CO129-495 - Governor Sir Clementi - 1926 [11-12] — Page 465

6.

455

I fear system you contemplate may well wreck it and destroy the only foundation on which some form of fiscal nity of China could be built. Moreover if customs revenues disappear as far as central government are concerned salt and railway revenues could hardly be preserved and whole structure of Chinese centralization of finance would be dissolved with disastrous results to very large British interests concerned.

As long as Canton remains under direct influence and control of Soviet agents no such concession

in the matter of customs revenue is likely to satisfy them.

I propose to deal with question of unsecured debta in another telegram.