CO129-460 - Governor Sir Stubbs - 1920 [1-4] — Page 121

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A CONFIDENTIAL.

$17183

Rea! 3 APR 20

GOVERNMENT HOUSE.

HONGKONG. 10th February, 1920.

467269.

Gu

32767116

Gr 55597119

My Lord,

I have the honour to acknowledge the

receipt of Your Lordship's Confidential Despatch of the 23rd August, 1919, regarding the proposed Customs Agreement between

Hongkong and China and to inform you that I concur most em- -phatically in Mr. Severn's view that this agreement should

not now be signed.

2.

As will be seen from the correspondance

regarding the taxation of salt, which ended with Sir Henry May's Confidential Despatch of the 27th May, 1916, the argu- -mont was based upon the need of rendering assistance to

China in the matter of the collection of her salt revenue, and

3.

it presupposed the effective co-operation of the Chinese Government, and at least some measure of support on the part of the neighbouring Colonies of Macao and Kwongchauwan,

But the essential condition of effective Chinese co-operation is in present circumstances impossible of fulfilment, for the reasons given in the memorandum by the Superintendent of Imports and Exports, which was annexed to

the enclosure in Mr. Severn's Confidential Despatch of the 22nd July, 1919. The Chinese tax of $2.50 a picul is merely nominal, the Salt Gabelle having perforce to content itself with such lesser amount as it may be able at any particular

time

HE RIGHT HONOURABLE

VISCOUNT MILNER, G.C B.,

&c.,

&c...

&c..