CO129-493 - Governor Sir Clementi - 1926 [6-8] — Page 73

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be seen whether they may not decide to collect it for themselves. As will be seen from Mr. Shar's statement the amounts collected at Canton and Swatow give an annual average of 351,430 Haikwan Taels and 152, 248 Haikwan Taels, and are worth having.

6.

I do not understand what is meant by the proposal that $750,000 per mensem of the proceeds of the Washington surtaxes should go to the Ministry of Finance solely for currency construction and for administrative expenses". In any case I should not be surprised if Canton, which has a mint of its own and its own"Minister of Finance" in the person of Er. Sung Taz-mar strongly objected to the proposal.

7.

The telegram continues that, after making this

payment to the Ministry of Finance, and after crediting $5,000,000 from Washington surtaxes to ordinary customs revenue

in lieu of transit dues and a further $4,000,000 in lieu of

coast trade duty, the remaining portion of the increased revenue

is to be accumulated by the customs Administration, free from

all encumbrances, for eventual liquidation of unsecured and

inadequately secured debts owed by China. I do not suppose that

a Canton Government of the kind which now exists would acquiesce

in this proposal. Indeed, if(as seems to be the case) all that

the provinces of Kuang-tung and Kuang-hsi stand to get out of

the draft agreement is a sum of about $81,030 per annum

I am

by no means certain that a Canton Government of the kind which

now exists might not after all decide to seize the anton Customs

having in view the fact that Great Britain, America, Japan, France, Italy and Portugal are not now likely to unite (as they

did in 1923) to repel such a seizure by show of force. In the seventh paragraph of my secret despatch of the 21st May, which should be read with this despatch, I expressed the view that the Canton Government would probably not do this, at all events until it is known whether higher interim surtaxes will be

enforced.

But if a document so discouraging to chinese provin-

cial administrations as the one now drafted were to be signed,

T

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