CO129-491 - Public Offices - 1925 — Page 95

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circumstances go beyond the conditions specially agreed upon

at the Washington Conference, and any increase of tariff

should of course be conditional on the effective abolition

of the internal duties known as Likin.

A further essential condition is that a certain

proportion of the Customs Revenue should be allocated to the

Government of each Province.

This appears to me to be a very difficult problem,

because I feel sure that Canton will never be satisfied unless

they have a considerable share in any increased duties, whilst

the Peking Government will endeavour its utmost to prevent that.

Provision should be made that the proportion of in-

creased duties allocated to each Province should be paid over

either direct by the Inspector General, or by a special board

to be created at the Conference.

It is unnecessary for me to say that every endeavour

should be made to include the different railway loans

guaranteed by the surplus of the Customs Revenue.

I am confident that if the Powers hold firm the

Chinese Government will be only too glad to accede to the above terms, for the simple reason that they are desperately

Party short of funds to carry on the present Government. interest counts for so much nowadays in China that each party wants "to make hay while the sun shines," and would rather accept the conditions imposed by the Powers than forfeit the