the conclusion of some arrange- ment relating to the mines in Yunnan.

The British interest appears to be confined.to an attempt on the part of the Straits Trading Company to obtain some agreement for the export of unsmelted tin ore, which has hitherto been impossible owing to the opposition of the local smelter's guild.

The Company believes that it will be possible to ent into a contract with the provincial government who would sell to them a given proportion of the monthly output

of tin ore, receiving in return a royalty on all purchaseg The ore would be smelted at their works in Singapore, and I understand tat their interest is confined to the process of smelting and has no concem with the mining of the ore.

Their difficulty lies in the terms of the Customs Tariff. Tin Slabs are specified in the tariff list and are exported from the province on payment of a duty which now amounts only to about 1.36%. Tin ore is not specified, in the Tariff, und would be called upon in consequnce to pay an ad valorem duty of 5% thus rendering competition impossible,

The Right Hon.

A.J.Balfour. O.M.,M.P., etc. etc. etc.

At/

Foreign Office.