CO129-471 - Public Offices - 1921 — Page 53

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regarding which I wrote to ou on the 28th June 1911 should be negotiated simultaneously with this Agreement, and the schedule is in fact extracted from that proposed agreement. Negotiations in that matter have, however, hung fire, though the draft has on our side been approved by the Secretary of State for the Colonies and by the Foreign Office and Board of Trade, while the Commissioner for the Chinese Imperial Maritime Customs is satisfied on behalf of China. It was, however, understood that the initiative should be taken by the Canton Viceroy, since the Agreement is on the whole probably much more important to China than to this Oplony. So important indeed was it considered to be for China to obtain this Customs Agreement that I had made it a condition precedent to my concurrence that it should be negotiated simultaneously with the Working Agreement for the Railway and it was believed that it would afford a powerful lever in securing finality in the latter-

I may add that in the circumstances I do not propose to proceed further with the separate Customs Convention (in which matter China by her dilatoriness has lost her opportunity) and if it is pressed later by the Viceroy I shall probably require more favourable conditions than it at present contains".

At this store the Chinese Revolution prevented the ratification of the Working Agreement, which had already received the signatures of Ir.Chao (Chinese section) Mr.Lindsay and Mr. Clementi (British

section) but required the hand of the Central Government

w.ich

89)

00/16 para.1.

2 in 5668/16

which collapsed.

The agreement is apparently

still unratified but to a considerable extent it is acted upon

-

a typically Chinese arrangement.

In September 1913, Sir H.May suggested that the ratification of the Working Agreement, and the Customs Agreement should be conditima of the recognition of the new Government (Sir H.lay then seid that the latter Agreement would be beneficial to both Governments).

In 1915 Sir H.May appears to have re-opened the matter. He was anxious to get Article]X put into effect (as to goods from Treaty ports under Custons documents in transit though Hong Kong) and also the shortage of revenue had drawn his attentionto the possibility of taxing salt. Balt would have to be controlled under the Customs Agreement and it appeared that it would cost little more to tax than to control it and that this course would make control more efficient. Sir R. Dane encouraged this view, urging the importance of stopping smuggling into Kwan,shing and the advantages of such a tax. The Governor recognised that the formal negotiation of the Customs Agreement could not then be attempted owing to the disturbed state of China, but he tried to get an informal agreement with the Inspector General, by which the Inspector General would enforce Article 9 in return for legislation in Hong Kong to enforce Article 2 control of salt). Negotiations went on and various modifications were made in the draft agreement, of which Clause. XIII & to which some importance vas attached by the Colonial Government refers to the rate

of